Oversubscribed by 200 times from Umbra, looking at the innovation of MetaDAO's financing mechanism.

Author: KarenZ, Foresight News

Last week (October 10), the privacy protocol Umbra completed its community sale on the MetaDAO platform. This public sale attracted over 10,000 participants, with a total subscription amount nearing $155 million, which is 200 times the project's planned minimum funding amount.

After the sale ends, the project party sets the actual financing cap at 3 million USD, and ultimately each subscribing user only receives about 2% of the subscription quota, with the remaining funds returned as originally intended.

What is even more noteworthy is that, even against the backdrop of a significant correction in the cryptocurrency market, the price of the UMBRA token has shown strong resilience: the current price (1.5 USD) has increased by 4 times from the initial issuance price (0.3 USD). This performance not only confirms the market's confidence in the privacy sector but also highlights the attractiveness of MetaDAO's unique financing model.

At the same time, the MetaDAO platform token META is also not to be outdone, with its market value surpassing 200 million dollars today, setting a new historical high, and its increase this month has exceeded 4 times.

As a Solana ecosystem privacy protocol built on Arcium technology, Umbra's popularity is closely tied to the explosive benefits of the privacy sector. However, when the market's attention focuses on Umbra itself, its issued MetaDAO platform may hold even greater opportunities — this financing tool, which claims to prevent rug pulls, along with its organization that emphasizes "market-oriented governance," is paving a new path for token issuance in crypto projects.

MetaDAO: From "Zero VC Start" to Paradigm Endorsement

The starting point of MetaDAO is not a luxurious financing kickoff like traditional crypto projects, but rather an exploration of solutions to the pain points of financing in the crypto industry.

Traditional ICOs have long faced three major pain points: founders lack motivation to continue working after receiving a fixed token allocation, early investors engage in "quick in and out" practices that lead to price dumping, and communities lack stickiness, resulting in projects easily falling into the trap of "initial hype but long-term stagnation." MetaDAO is designed specifically to address these issues, with the core logic of replacing "single-token voting" with "market-driven governance" and substituting "performance-linked incentives" for "fixed token allocations."

• Birth and Early Development: In October 2022, founder Proph3t (@metaproph3t) began developing this organization focused on Futarchy governance (i.e., the "market decision system," which will be explained in detail later) and officially established it in November 2023. In the initial phase, it launched by airdropping tokens to about 65 people and using $10,000 as the initial treasury funds.
• Milestone Financing: In August 2024, MetaDAO achieved a key breakthrough - securing $2.2 million in seed funding led by the crypto venture giant Paradigm. Paradigm's favor for MetaDAO primarily stems from the strong alignment of its Futarchy governance model with Paradigm's positioning in the prediction market space. At that time, CoinDesk cited MetaDAO's anonymous founder Proph3t stating that Paradigm would hold 3,035 META tokens, accounting for 14.6% of the total META supply, making it the largest single holder of META. Approximately 30 angel investors additionally purchased 965 META tokens, bringing the total funding amount to $2,229,950.
• Team Streamlining: According to the latest proposal on MetaDAO, the team is small, with core members including Proph3t, co-founder and engineer Kollan, a part-time designer, and an intern responsible for Twitter operations. Currently, MetaDAO has cash reserves of approximately 1.8 million dollars, which can support operations for about 24 months at the current operational scale. Note: Proph3t's recent proposal to "sell 6 million dollars worth of META tokens at a discount to expand the team and increase operational reserves" was rejected by the community.

MetaDAO Operating Mechanism

In simple terms, MetaDAO is not just a "financing tool"; it transforms project founders and investors from "short-term profit seekers" to "long-term co-builders." It allows founders to secure initial funding while ensuring that they must deliver a successful project to gain more returns. At the same time, it gives investors the opportunity to participate in early-stage projects and avoids "capital loss" through transparent rules.

MetaDAO has currently developed into a Launchpad platform and governance system based on Solana, with the core goal of addressing pain points in traditional cryptocurrency financing such as "Rug" risks and incentive misalignment. The new MetaDAO platform will officially open to the public on October 6, 2025, supporting financing for the first batch of 5 projects.

Anti Rug ICO: Writing "security" into the mechanism

If choosing to issue on MetaDAO, the project team needs to accept some restrictions that may seem unusual from a traditional world perspective. For example, MetaDAO locks risks from several dimensions:

• Funds Locked in "Futarchy Governance Vault": The USDC raised from financing will not be given directly to the founders but will be deposited into a vault managed by Futarchy. Each large expenditure must be validated by the market (i.e., traders must believe that the expenditure will enhance the token's value for it to be approved).
• IP Ownership Entity: The core assets of the project (such as domain names, software, social media accounts, etc.) will be transferred to a dedicated legal entity rather than to the founder personally, avoiding the situation where the founder "takes away core assets."
• Founder Earnings Tied to Project Success or Failure: Founders do not receive a large amount of tokens initially, but rather obtain rewards through a "performance tier mechanism" — tokens are unlocked in 5 batches, corresponding to the token price reaching 2 times, 4 times, 8 times, 16 times, and 32 times the ICO price, with the earliest unlocking time not being earlier than 18 months after the ICO.
• Budget Constraint: The team must commit to setting a budget cap (not exceeding one-sixth of the minimum fundraising amount), and expenditures beyond this amount require approval from the governance department.

How to set up the ICO mechanism for ###?

The ICO mechanism design of MetaDAO is ingenious and takes into account the interests of both the project party and the investors to a certain extent:

• Sales Process: The founder must submit information such as the minimum financing limit, monthly budget for the team, and performance grading settings. After a successful application, the project can go live on MetaDAO. Investors have 4 days to subscribe to the project tokens using USDC.
• About the Team Incentive Mechanism: The team can choose to allocate up to 15 million tokens (50% of the initial supply) to a price-based performance mechanism. This performance mechanism is divided into 5 portions: unlocked at 2 times, 4 times, 8 times, 16 times, and 32 times the ICO price, with the earliest unlock time no earlier than 18 months after the ICO (the founders can extend the lock-up period).
• Post-Sale Arrangements: If the project fails to meet the minimum threshold, investors' USDC will be refunded. If the sale is successful, the founders will announce the amount of subscription funds they choose to accept (there is no upper limit during the sale), and the official states that this will provide everyone with a fair opportunity to participate. Quotas will be allocated proportionally, and any remaining funds will be returned in the same manner. All USDC will enter the treasury for market governance, and the authority to mint new tokens will also be transferred to this treasury. The treasury will provide 20% of USDC and 5 million tokens to the liquidity pool.

Note: On the night of the day when the Umbra sale ends, all the allocated tokens will be unlocked and directly distributed to users' wallets, and the remaining funds will also be refunded via the original payment method.

Futarchy Governance: Let the "market" make decisions, not "voting"

MetaDAO does not adopt the traditional DAO's "token voting" (which can easily be manipulated by large holders), but instead uses Futarchy to determine the direction of the project — a governance model that allows "traders to vote with their funds," guiding decisions through prediction markets.

The core logic of this governance is based on the ideas of economist Robin Hanson: people "bet" on the potential impact of proposals on the value of project tokens through trading, thus aggregating collective wisdom and ensuring that only those proposals that the market believes can enhance value will be adopted.

The core logic of MetaDAO's Futarchy governance is:

• Proposal Creation and Activation: For a proposal (such as "Withdraw 1 million USDC from the treasury to develop new features", "Issue new tokens", "Increase / Decrease liquidity", etc.), holders must stake tokens for the proposal to be activated. By default, a proposal requires staking 50,000 tokens (5% of the total ICO) to go live. Staking is only for anti-spam purposes, with no locking or forfeiture risks, and only one proposal can be active at the same time.
• Trading Phase: After meeting the staking conditions, the project will withdraw half of the liquidity from the spot market and transfer it to the proposed conditional market. Traders can conduct conditional trading within 3 days. If they believe the proposal can enhance the token's value, they buy tokens from the "success market"; otherwise, they buy tokens from the "failure market".
• Final judgment through "lagging price TWAP": To make the proposal approval more cautious, MetaDAO has set a threshold that makes the difficulty of passing the proposal slightly higher than failure (1.5% threshold). The core logic of the entire process is: use "lagging TWAP" to filter manipulation, use the "1.5% threshold" to ensure consensus strength, and ultimately allow the real judgment of market funds to determine whether the proposal meets the long-term value of the project.

Summary

In the current trend of "short-term profit-seeking" in the crypto industry, MetaDAO's innovation lies in: using "mechanism design" to lock in security to a certain extent, and replacing "zero-sum games" with "interest binding," hoping to create an "interest community" between founders and investors.

For founders who want to work diligently, MetaDAO offers a path of "fair financing without relying on VCs"; for investors seeking security, MetaDAO reduces the risk of "being Rugged" through multi-dimensional rules.

However, it should be noted that the cryptocurrency market is highly volatile, and no mechanism is a "universal insurance": even with protective mechanisms in place, the price of project tokens may still decline significantly due to factors such as market trends, business progress, and the full unlocking of public sales; at the same time, governance can only prevent "malicious behavior by the team" and cannot guarantee the inevitable success of the project — investors still need to make comprehensive judgments based on the project's fundamentals and the prospects of the sector.

In the next article, the author will focus on a new project that plans to launch a public sale on MetaDAO.