Diversification of DAO Treasury through Real-World Assets (RWAs) and Real-World Projects (RWPs)

[jasonsprouse]

Rationale:

The current DAO treasury is primarily concentrated in digital assets, exposing it to volatility and potential underperformance. Diversifying into RWAs and RWPs presents an opportunity to mitigate risk, generate sustainable yield, and foster the growth of emerging businesses and DAO communities.

Key Benefits of RWA/RWP Investment:

1. Risk Mitigation: Diversification across a wider range of asset classes reduces exposure to the volatility of any single asset or sector.
2. Yield Generation: RWAs, such as real estate, startups, or infrastructure projects, can generate recurring revenue streams through rent, sales, dividends, or royalties creating a more robust and sustainable treasury.
3. Community Building: Investing in real-world projects can foster the development of engaged DAO communities centered around shared interests and goals.
4. Impact Investment: Strategic investments in RWPs can have a positive impact on real-world issues, aligning with the DAO’s values and mission.

Proposed Projects:

1. ISO Standardization for Blockchain:

• Develop an ISO-20022 compliant solution for blockchain transactions.
• File a patent for this method and process, potentially creating a new revenue stream for the DAO.
• Develop a tool to generate metadata for smart contracting platforms, facilitating broader adoption and interoperability.
• This project requires minimal initial investment and can be spearheaded by the community, with potential for significant long-term returns through transaction fees.

I started on this, but just the skeleton of the app, haven’t completed it. Not a difficult app. There’s several ways an ISO solution like this could be built - PLUS - I’ve been thinking about filing the patent and forming a DAO, and the DAO owning the patent and getting different blockchain (Atom, Ethereum, Filecoin, Near, Avalache, ect…) and bank (Chase, UBS, Central Banks, ect…) representatives onboard to best represent the interest of all parties.

2. Real-Estate Amenity Innovation Platform

• Develop an international DAO platform that serves as a point-of-sale and gating solution for customers.
• Leverage blockchain technology to enhance customer engagement, loyalty, and data management.
• Negotiate a mutually beneficial agreement that aligns with the DAO’s values and financial goals.
• This project requires a significant initial investment but has the potential to generate substantial recurring revenue through gating fees and additional amenity solutions.

Amenity Innovator that I’ve signed a non-disclosure with, but I’ve pitched two original and unique use cases for their amenity and a business plan with an early stage tokenomic suggestion. The amenity developer requested $1,000,000 for a master agreement for the 2 original concepts I provided with a limited scope of where my location(s) can be. I countered with an offer to work on building a solution with a DAO structure that allows them to buildout an international DAO platform that can double as a Point-of-Sale and gating solution for customers. I’m of the opinion they have a lot to gain using blockchain technology.

3. Industrial Hemp Construction Material Production:

• Partnership with a manufacturer of industrial hemp construction materials.
• Explore establishing a production facility in Texas, leveraging the state’s large construction market and favorable regulatory environment.
• Create a DAO-based profit-sharing model with the manufacturer, ensuring a sustainable revenue stream that can extend internationally.
• This project requires a substantial initial investment but has the potential for significant long-term returns due to the growing demand for sustainable building materials.

I’ve been in talks, but nothing concrete at the moment. There could be a strong argument for a location in Texas being granted this kind of DAO investment. Texas is one of the most economically productive states in the United States with a significant market for the product being manufactured. Total Construction Value (Residential and Non-Residential):

• Dodge Data & Analytics reported $81.8 billion in total construction starts in Texas for 2023. This figure includes residential and non-residential projects.

I’m working on this agreement - would use the product myself, and this would allow stronger support for additional agreements with farmers. Would want to set up a DAO and do a profit share with the manufacture on all products sold. A similar product manufacture says expected costs to set up a manufacturing plant is appox: $5,000,000.

Summary:

1. ISO - No price tag - can be spearheaded by community
2. RWP - $1,000,000 just for master license contingent on their interest in my counter proposal.
3. Manufacture - est. $5,000,000 for comparable manufacturing facility.

I’ve posted about the use of community funds for RWA/RWP before and think these are significant opportunities. All worth while in market segments that will see growth, but have their risks too.

What do we do with the Neutron airdrop?

I agree with @serejandmyself here. Here is what is unspoken but should be inferred…billions of dollars in annual economic churn equates to billions of dollars in buy pressure on a coin. A line-item proposal I put together to help someone successfully win a city contract in Austin, TX: [Screenshot 2023-12-14 104216] My own cost analysis: [319539380_6448813058467570_1956151805621661794_n] For assets like these, but there is more creative things that can be done: [319323599_64489034251252…

What is the general consensus in investing in businesses other than online blockchain apps? I think there is a huge opportunity to build DAO businesses that are more in the manual labor / robotic and automation sectors with a management structure.

Construction
Farming
Lawn Care
Window Cleaning
Mobility
…there are others.

There is obviously business development work and overhead associated, salaries for management team ect… with this strategy, but profit sharing and experimenting with this strategy would be an interesting social experiment.

Getting an idea of community sentiment and conversation starter.

[Govmos]

Hi @jasonsprouse, please send us a message at contact@pro-delegators.com. We have pending ideas with potential overlap; it could be beneficial to confront ideas and collaborate on this endeavor.

Best,
Govmos

[jasonsprouse]

Sounded like you were primarily interested in the ISO piece…so,

This is how to listen for events on Ethereum blockchain - this is with a ZKP. There is a contract that is launched that has the corresponding verification for the ZKP circuit in this instance.

const NFT_CONTRACT_ADDRESS = "0x8F283a6a1F14cf03bCE439c88c7e2b3863D7DB6A";
const OWNER_ADDRESS = ""
const NFT_CONTRACT_ABI = require("../eth-contracts/build/contracts/SolnSquareVerifier.json");
const { proof, inputs } = require("../zokrates/code/square/proof.json");
const NUM_HOUSES = 5;

async function main() {
  const provider = new HDWalletProvider(mnemonic, INFURA_URL);
  const web3Instance = new web3(provider);

  const contract = new web3Instance.eth.Contract(
    NFT_CONTRACT_ABI.abi,
    NFT_CONTRACT_ADDRESS,
    { gasLimit: "1000000" }
  );

  // Houses issued directly to the owner.
  for (var i = 0; i < NUM_HOUSES; i++) {
    const result = await contract.methods
      .mintNFT(
        OWNER_ADDRESS,
        i,
        proof.a,
        proof.b,
        proof.c,
        inputs
      ).send({from: OWNER_ADDRESS})
      console.log("Minted house. Transaction: " + result.transactionHash);
    }
} 
main();

We’d do essentially the same thing with cosmos.js to listen for events broadcasted – I’ve also added an HTTP package to send the collected data to the regulatory body. It’s really this easy.

import { SigningStargateClient, GasPrice } from "@cosmjs/stargate";
import { Tendermint34Client } from "@cosmjs/tendermint-rpc";
import axios from "axios";
import { EventData } from "@cosmjs/tendermint-rpc/build/tendermint34/types"; // Import EventData type

// ... (RPC and Chain ID setup)

// 2. Event Subscription (Modified)
const query = "tm.event = 'Tx'"; 
// Use a more generic query to capture all transaction events
// More specific queries can be used to listen to only specific module events

async function main() {
  const tendermintClient = await Tendermint34Client.connect(rpcEndpoint);

  await tendermintClient.subscribe({ query }, (event: EventData) => {
    const txHash = event.data.tx.hash; 
    const events = event.events; // Extract all events from the transaction

    // Iterate through all events in the transaction
    for (const eventType in events) {
      const attributes = events[eventType];

      for (const attribute of attributes) {
        // Example: Check if it's a transfer event
        if (eventType === "transfer") {
          const sender = attributes.find((attr) => attr.key === "sender")?.value;
          const recipient = attributes.find((attr) => attr.key === "recipient")?.value;
          const amount = attributes.find((attr) => attr.key === "amount")?.value;

          // Send data to endpoint (optional)
          try {
            await axios.post("YOUR_ENDPOINT_URL", {
              txHash,
              eventType, // Include event type
              sender,
              recipient,
              amount,
            });
          } catch (error) {
            console.error("Error sending data:", error);
          }
        }
        
        // ... (Add other event types to parse as needed)
      }
    }
  });
}

main().catch((error) => console. Error(error));

This is the swim lane that I put together to toss some ideas around…as we talked about - the data from the web2 side is the last piece of this, but it won’t be too difficult to square this ISO solution away.

[Govmos]

The swim line you provide seems like a good streamline of event to process according to standards. If KYC verified we wrap it all together with the transaction data formated the right way and send it over for ISO compliance, then post a verification proof back on the smart contract for storage.

[jasonsprouse]

This particular approach obviously associated the wallet address with the KYC - so that would be the gatekeeping function of interacting with the contract. Not a bad solution.

Another potential solution that recently caught my attention using Lit - which I really like. This sequence diagram borrowed from Infinex Proposals. As discussed this also introduces quantum hardening properties. Could do something similar with Cosmos to capture user data for ISO transactions.

Here’s all the ISO definitions - I just downloaded an ISO book - they said over 800 definitions. That’s one of the reasons I only started the skeleton. It would take some time to research each definition, write smart contracts for all smart contracting platforms and build something like an OpenZeppelin for ISO standardizations. The other side of it is the listeners for every platform like Ethereum and Cosmsos.js solution above. It would be a very professional tool.

ISO 20022 Message Definitions | ISO20022

[Govmos]

They had to use that acronym, didn’t they !?

[jasonsprouse]

@jasonsprouse

File a patent for this method and process, potentially creating a new revenue stream for the DAO.

With the patent, I would describe the process the code above achieves. The Cosmos.js code would have other conditionals that could be included, but essentially that’s how that data is collected and sent to the regulatory body. That patent IP being owned by a DAO and the DAO participants agreeing on any fee structure would be the most reasonable way to structure this emerging opportunity.

Does everyone agree that is the most logical way to progress?

Building the ISO tool would take some time doing it in a high quality professional manner - I would consider the CosmosSDK documentaiton high quality and professional for comparison.

[jasonsprouse]

I think we’ve got our KYC piece in the Cosmos community in a decentralized way with cheqd - @ankurb. This would be all the pieces to move this ISO implementation forward.

Some collaboration to demo the solution would be helpful.
Cheq’d discord:

Discord - Group Chat That’s All Fun & Games

[ankurb]

I really love this use case and how you’re thinking about it. We don’t have an endpoint that you could call out-of-the-box to do a KYC, as most of the developers building so far use a blend of on-chain Decentralized Identifiers and off-chain digital credentials when working with cheqd network. Having said that, the kind of flow where you need just a yes/no on a different chain / smart contract is something we’ve heard a lot of demand for, and so one of the community pool funded projects we’ve been working on aims to enable exactly this, as a method that can be called over IBC to fetch a KYC proof from cheqd without necessarily writing too much sensitive/personally-identifiable information.

I need to check in with Nymlab on where they are, as I believe it was around June-ish that we were expecting some early code deliverables. So we might indeed have something available for this soon.

[jasonsprouse]

This would be relatively easy even with a Zero Knowledge Proof, but that could be optional. With or without a ZKP - it would have to be implemented on the KYC verifier side. The whole idea with the contract storage I have on that swim lane is have something to call 1st before sending an address to be verified, but what if a client abandons that address? What use then would that be in storage?

[jasonsprouse]

A diagram.

Some code.

Rust
use cosmwasm_std::{
    entry_point, to_binary, Binary, Deps, DepsMut, Env, MessageInfo, Response, StdResult,
};
use schemars::JsonSchema;
use serde::{Deserialize, Serialize};
use winterfell::{Proof, VerifierError};
use winterfell::crypto::hashers::{Blake3_256, Hasher};

#[derive(Serialize, Deserialize, Clone, Debug, PartialEq, JsonSchema)]
#[serde(rename_all = "snake_case")]
pub enum ExecuteMsg {
    VerifyProof(VerifyProofMsg),
}

#[derive(Serialize, Deserialize, Clone, Debug, PartialEq, JsonSchema)]
pub struct VerifyProofMsg {
    pub proof: StarkProof,
    pub public_inputs: Vec<u8>,
    pub vk: Vec<u8>, // Verification key submitted with proof
}

#[entry_point]
pub fn instantiate(
    deps: DepsMut,
    _env: Env,
    _info: MessageInfo,
    _msg: Empty, // No instantiation message needed in this example
) -> Result<Response, ContractError> {
    // Initialize the verification key hash (if using hash commitment)
    // ...
    Ok(Response::default())
}

#[entry_point]
pub fn execute(
    deps: DepsMut,
    env: Env,
    info: MessageInfo,
    msg: ExecuteMsg,
) -> Result<Response, ContractError> {
    match msg {
        ExecuteMsg::VerifyProof(proof_msg) => verify_proof(deps, env, info, proof_msg),
    }
}

#[entry_point]
pub fn verify_proof(
    deps: DepsMut,
    env: Env,
    info: MessageInfo,
    msg: VerifyProofMsg,
) -> Result<Response, ContractError> {
   
    // 1. Load Verification Key (Stored in contract storage)
    let vk = load_verification_key(deps.storage)?;

    // 2. Verify Proof
    match winterfell::verify::<Blake3_256>(&vk, &msg.proof, &msg.public_inputs) {
        Ok(()) => Ok(Response::new().add_attribute("action", "proof_verified")),
        Err(VerifierError::VerificationFailed) => Err(ContractError::InvalidProof),
        Err(err) => Err(ContractError::VerificationError(err)), // Handle other errors
    }

}

The only state we’d need to initialize on this is owner. The HTTP server that sends the prover data from the rust server could hold the verification key and send it to all the verifier contracts on CosmWasm enabled chains.

MORE SCRUNITY SHOULD BE EVALUATED FOR ATTACK VECTORS, but overall this a way to KYC clients and stay sudo-anonymous. There is some minor errors in this code, and code for the entire system isn’t here, but it’s enough for validation.

[serejandmyself]

Does any of this require KYC/AML procedures? Are there legal risks? How will privacy be preserved?

Sounds like web3 has sooo many sectors to diversify against, whats the point in going for one of the most complex ones?

[jasonsprouse]

There is other similar projects:
15 real estate crypto projects to check out in 2024

It would be REITish (Real Estate Investment Trusts), but I have a project that could also be akin to a digital REIT. It would be a blend of real and digital world assets and experiences. DREIT. However, some of the other solutions I’m proposing here do fall in the realm of a REIT. As an investor, we purchase shares of a REIT, and in return, we receive dividends from rental income and property sales, ect… The professionals working for the REIT handle property management and transactions on our behalf. Now, regarding the Know Your Customer (KYC) process, it depends on the type of REIT:

1. Public REITs: These REITs register with the Securities and Exchange Commission (SEC) but do not trade on stock exchanges.
2. Private REITs (Non-Traded REITs): These do not have to register with the SEC, and their stocks do not trade on exchanges

What is proposed above with the ISO solution allows people to KYC in a simple way, KYC is for money laundering and the such. Here’s a web3 example of money laundering, a wallet address is known to have received funds from a wallet drainer. Do you want to allow that wallet to increase it’s wealth by investing in legitimate businesses with those stolen funds?

NO- then KYC/AML is reasonable
YES - then KYC/AML is ridiculous

KYC is not a government function to control people, it’s a function of consumer protection where industry agreed upon definitions and guidelines establish what is necessary to have valid KYC/AML validation of business/customer relationship.

None of the necessary paperwork is overbearing and demands professionalism and competency from project managers. That is a net positive for consumers and ecosystem legitimacy - in my opinion. I respect the professionalism.

Here is some of the projects in that link for comparison:

1. RealT
   RealT offers a variety of benefits to investors, including:

• Diversification: Investors can diversify their portfolios by investing in a variety of different real estate assets.
• Liquidity: Investors can easily sell their tokens on the RealT platform at any time.
• Transparency: All RealT transactions are recorded on the blockchain, making them transparent and secure.

2. Brickblock
   Brickblock offers a variety of benefits to investors, including:

• Professional investment management: Brickblock’s team of experienced real estate professionals manages all of the investment products on the platform.
• Low investment threshold: Investors can start investing in real estate with a very small sum of money, ensuring wider accessibility and adoption.

3. SMARTRealty
   SMARTRealty envisions a future where all real estate transactions are conducted using smart contracts. This would make the real estate transaction process more efficient, secure, and transparent.

      Here are three main unique key features:
   

• Smart contract integration: As mentioned earlier, SMARTRealty aims to integrate smart contracts into the real estate transaction process. For example, smart contracts could be used to automatically trigger certain actions, such as the release of funds to the seller, once certain conditions have been met.
• Blockchain-based land registry: SMARTRealty is also exploring the potential of using blockchain technology to create a more efficient and secure land registry system. A blockchain-based land registry could make tracking land ownership and transfer titles easier and help reduce fraud.
• Global real estate marketplace: SMARTRealty envisions a global real estate marketplace where buyers and sellers can connect directly without the need for intermediaries. This could make buying and selling property in different countries easier and help reduce transaction costs.