A New Model for Web3 Project Expansion: subDAO and Its Advantages

In the Web3 space, many projects face challenges in expanding new businesses. Existing projects often struggle to compete with emerging projects in the field when launching new businesses. In this regard, the subDAO model may be a feasible solution. This article analyzes the characteristics and advantages of the subDAO model using Magpie as an example.

Definition and Characteristics of subDAO

A qualified subDAO should have the following characteristics:

1. Have independent tokens and the ability to expand independently.
2. The mother DAO holds a large proportion of subDAO equity.
3. Mutual benefits between the parent DAO and subDAO

Taking Magpie's subDAO Radpie as an example, it will issue the $RDP token, where the Magpie treasury will hold 20%, and another 30% of the IDO share will be allocated to MGP. This means:

• MGP holders can share in the IDO profits
• MGP holders will enjoy "dividends" of $RDP in the future.
• Magpie has gained significant control over Radpie, thereby obtaining governance rights over Radiant.
• Radpie can quickly launch by utilizing the team resources of Magpie.

Advantages of subDAO Model

1. Reputation: Inherit the reputation accumulated by the parent DAO, making it easier to launch.
2. Growth: Independent tokens provide ample incentive growth budget.
3. Narrative: Keep up with the new narrative, so that the mother DAO can also keep up with industry hotspots.
4. Circulation: Interlinking and sharing resources within the mother DAO ecosystem to improve efficiency.
5. Leverage: The parent DAO of the governance track can achieve leveraged governance through subDAOs.

credibility advantage

subDAOs can inherit the reputation of the parent DAO, significantly reducing the risk discount of new projects, and facilitating cooperation with KOLs and other project parties. This reputation can be continuously accumulated, paving the way for subsequent new subDAOs.

Growth and Narrative Advantage

The subDAO model solves the dilemma of old projects developing new businesses. By issuing new tokens, subDAO can provide ample growth budgets while keeping up with new market trends. For example, Magpie's Penpie project successfully linked with Pendle's narrative, gaining an advantage in competition.

Ecological Cycle

subDAOs can achieve resource sharing and internal circulation within the main DAO ecosystem. For example, multiple projects within the Magpie ecosystem can facilitate token circulation through a bribe mechanism, reducing net external expenditure. At the same time, different projects can share technical and business resources, improving overall efficiency.

Governance Leverage

For projects focused on governance rights, the subDAO model can achieve a leverage effect on governance rights. Taking Magpie as an example, by controlling 20% of the governance rights of Penpie, it can further influence 25% of the governance rights of Pendle, achieving approximately 5 times the governance leverage.

The Importance of Execution

Despite the many advantages of the subDAO model, ultimate success still depends on the team's execution ability. Some projects have the concept of subDAO, but due to a lack of subsequent development and updates, they have not been able to truly leverage the advantages of subDAO.

Conclusion

The subDAO model provides a new expansion path for Web3 projects. It can obtain sufficient growth budget, keep up with emerging narratives, and achieve ecological linkage and resource sharing. However, all of this is built on the foundation of the team's excellent execution capabilities.

As DeFi projects achieve rapid horizontal expansion through the subDAO model, there is hope to form a complete system that can compete with large centralized exchanges, which may trigger a new transformation in the industry.