How Common Wealth’s technology works is firstly by their council members sourcing projects to invest in. These council members I believe will be top industry figures who will fully vet the proposed projects and be able to obtain Common Wealth the early stage deal flow needed.
Community investors in the DAO will then vote on which projects get invested in, each member’s voting power will be proportionate to their investment inside the fund.
Users of Common Wealth will then be able to invest in one of the funds via credit/debit cards or crypto in the figure range of anywhere between $5 to $50 million, truly demonstrating a model that is inclusive and fair to all.
Common Wealth will have 3 different fund types to invest in – Themed Funds eg. Metaverse, Community Funds – which will be funded by platform transaction fees and profits distributed back to $WLTH holders, and an Evergreen Fund – described as ‘a fund of funds’ for casual investors to gain exposure to a diverse range of assets.
A big challenge for the average investor has always been to maintain liquidity while their funds are being used and awaiting returns, in some cases this can be for a very long period of time. The most interesting part I find about the use of Common Wealth’s technology is that it solves this previous problem the investor has always faced in regards to liquidity and they are achieving this via using NFT technology.
When someone invests in a Common Wealth fund they will receive a ‘Fund NFT’ representing their stake in the fund. This ‘Fund NFT’ can be sold in whole or it can be fractionalised at any time on Common Wealth platform and secondary markets such as Open Sea. This use of NFT technology will ensure liquidity at all times which is very reassuring for investors like myself who do not want to be stuck in position with my capital tied up for many years.
Common Wealth have attempted to use their technology to improve and make fairer the fee model compared to the traditional VC fee structure. Traditional VC’s will charge 2% management fee’s per year and a 20% fee on any investment profits. Commonwealth are charging a 2% management fee per year that is capped at 5 years and a carry fee of 50% that can be reduced by 10% through staking $WLTH tokens. I personally think a 50% carry fee seems a bit excessive making me question whether this is actually a fairer model compared to the traditional format.
Overall I would say this technology is designed and thought out well. It seems to achieved Common Wealth’s goal of offering equal opportunities to everyone regardless of whether they have $10 or $100,000. I can’t wait to give it a try. Show Less
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