The Y Combinator of Web3 Attracts Record Number of DAO Startups

Blockworks Exclusive: DAOs and related startups made up an “overwhelming number of applicants” for a Web3 accelerator’s cohort this year

article-image

Source: Alliance

share
  • “It looks like [the vast majority of] FAANG engineers and Web3 founders [want] to build in DAO tooling,” Alliance’s Qiao Wang told Blockworks
  • Ink Finance, specifically, facilitates mergers and acquisitions for DAOs

As the number of DAOs has exploded this year to 4,832 — just the first 216 in assets under management (AUM) are responsible for $9.1 billion in Web3 assets — so has their pursuit of funding and exposure.

The uptick has been good news for one Web3 accelerator: Alliance. A record number of DAOs (decentralized autonomous organizations) and related startups will pitch to investors during Alliance’s Demo Day on Wednesday, Qiao Wang, a contributor, told Blockworks.

Last April, total DAO AUM was just $932 million, according to data dashboard DeepDAO.io. Specifically, 10.3% of those presenting at the Demo Day will be related to the nascent space.

“On the DAO side of things, we’re seeing an overwhelming number of [them],” Wang said. “It looks like [the vast majority of] FAANG engineers or Web3 founders [want] to build in DAO tooling.”

The startup accelerator accepted less than 5% of applicants this year. The “main goal” for roughly half the startups is to raise money, according to Wang.

Prospective applicants are considered based on the “caliber of the founders,” and “if they’re building something truly unique,” Wang said, adding that the criteria are not “absolute requirements” for acceptance.

“I don’t just look at credentials [of founders],” Wang said. ”It’s also based on an interview with myself and other partners of Alliance. [The] second thing is whether or not they’re building something novel.”


Alliance Presenters

  • Azuro is a blockchain-betting protocol governed by a DAO. The startup bills itself as a way to replace traditional bookmakers with independent data providers, front-end operators and liquidity providers.
  • Rain is advertised as the “credit card for DAOs,” aiming to make cryptocurrency spendable without a centralized exchange. 
  • Ink Finance facilitates mergers and acquisitions for DAOs in need of financing — comparable to a Web3 investment bank. 

Yury Lifshits, chief executive of DAO infrastructure company Superdao, told Blockworks the startup will be presenting Wednesday to “encourage people to use [their] services.” Superdao raised $10.5 million in January, raising its valuation to $160 million. 

The number of DAOs in Alliance’s cohort, Lifshits said, will continue to grow, because the number of DAOs in Web3 will do the same. 

“We estimate that up to one million DAOs will be created by the end of this calendar year,” he said.

Investing in new structures like DAOs with less lengthy track records always has some risk, general partner at VC firm Initialized Capital Brett Gibson told Blockworks. 

“DAOs are new…but there are a lot of different types of DAOs, DAO governance structures and relationships to the legal system,” Gibson said. “So if you believe in the ability of token economics to align incentives and believe the DAO is well structured and governed, a lot of risk is mitigated.”

One DAO in particular was plastered over mainstream headlines last year when a group of crypto investors raised $49 million in a bid to buy a copy of the US Constitution at Sotheby’s auction house. 

The group — dubbed ConstitutionDAO — later lost the bid to hedge fund billionaire Kenneth Griffin and dissolved.

DAOs, however, have had their own pitfalls as well — despite the surge in popularity.

“There have been DAOs that I’ve been a part of that have accidentally sent millions of dollars’ worth of tokens to the wrong address and then they were just lost forever,” Will Papper, co-founder of Web3 investing DAO Syndicate, told TechCrunch. “We have a lot of protections in place to help users, but there’s always a tradeoff between the protection we give them and the flexibility.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research Report Templates (1).png

Research

Aave’s revenues have doubled from April lows and are fast approaching all-time highs. With 35% of borrow interest coming from ETH and 55% from stablecoins, Aave is emerging as a powerful proxy as an ETH and stablecoin beta. As looping strategies accelerate growth and Horizon positions the protocol to ride the RWA wave, Aave is shaping up as one of DeFi’s most compelling multi-narrative plays.

article-image

Private testnet aims to deliver low-cost settlement with partners including Visa, Deutsche Bank, and OpenAI

by Blockworks /
article-image

Solana saw $78 million in REV for August

article-image

Lit Protocol’s Vincent is shifting agentic finance from toy demos to production rails

article-image

The new system aims to unify Europe’s fragmented tokenized asset settlement and cut cross-border costs

by Blockworks /
article-image

Tron slashed fees by 60% as Plasma looms, threatening its USDT moat

article-image

The acquisition adds evaluation-based funding to Kraken Pro, giving traders access to capital on performance

by Blockworks /