Just over three weeks ago, Mike Dudas had an idea: Create a decentralized autonomous organization for golf enthusiasts, with the goal of raising funds to buy a golf course. It would be like a typical country club, but blockchain-based, allowing members to have voting rights and ideally, more control.
Dudas, an investor already well known in the crypto community, told his friends Jim Daily and Chris Maddern, who were quickly sold after hearing the concept. LinksDAO was born, with a mission to create "one of the world's greatest golf clubs."
"We can more widely democratize the country club membership experience," Daily, 39, tells CNBC Make It.
In theory, a DAO is a blockchain-based collective that isn't governed by one person or entity. Instead, its rules and governance are coded in smart contracts and cannot be changed unless voted upon by the DAO's members.
The next step for LinksDAO was raising money. Dudas, Daily and Maddern worked with a group of "extraordinary talented people" to develop the DAO and a collection of nonfungible tokens, or NFTs, to be sold to raise funds for the project.
The team dropped the collection of 9,090 NFTs on Saturday and in 48 hours, Daily says they earned about $10.4 million from sales. CNBC reviewed a document that confirms the amount, but could not independently verify that it belongs to the DAO.
"We have so many first-time NFT buyers. I think that's amazing, because we're bringing a lot of new people into the crypto and NFT space," Daily, who is also the president of media platform Teads, says. "The enthusiasm around this project has been overwhelming."
LinksDAO earns royalties on secondary sales of the NFTs, and has already garnered an additional 83 ether from the market, or about $311,000 at current prices, it tweeted on Tuesday. In total, it says it has now raised close to $11 million.
Funds from the sale will go toward forming the DAO, operational costs and legal fees, Daily says. Proceeds will not go toward buying a physical golf course just yet.
"We'll be raising additional funds to buy the actual course," he says. "The initial funds are really to spin up the operations necessary to achieve our goals."
The NFTs were sold at two price tiers: 6,363 "leisure membership" NFTs went for 0.18 ether, or $674, each and 2,727 "global membership" NFTs sold for 0.72 ether, or $2,699, each. Each tier promised buyers certain perks, including governance rights for LinksDAO, access to events and other prizes.
However, the NFTs do not actually grant investors membership to any potential physical golf course or country club that LinksDAO may buy in the future. Rather, NFT holders will be able to buy membership once it's available, Daily says.
After all, LinksDAO is only a few weeks old, and no real estate has been purchased. It's not even truly operating as a DAO yet. "There's still a lot to be worked out here," Daily says. "It's a grand experiment that we're doing here as a collective."
These unknowns are somewhat common for new DAOs since each requires members to trust the organization's founders and mission. In this case, LinksDAO members are betting that its core contributors will follow through on their promises of buying a golf course and providing perks.
But with any DAO, there's always a risk of a project not working out. Investors should do thorough research before parting with their money and invest only what they can afford to lose.
However, LinksDAO is taking certain safety precautions.
The organization is keeping all the money from the NFT sale on a platform called Gnosis Safe with a multi-sig. This means that the digital safe requires signatures from multiple people to move any funds. Dudas, Daily and Maddern are three of the eight people on the multi-sig, Daily says.
It also already formed a C corporation, which will be important if it buys a physical golf course, Daily says. He didn't specify more regarding legality.
Looking ahead, LinksDAO plans to organize into an official DAO in early 2022, according to its website, and launch a governance token, which will grant voting rights to holders. It also hopes to buy a physical golf course by the end of the year, and in the meantime, potentially buy one in the metaverse, Daily says.
"We're going to change the way that a very established type of organization, such as a country club, and what can be considered a pretty stodgy sport, which is golf, is seen," he says. "It's going to be huge."