New Expansion Ideas for Web3 Projects: subDAO Model and Its Advantages

In the Web3 space, it is relatively rare for projects to successfully expand into new businesses, and established projects often struggle to compete with new projects that focus on the field. However, the combination of subDAO with efficient execution may become the key to solving this dilemma. The following analysis will explore the characteristics of the subDAO model and its potential in the expansion of Web3 projects through the examination of certain projects' practices.

Definition and Characteristics of subDAO

A well-functioning subDAO typically possesses the following characteristics:

1. Have independent tokens with the ability to expand autonomously.
2. The parent DAO holds a large stake in the subDAO.
3. The mother DAO and subDAO mutually benefit and coexist.

Taking the subDAO of a certain project as an example, this subDAO will issue independent tokens, with the mother DAO treasury holding 20%, and another 30% of the IDO allocation distributed to mother DAO token holders. This structure allows for:

• Mother DAO token holders can enjoy IDO profits.
• Future holders of the mother DAO token can receive "dividends" from subDAO tokens.
• The parent DAO has significant control over the subDAO, thereby influencing the governance of related projects.
• subDAO can quickly launch by utilizing the team resources of the parent DAO.

Advantages of subDAO Model

1. Reputation Inheritance: subDAO can inherit the reputation accumulated by the parent DAO, facilitating project initiation and collaboration.
2. Growth Potential: Independent tokens provide ample incentive budgets to promote growth.
3. Narrative Update: subDAO tokens can keep up with the new narrative, allowing the parent DAO to stay on top of market trends.
4. Resource Circulation: Achieve linkage and resource sharing within the mother DAO ecosystem to enhance overall efficiency.
5. Governance Leverage: The parent DAO of the governance rights track can achieve a leverage effect of governance rights through subDAOs.

credibility advantage

New projects often face a trust crisis, while subDAOs can inherit the reputation of the parent DAO, significantly reducing market doubts and promoting cooperation with various parties. This credibility advantage can be sustainably accumulated, paving the way for subsequent new subDAOs.

Growth and Narrative Advantages

Traditional Web3 projects often find themselves in a dilemma when launching new businesses: a large issuance of tokens may lead to a price drop, while not issuing enough may hinder competitiveness. The subDAO model addresses this issue by issuing independent tokens, which neither affect the parent project's tokens nor impede the provision of sufficient growth funds for new businesses.

At the same time, due to the large scale of older project tokens, it is often difficult to quickly respond to new trends. The independent tokens of subDAOs can closely follow market hotspots and indirectly bring new attention to the parent project.

ecological cycle

The subDAO model can create a virtuous cycle within the project ecosystem. For example, through a bribery mechanism, newly issued tokens can remain within the ecosystem, reducing net external expenditure. Resource sharing among multiple projects can also effectively reduce costs and improve efficiency.

Governance Leverage Effect

For projects focused on governance rights, the subDAO model is particularly suitable. The parent DAO can exert greater influence in actual governance by controlling a certain proportion of the subDAO, achieving a leverage effect on governance rights.

The Importance of Execution

Although the concept of the subDAO model is excellent, its ultimate success or failure still depends on the team's execution ability. Some projects have adopted similar models, but due to a lack of subsequent updates and clear token economics, it is difficult to achieve the desired results. Therefore, efficient execution is the key factor for the success of the subDAO model.

Conclusion

The subDAO model combines outstanding execution capabilities, opening new growth paths for Web3 projects. It not only provides ample growth funding and new narrative opportunities but also achieves optimized resource allocation within the ecosystem. As this model develops, we may see DeFi projects evolve from single modules to integrated systems, potentially competing more vigorously with large centralized trading platforms in the future.