VeradiVerdict - Issue #187
Web3-native businesses, such as DAOs, are launching and growing at an unprecedented rate. The aggregate AUM of DAOs grew 40-fold in 2021, peaking at over $16 billion by the end of the year, while DAO membership grew from 13k to nearly 1.6 million participants.
Despite the growing popularity of web3 business models, most of these businesses have poor processes and infrastructures for handling their finances. Tasks like payroll, tax reporting, and tracking transactions are often handled via hacky solutions like an Excel spreadsheet, which are extremely error-prone and unsustainable as businesses grow in size and complexity.
Multis is a new crypto asset management platform designed specifically for web3 businesses and DAOs. In the 2 weeks after the project’s launch, more than 300 organizations have set up Multis accounts, including Compound Labs, The Sandbox, and Teller Finance. The project has raised $7 million in funding from Sequoia Capital, Y Combinator, MakerDAO, Ryan Selkis, Jack Altman, and several other prominent investors across both web2 and web3.
Multis is built on top of Gnosis Safe––a powerful smart contract wallet with features like multisig transactions, security via hardware wallets, and native integrations with DeFi protocols. Gnosis has become the industry standard for how crypto organizations hold their assets, with over $86 billion worth of digital assets held in Gnosis Safe.
Multis integrates with a business’s Gnosis Safe and provides teams with greater visibility and control over their finances, through features around:
Monitoring assets, inflows and outflows, and balance histories across a business’s various wallets on different blockchains
Analyzing transactions through custom annotations and labels, enabling teams to easily search & filter their transaction history
Simplified accounting, by allowing teams to export transaction history as CSVs or directly import transactions into QuickBooks
Collaborating with other team members, by setting up real-time notifications for multisig transactions or sharing transaction data to external accountants with granular permissions
Setting up automated workflows and payments for core business functions, to streamline processes like payroll and reporting
The Multis team is currently building out even more functionality to streamline financial operations for web3 businesses, especially around ramps between crypto and fiat. Soon, Multis will allow businesses to easily integrate their wallets with USD checking accounts, through a partnership with an FDIC-insured bank, and to issue debit cards for its employees with custom controls.
In sum, by minimizing the overhead around managing finances, Multis empowers web3 businesses to utilize their capital more securely, transparently, and efficiently than ever before, allowing these organizations to grow sustainably and focus on their core visions instead of operational minutiae.
The Rise of Web3-Native Businesses
With the ever-increasing popularity of crypto and DeFi, web3-native businesses––especially DAOs––are launching and growing at an unprecedented rate. In 2021, DeepDAO, a popular DAO analytics site, reported that DAO assets under management (AUM) grew 40-fold, from $400m in January to over $16 billion in December; DAO membership also surged from 13 thousand to nearly 1.6 million participants by the end of the year. More and more organizations are opting for decentralized governance over corporate bureaucracy and for token-based treasuries instead of assets custodied by a bank.
Despite the growing momentum around web3-native businesses, there is still a significant lack of tooling for how these organizations handle their finances. For tasks like managing payroll, tracking cash flow, and producing tax reports, many of these organizations still resort to flimsy tools, like Excel spreadsheets or hacky software built in-house. These solutions are highly error-prone, allow for misuse of funds, and require considerable operational overhead, making them unsustainable for businesses with lots of individuals and substantial AUM. For DAOs and other web3-native businesses to flourish and grow sustainably, there needs to be a richer, more robust software layer for how these organizations manage their finances.
What is Multis?
Multis is a new crypto asset management platform designed specifically for web3 businesses and DAOs. The platform allows organizations to monitor crypto assets across various wallets and blockchains, simplifies much of the complexity around crypto accounting, and makes it easier than ever for teams to have granular insights into their spending and cash flow.
The project has raised $7 million in funding from Sequoia Capital, Y Combinator, MakerDAO, Ryan Selkis, Jack Altman, and several other prominent investors across both web2 and web3.
How does Multis work?
Multis is built on top of the Gnosis Safe: the current standard for how web3 businesses control their funds. Gnosis is an incredibly powerful smart contract wallet which allows businesses to easily implement multi-party control of funds, enhanced security via hardware wallets, easy-to-use integrations with DeFi protocols, and much more. To date, more than $86 billion of digital assets are held on Gnosis Safe, by the likes of ENS, ConsenSys, Aave, SushiSwap, and more.
Multis can integrate with businesses’ existing Gnosis wallet or can help them create new wallet(s) to store their funds. From there, Multis provides its users with greater visibility & control of their crypto finances, through features like:
Monitoring: Users can easily view assets, inflows and outflows, gains and losses, and balance history across multiple wallets on Ethereum, Bitcoin, Binance Smart Chain (BSC), and Polygon.
Transaction Analytics: Users can annotate transactions across their various wallets with custom notes, spending categories, and file attachments like invoices. They can also search and filter their transactions by wallet, category, blockchain, sender or recipient, and more.
Accounting: Users can export a complete history of their transactions in a CSV format or can alternatively directly import transactions to Quickbooks via Multis’ integration (in beta). Businesses can also assign admin or read-only permissions for transaction history to their accounting team.
Collaboration: Users can invite teammates & external accountants with varying permissions to view transaction histories and wallets. Users can also enable real-time notifications for transactions that might require approval, such as transactions from a multi-sig wallet. Teams can also set up workflows to issue mass payments to up to 60 Ethereum addresses, simplifying processes like payroll.
A Sample Multis Dashboard
What’s next for the project?
In just two weeks after Multis’ public launch, more than 300 web3 businesses have created accounts on Multis’ platform. These include Compound Finance (a money market), The Sandbox (a gaming platform), and Teller Finance (an uncollateralized borrowing protocol); executives from all have already left rave reviews about how Multis simplifies their financial operations.
As Multis onboards more web3 businesses onto their platform, the team is building out additional workflows to help simplify crypto asset management––especially around easy-to-use ramps between crypto and fiat. For example, Multis will soon allow businesses to easily off-ramp from crypto into USD checking accounts, through a partnership with an FDIC-insured bank, and to issue debit cards with custom controls to enable team members to spend USD responsibly from the business’s crypto balance.
DAOs and other web3-native businesses are pushing the boundaries for how organizations control and utilize their capital. Unfortunately, the tools for how the vast majority of these businesses manage their finances remain unsophisticated, difficult to maintain, and unscalable as these businesses grow in size and complexity. As Compound Labs CEO Robert Leshner puts it, “crypto business operations are the unspoken pet-peeve of DeFi entrepreneurs.”
Multis makes it easier than ever for web3 businesses to have complete, granular visibility into and control of their finances. The platform greatly extends the functionality of Gnosis Safe to allow teams to easily track balances across wallets and blockchains, record and annotate transaction history, and to streamline and collaborate on central accounting workflows. Soon, Multis will further enhance the capabilities of web3 businesses by allowing them to easily integrate with USD checking accounts, enabling debit cards for team members, wire transfers to partners, and more. Ultimately, by minimizing the overhead around managing finances, Multis empowers web3 businesses to utilize their capital more securely, transparently, and efficiently than ever before, allowing these businesses to grow sustainably and to focus on their core visions instead of operational minutiae.
- Paul Veradittakit
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Hi, I’m Paul Veradittakit, a Partner at Pantera Capital, one of the oldest and largest institutional investors focused on investing in blockchain companies and cryptocurrencies. I’ve been in the industry since 2014, and the firm invests in equity, early stage token projects, and liquid cryptocurrencies on exchanges. I focus on early-stage investments and share my thoughts on what’s going on in the industry in this weekly newsletter.