DAO Index Fund Aims to Compete with Biggest Asset Managers in the World
DAOs in the digital asset community are member-owned communities that lack a centralized leader. While collaborative in nature, DAOs are not usually seen in an asset management setting.
Blockworks exclusive art by axel rangel
- Index Coop sets its sights on becoming a premier asset management platform
- A new strategic funding round will help the DAO to expand product and its team
The Index Cooperative, the decentralized autonomous organization (DAO) with more than $400 million in assets under management, is not run like a typical asset management platform, but its leaders are confident it can rival the big names.
“Index Coop is laser-focused on becoming one of the largest asset management platforms in the world within the next five years,” Simon Judd, head of business development for Index Cooperative, known as Index Coop.
In the crypto space, DAOs are member-owned communities that lack a centralized leader. The structure is known for its collaborative nature but is not usually seen in an asset management setting.
For Index Coop, there are seven elected community members who are responsible for setting long-term strategy for the fund, Judd said. There are also a variety of different working groups that handle operations, including governance, marketing and engineering.
“The DAO structure provides tremendous flexibility and allows us to scale quickly,” Judd said. “Because the DAO is both the designer and the user of the products we are able to ensure that we are launching products with a compelling product-market fit.”
Index Coop has raised a strategic funding round led by Sequoia Capital India, Blockchain.com Ventures and White Star Capital, bringing its total funding to $10 million, the DAO announced Wednesday. Galaxy Digital co-led an earlier funding round of $7.55 million with 1kx.
The new round of funding will go toward expanding its offerings in portfolio products to other Ethereum virtual machine-compatible networks, such as Polygon, the DAO said. The raise will also help Index Coop to hire more specialized, full-time contributors and integrate Index products with layer-2 blockchains, Judd said.
“Investor interest in the past few months has seen a massive increase — climbing from just under 5,000 total index holders at the start of the year to over 30,000,” Judd said. “We have also seen a massive increase in our TVL — with a high of $500 million in the past month from a starting point of $5 million this time last year.”
Index Coop currently offers investments in six different indices, including the DeFi Pulse Index, which tracks the performance of various decentralized assets, and the Metaverse Index, which holds tokens that operate in virtual environments, such as Decentraland and Sandbox.
“One particular standout has been our Metaverse Index that has returned almost 300% since inception this spring,” Judd said. “Something we are seeing is the need for broad sector-based indexes that capture important themes such as Metaverse, Defi, or DATA.”
The Metaverse Index, which tracks 15 tokens, was down 6.28% as of 9am ET to $253.76 a share.
Judd is looking forward to establishing Index Coop as a world-class asset management platform.
“Over the past 40 years, passive asset management has provided a powerful platform for millions of families to invest safely and effectively,” he said. “We are deep believers in the power of passive asset management and hope to bring safe and effective crypto investing to millions of families.”
Get the day’s top crypto news and insights delivered to your inbox every evening. Subscribe to Blockworks’ free newsletter now.