Umbra over-subscribed by 200 times, observing the innovation of MetaDAO's financing mechanism.

Original 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 total subscriptions nearing 155 million USD, which is 200 times the project's planned minimum financing amount.

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

What is even more noteworthy is that, even amidst the significant pullback in the cryptocurrency market, the price of the UMBRA token has shown strong resilience: the current price (1.5 dollars) has increased by 4 times from the initial issue price (0.3 dollars). 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 making its presence felt, with a market value that briefly surpassed 200 million dollars today, setting a new historical high, and an increase of over 4 times this month alone.

As a privacy protocol built on Arcium technology within the Solana ecosystem, Umbra's popularity is closely tied to the explosive benefits of the privacy sector. However, when the market's attention is focused on Umbra itself, its issued MetaDAO platform may hide even greater opportunities—this financing tool, which claims to prevent Rug pulls and is organized with "market-based governance," is paving a new path for token issuance in crypto projects.

MetaDAO: From 'Zero VC Start' to Paradigm Support

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

Traditional ICOs have long faced three major pain points: founders lack motivation to continue their work after receiving a fixed token allocation, early investors engage in "quick in and out" actions that drive the price down, and communities lack stickiness, causing projects to easily fall 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 replacing "fixed token distribution" with "performance-linked incentives."

Birth and Early Development: In October 2022, the founder Proph3t (@metaproph3t) began developing an organization focused on Futarchy governance (i.e., "market decision system," which will be explained in detail later) and was officially established in November 2023. Initially, it started by airdropping tokens to about 65 people and using $10,000 as the initial treasury fund.

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 preference for MetaDAO is primarily due to the strong alignment between its Futarchy governance model and Paradigm's positioning in the prediction market space. At the time, CoinDesk quoted 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 also purchased an additional 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's cash reserves are approximately $1.8 million, which can support operations for about 24 months at the current operational scale. Note: Proph3t's recent proposal to "sell $6 million 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 "fundraising tool"; it transforms project founders and investors from "short-term profit seekers" into "long-term co-builders." It allows founders to obtain startup capital while ensuring, through mechanisms, that they must successfully execute the project to gain more returns; it gives investors the opportunity to participate in early projects while avoiding the risk of "losing their principal" through transparent rules.

MetaDAO has currently evolved 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 misaligned incentives. The new MetaDAO platform will officially open to the public on October 6, 2025, and will initially support the financing of 5 projects.

Anti-Rug ICO: Writing "security" into the mechanism

If you choose 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 the following dimensions:

Funds locked in the "Futarchy Governance Treasury": The USDC raised from financing will not be directly given to the founders, but will be stored in a treasury managed by Futarchy, and each large expenditure must be verified by the market (i.e., traders must believe that the expenditure can enhance the token's value for it to pass).

IP Ownership Entity: The core assets of the project (domain names, software, social media accounts, etc.) will be transferred to a dedicated legal entity rather than to the individual founders, preventing the founders from "taking the core assets away."

Founders' earnings are tied to the success or failure of the project: founders do not receive a large amount of tokens at the beginning, but instead earn returns through a "performance grading mechanism" — the 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 limit (no more than one-sixth of the minimum fundraising amount), and expenditures exceeding this amount need to be approved by the governance department.

How to set up the ICO mechanism?

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

Sales Process: The founder must submit information such as the minimum financing threshold, monthly team budget, and performance grading set-up. After a successful application, the project can go live on MetaDAO. Investors have 4 days to subscribe to the project tokens using USDC.

Regarding the team incentive mechanism: The team can choose to allocate up to 15 million tokens (50% of the initial supply) based on a price performance mechanism. This performance mechanism is divided into 5 tranches: unlocking at 2x, 4x, 8x, 16x, and 32x the ICO price, with the earliest unlocking time no sooner than 18 months after the ICO (the founders can extend the lock-up period).

Post-sale arrangements: When the project fails to reach 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), which the official claims will provide everyone with a fair opportunity to participate. Quotas will be allocated proportionally, and any remaining funds will be returned to the original source. All USDC will go into 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 tokens from the sale allocation will be unlocked and directly distributed to users' wallets, and the remaining funds will also be refunded through the original payment method.

Futarchy Governance: Let the "market" make decisions instead of "voting"

MetaDAO does not adopt the traditional DAO's "token voting" (which can be easily manipulated by large holders), but instead uses Futarchy to determine the direction of the project — this is 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 idea of economist Robin Hanson: people "bet" on the potential impact of proposals on the value of project tokens through trading, thereby aggregating collective wisdom and ensuring that only those proposals deemed valuable by the market 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 the staking of 50,000 tokens (5% of the total ICO amount) to go live. Staking is only used for anti-spam, with no locking or forfeiture risk, and only one proposal can be active at a 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 engage in conditional trading within 3 days. If they believe the proposal will enhance the token's value, they will buy tokens from the "success market"; otherwise, they will buy tokens from the "failure market."

The final judgment is made through the "lagging price TWAP": To make the approval of proposals more prudent, MetaDAO has set a threshold, making it slightly more difficult for proposals to pass than to fail (1.5% threshold). The core logic of the entire process is: using "lagging TWAP" to filter manipulation, ensuring consensus strength with the "1.5% threshold", and ultimately allowing the true judgment of market funds to determine whether the proposal aligns with the project's long-term value.

Summary

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

For founders who want to focus on doing solid work, 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 plummet due to factors such as market trends, business progress, and the complete unlocking of public sales; at the same time, governance can only guard against "malicious actions 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 the new project that is planned to launch a public sale on MetaDAO.