Tarun Chitra is a big name in decentralized finance. In 2018, he founded the crypto risk management platform Gauntlet, which grew to a $1 billion valuation as of last year, and then in 2022 he cofounded Robot Ventures, a venture capital firm that backs fintech and crypto companies. Now, Chitra is back again with his newest project: Aera, a decentralized protocol to help decentralized autonomous organizations, or DAOs, manage their finances.
On Thursday, Chitra, who once worked at a Wall Street trading firm, announced that the Aera Foundation raised $8 million from the crypto offshoots of two investment giants: Bain Capital and Jump Trading. Bain Capital Crypto led the round, which was exclusively a pre-sale of Aera's cryptocurrency, Chitra told Fortune. He declined to provide any details about a valuation.
“The Aera team has developed a much-needed solution perfect for crypto-native organizations looking to responsibly manage their treasuries,” Stefan Cohen, partner at Bain Capital Crypto, said in a statement.
DAOs, DeFi, and crowdsourced investing
Decentralized finance, or DeFi, is as it sounds: a financial system designed to let traders buy from and sell to each other without having to go through a trusted intermediary. Within this ecosystem are a crypto variation on traditional companies known as decentralized autonomous organizations, or DAOs.
DAOs aspire to a democratic corporate structure in which decisions are made by a group of stakeholders, not one central authority. But like traditional companies, DAOs have an endowment, or a collection of funds to dole out and spend on projects, investments, or new cryptocurrencies.
And here's the rub, according to Chitra: To manage these endowments—which in some cases amount to hundreds of millions of dollars—DAOs either need to sacrifice speed or decentralization. If they want to manage funds quickly, they need to hire a few fund managers. And if they want to adhere to the ethos of decentralization, they need to laboriously vote on every decision.
This is what Aera aims to solve. The new protocol promises to let DAOs both quickly respond to market swings and not sacrifice decentralization—a service that can be loosely summarized as crowdsourced portfolio management. DAOs can plug into Aera and get crowdsourced advice about how to manage their often considerable endowments.
Ultimately, Chitra, sitting in his office off of the main drag in Manhattan's Chinatown, said that he believes he's designed a solution, not for a niche organizational structure in crypto, but for "the future of the LLC."
