The hybrid smart contracting model is defective because VCs are partially incentivized to fund and stake only the best deals while staking on less optimal deals that the market mostly funds, which undermines their long term reputation accumulation.
Source quote, verbatim
The problem with this model is that VCs are incentivized partially to fund and stake only on the best deals and stake on the less optimal deals that are mostly funded by the market. This undermines their long-term reputation accumulation
From
Wulf A. Kaal, REPUTATION AS CAPITAL – How Decentralized Autonomous Organizations Address Shortcomings in the Ventu (2021), V.3. Hybrid VC Model with Smart Contracting, p. 21 https://ssrn.com/abstract=3962614 · source PDF
Cite as
Wulf A. Kaal, REPUTATION AS CAPITAL – How Decentralized Autonomous Organizations Address Shortcomings in the Ventu (2021). SSRN: https://ssrn.com/abstract=3962614
Holds when
models where VCs can stake reputation without proportionate capital commitment
Classification
failuresupport: arguedfailure: Reputation gaming through selective stakingfamily: reputation-system-gamingai-and-agentsrisk-and-incentivesreputationregulatory-failuredao
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