Written by Steve Larsen, CPA, CFP®
It sucks to get left behind, but it happens to all of us.
Sometimes tickets to the big event are sold out, and other times you wake up to a social media alert informing you the party of the century took place without you last night.
Once, my friend Kevin McCallister missed out on a family trip to France because his alarm didn’t go off. There are a variety of reasons we get left behind, or aren’t invited, and none of them feel good.
The financial industry has spent decades leaving the average investor out in the cold.
Wall Street banks create powerful solutions exclusively for the wealthy, while selling high-commission products to the suckers who wander into their local branches.
Venture Capital firms raise money from Accredited Investors to jumpstart companies that are eventually worth billions. Only after they have gone up in value to $1 billion or more do we have a chance to invest in them when they go public. Of course, this is when the VC’s get to cash out, dumping their stock on the retail investor.
Wall Street and your government have a different plan in mind for you, however.
It’s called index investing, and they have spared no expense or regulation ensuring your money flows into these products.
Index investing is used by those who don’t have time to follow the financial markets, often because they are building our homes, patrolling our streets, or cleaning our restaurants.
It’s a good fit for my friend Kevin because he’s clipping coupons and keeping his home safe, he doesn’t have time to learn the details of the stock market.
There are worse places to put your money, to be certain, but index investing isn’t a story of lifting people out of poverty or offering class mobility to those who were dealt a rotten hand. It’s part of a grand bargain that says, “if you reduce your lifestyle and invest 15% of your income in low-cost indexes, one day you can retire and keep that same reduced lifestyle.”
We can do so much better than this.
The promise of digital assets is that we finally have a system focused on the creation of wealth for everybody, not the multiplication of wealth for those that already have it. We have an opportunity to bring financial freedom to corners of the world that have never dared hope for it.
A blockchain-focused economy provides us with the tools to change the lives of billions of people around the world. Our responsibility is to avoid recreating the same rigged financial system that has failed in the past, only this time with hipster branding, clever memes, and 24/7 access.
The truck drivers, administrative assistants, and hospital workers everywhere are keeping the economy running while we figure out how to harness the power of this new technology.
Simple, unbiased wealth creation strategies are what we owe them in return.
The Three Pillars
Financial indexes were initially intended to simplify stock markets for the casual observer, but have evolved into investment strategies for everyday investors. PlannerDAO has decided to lean into this trend and build an index designed for wealth creation.
More specifically, universal access to wealth creation.
The forthcoming academic paper Digital Asset Opportunity Index: Taking the ETF Revolution Digital (Larsen, et al.) lays out three pillars required for the mass adoption of a wealth-creating digital asset index.
- Zero Fees
- Broad-Market Implementation
- Decentralized Governance
Early efforts at creating a digital asset index have fallen short on at least one of these criteria, and often all three. Most indices are little more than publicity or branding efforts by the sponsor and will not generate new wealth for those who need it most.
Pillar 1: Zero Fees
The PlannerDAO Digital Asset Opportunity Index (PDAO) will forever change the dynamic of who benefits from creating an index. PDAO is offered to the world by PlannerDAO without any fees because it is consistent with our mission of creating a level playing field for everyone trying to establish personal economic freedom.
PDAO is available to trade on Ethereum Mainnet and Polygon and is committed to launching on any blockchain or layer 2 solution that offers secure and affordable transactions.
PDAO is the investment the world will dollar-cost-average a portion of their paycheck into.
Pillar 2: Broad-Market Implementation
The second criterion for a successful Three-Pillar Index is exposure to the broadest selection of investments possible while providing a simple method to implement the strategy. Ideally, trading one symbol (like PDAO) provides instant ownership of all underlying assets in the index.
To achieve broad-market implementation, the PDAO is composed of ERC-20 tokens with sufficient liquidity on Ethereum. PDAO itself is an ERC-20 token.
Crypto indices that include alt-chains ensure the index can only be traded through a custodial exchange. This is unacceptable. PlannerDAO’s mission is economic freedom and wealth creation for all, and PDAO must be accessible from non-custodial wallets.
Broad exposure to digital assets isn’t about diversifying across multiple blockchains, hoping one wins; it demands exposure to all corners of the growing digital ecosystem. To this end, PDAO will launch with the broad sector recommendations introduced in Bringing the ETF Revolution to Digital Assets.
An index for the people needs to go beyond blockchains and decentralized finance. The PDAO introduces NFTs, Media, Gaming, and the Metaverse to the world of index investing.
Pillar 3: Decentralized Governance
If there is something you don’t like about PDAO, I have great news for you: come and help us improve it. PDAO is managed by a Working Group within PlannerDAO, committed to enhancing and evolving the index alongside the digital asset economy, all in a decentralized and transparent manner.
Our DAO has Certified Financial Planners, Certified Public Accountants, and Chartered Financial Analysts who will collaborate to keep the PDAO the most relevant index in the universe (and metaverse).
Each of those credentials requires a fiduciary duty to our clients, a responsibility that applies to managing the index as well.
More importantly, PlannerDAO is composed of Certified Digital Asset Advisors (CDAA) committed to delivering solutions to clients in the safest and most efficient system possible.
The introduction of PDAO is a key part of that system.
Digital assets present the most significant potential for creating wealth all living generations will ever see.
They allow us to rethink how we can deliver investment opportunities to the most significant number of people worldwide, specifically areas where investing and wealth creation are foreign concepts.
With no added fees, transparent governance by a DAO of fiduciaries, and universal access to anyone with an internet connection, PlannerDAO is leading the charge for Three-Pillar Index adoption.
PlannerDAO is a community of financial planners with unwavering conviction we can build a better system for our clients.
We invite traditional index providers to join us in changing the way investment management is delivered to those who need it most.
The barbarians are at the gate, and it’s time for digital asset fiduciaries to hold the line.
After all, if my friend Kevin McCallister can hold off a couple of ornery bandits all by himself, I have no doubt we can stand up to any assault directed at the clients we have sworn to protect.