What is HAI DAMO?
HAI DAMO is a DAO-operated asset management organization building decentralized investment vehicles. Decentralized investment vehicles leverage idle LP tokens to create collateral-backed, risk-optimized vehicles. Simply put, deposit your LP token and receive additional yield. Being a DAO-operated asset management organization, HAI DAMO also aims to incubate projects and be an active market participant.
HAI stands for Hedge Against Inflation. Why is this our name? All of us involved in crypto, and especially DeFi, understand the existential threats of centralized authorities. Regardless of politics and ethics, a centralized control of all of our assets is rife with moral hazard and misaligned incentives.
The biggest ponzi is fiat currency: government bonds dollars to banks who get access to fresh, uninflated, dollars, with which they systematically disseminate through loans. These loans are priced with this additional surplus of cash in mind, giving them a small premium. This premium exists because banks can loan out funds at the previous interest rate, thus accruing a small (let's say) 1% premium. These loanees, often people and corporations with large amounts of credit and capital, receive these dollars with only a bit of inflation added to them, let's say 1%. So, the banks essentially got a 1% additional premium on the loan. Now, these corporations with these loans go to buy goods. Because they have more nominal cash, they can buy more things, but of course, they receive more proportionate to their increase in cash, allowing them to take a (let's just say) 1% premium. Then this goes on and on all the way down to the average consumer, who receives their dollars last. After all the loans have been issued, and all the supplies bought, and all the retail sales have been made, the worker is finally paid. As we all know with ponzis, the bottom of the pyramid eats all the costs. Imagine the business flows in which money travels from the government to banks to corporations to manufacturers/suppliers to middlemen to retail and then finally to the individual. At each step of the way, each group took a 1% premium on the additional money they received vs. the money they used to buy goods. When you make it all the way down to the user, there's none below, so the user (the typical human on Earth), is stuck with a 5% inflated dollar, the same dollar that the bank used earlier at 0% inflation. This is by definition a ponzi.
But that's (sort of) ok, all of us in DeFi understand that everything is a ponzi, so we must admit that fiat currency, though a ponzi, is at least a pretty good ponzi.
Nothing has value, not even gold, electricity or even Bitcoin. Something only has value in relation to other things. If you are skeptical, ask yourself how useful gold is on a deserted island, or bitcoin in the 1800's. Context matters. Hedging against inflation is done in the fiat world most safely through treasury bills that offer returns just above inflation rates. However, with record inflation, these merely mitigate the damage of inflation rather than overcome it. Many are turning to crypto as a trust-less and permission-less financial intermediary, where most rigorous assets are inherently deflationary. In other words, crypto is becoming a more attractive place to park your fiat dollars. To cut to the chase, we are called Hedge Against Inflation because we are building a product that makes hedging against inflation very convenient for every level of crypto user, and not to mention, institutions. We have developed a unique incentive structure to allow 3rd parties to trust that both sides have each other's best interests in mind because it is in turn what is best for them.
Dating back to the 19th century, investment vehicles have come in many forms to lower the barrier of entry into certain markets. We have seen increasing popularity in mutual funds and exchange traded funds throughout the last century and will continue to see the evolution of these vehicles.
Decentralized Investment Vehicles are simply the next evolution forward for investment solutions, lowering the barrier of entry for all investors. DAMO eliminates the middleman and minimizes trust while providing the user with robust incentives and arbitrage opportunities that will play a key role within the ecosystem. Through the use of a viable governance structure, the power is returned to those feeding the hand.
Decentralized Investment Vehicles are portfolios that are created and managed in a completely decentralized manner. Opposed to traditional vehicles being ran by a lead portfolio manager and team of analysts, the DAO acts in a similar manner except no member plays an integral role in decision making. DIVs can come in many forms depending on the target market. Our first product is HAID. HAID repurposes LP tokens to create collateral-backed risk-optimized vehicles. Simply put, users can deposit their idle LP token on the platform to earn additional risk-adjusted yield.
Investment vehicles have played an integral role in finance, especially for the retail investor. The idea of offering an investment vehicle to lower a barrier of entry was originally a response to volatility in the market. Offering an investment solution to more risk-averse investors has allowed for the inflow of trillions of dollars to equities, commodities, real estate and soon, crypto.
DIVs are a solution for jumping through the hoops of various exchanges to attain different crypto assets. By forging or buying a DIV off the secondary market you can hedge risk and gain exposure to multiple crypto assets with a click of a button.
The governance token, DAMO, is your key to the ecosystem. Governance participants can join our community discord and start actively participating the ecosystem. All insights and contributions are welcomed while we get the DAO up and running. Other ways to get involved include staking, capitalizing, and forging.