As a small Rep holder, why participate?

When dxDAO launched I thought it was cool idea and participated in the initial distribution plan, acquiring a little over 300 Reputation. I voted on a few early proposals but quickly realized there wasn’t much point. For one, it took a fair amount of time to educate myself on the proposals in order to vote intelligently. It also cost me money to pay the gas for my votes. Since the top few REP holders can dominate any vote, it became clear that the dao didn’t actually value my participation. Sure, I earned a little REP for the effort, but as it has no market value and no other entitlement one can’t even cover one’s gas costs with it, not to mention the time investment.

Given the above, its more than a little disingenuous to state that REP holders are a “sovereign collective” and have a “right and implicit duty to govern and direct the collective.” Almost no one’s dao participation matters in any real sense, and this is reiterated by the fact that the dao provides no monetary value to holding REP and disallows a market therein, while ironically expecting its members to donate their labor and attention to its governance. The dao, therefore, is an oligarchy with a vast base of disenfranchised “owners” with no effective rights or privileges.

(By the way, it’s pretty lame that the top 30 holders have no name, description, or social verification in Alchemy. These addresses hold over 75% of the REP.)

No amount of my efforts will ever garner me enough REP to matter in the decision making process. And the structure of the institution insures that I and others like me will not incur any tangible benefit from being a minority ownership voice. The implicit idea that keeping REP valueless means that large REP holders are not motivated by monetary gain is rather naive.

If the dxDAO wants this governance experiment to become more than decentralization theatre, then I humbly propose that it consider some of the following changes:

  1. At the very least, remove gas costs for voting. (eg. reimbursement of gas costs or some L2 solution.) This merely removes the biggest disincentive to participation, but does nothing to incentivize it.

  2. A claim to some revenue for active participation. eg. share of revenue from DAO-owned DXD, burn REP to receive pro-rata share of the DAO’s DXD.

  3. A permissionless way to acquire REP. eg. make it transferable, mint new REP by depositing DXD into the DAO. There has to be a credible way to challenge the dominance of the oligarchy.

(FWIW, I was motivated to write this after reading some comments on this thread.)

d.

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Perhaps we can put in place a tighter distribution of REP.
For me a difference of 1 to 7 would be respectable, so everyone’s voice would be heard.

A vote on an L2 solution even a simple state channel, and then do something like UMA and consider any vote as accepted unless someone opposes it.
But that would require a big rework of DAOstack :confused:

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Gasless voting is actually being worked on by developers working for DXdao in cooperation with DAOstack. If you care to join the conversation on this, the appropriate venues are the #development channel on keybase or the weekly open dev call that happens at 15:00 UTC every Tuesday.

I completely agree with this. REP holders should get rewarded for the hard work of governance. Since Mesa and Omen are only a few weeks or few months old, and DXdao has yet to claim revenue, I think what would be appropriate at this juncture would be to outline a plan of how much revenue should go towards rewarding active REP holders, and maybe even inactive ones to some extent.

I am not in favor of making REP transferable. I think it’s a healthy dichotomy that REP is earned and DXD is bought. However, I do think it’s important that the collective faces the oligarchy criticism head on. As I cited in the linked post, the top 9 addresses currently have > 50% of the voting power. On the flip side of this, I think it’s also important to acknowledge that building a viable, well-functioning, decentralized community is hard and there’s no quick fix. I for one believe that the DXdao community is genuine in its efforts to become more decentralized. And if you are a person who is respectful of others and willing and able to contribute to the effort, then there are ways to earn REP and a larger stake in the governance of DXdao. And hopefully soon there will be a free way to participate in voting as a REP holder.

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Thanks for the thoughtful replies, John in particular. You acknowledged my point of view and responded with grace instead of defensiveness, which I appreciate.

It is good to know that a gas solution is already in the works. I’ll lurk in that chat a bit to get more informed on the effort.

I should have noted in my prior post that the dao has done great work on the Omen and Mesa products too. The IDO use case for Mesa is particularly interesting given the current market and the more believably decentralized the platform is the better.

I agree, it’s hard to do and IMO is probably made harder due to the nature of the REP distribution history. REP whales will be whales forever and new whales can only be created by the existing whales gifting them the status. It will only get harder to decentralize as the dao controls more and more value. (DigixDAO is an interesting case study of a situation to avoid. The minority was so disaffected and powerless that the outcry was loud enough that Digix finally just allowed the dao to be dissolved even though the dao couldn’t force them to do it.)

I have no reason to think otherwise, but would be more confident of this if top holders at least provided name and description information via the existing governance UI and their voting record was easily viewable on their profile page.

Very fair point. Looking for such a plan is what brought me to this forum. It’d be good to have one published for DXD too, which I also could not find.

I hear you, I do. Except, the overwhelming majority of REP wasn’t earned really. It was gifted to a technocratic elite (I include myself in this) for a very nominal opportunity cost.

Thanks, I’ll keep DXdao on my radar and consider more dao participation in the future as the incentives become clearer. I wanted to share my perspective with the community because I believe I am the sort of person the dao would want to participate (in crypto since 2015, was a senior engineer at a crypto startup, have a senior engineering role outside of crypto, etc.) and I suspect there are a lot more dormant REP holders like me. I could be wrong on this, but I don’t think you’ll get this kind of person to participate upfront on the vague hope of remuneration in the indeterminate future. There are just too many good opportunities out there vying for attention – and most get you some governance rights along with your capital investment.

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I completely agree with this. REP holders should get rewarded for the hard work of governance. Since Mesa and Omen are only a few weeks or few months old, and DXdao has yet to claim revenue, I think what would be appropriate at this juncture would be to outline a plan of how much revenue should go towards rewarding active REP holders, and maybe even inactive ones to some extent.

Let’s back it up. Don’t forget we have this little token called DXD. Before REP holders/participants get a revenue split, we need to talk about how to effectively treat DXD as how it is- shares in the DAO. Keep in mind that DXD holders have no voting rights and generate no REP. The ONLY utility it’s supposed to have for holders right now is revenue share.

Now, if DXD holders also received REP, DXdao I think would see much greater activity in terms of revenue generating proposal activity.

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My intention was to address the points about REP in the post and I had no intention of minimizing DXD. I didn’t say so above, but I should also say that I probably wouldn’t support burning REP for DXD.

There’s a couple approaches to this. I believe there is already a “lock for REP” scheme that was used in DXdao’s initial staking period and I think something similar being used by Nectar DAO. Development work has also been started on a voting contract which would enable DXD holders as a whole to have control of an amount of REP, and then DXD votes would determine how that REP votes on DXdao proposals. There’s still a decent amount of work here and conversations underway to see what part DAOstack can play in enabling this, but I am hopeful we will soon have a roadmap for implementing voting rights for DXD holders.

Also @jeffthebaker, I am half way through a more in depth post discussing several ways the DXdao can help protect and support the interests of DXD holders.

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Am I hearing that you want to get back into crypto full time? :slight_smile: The DXdao can use some more active devs and exciting work being done. There are also opportunities to get involved in the governance discussions and help shape the discussion on these incentives.

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I’m game, but my wife not so much… :grinning: Might be able to contribute some dev work part time but not really clear where/if that’s needed.

I attended Tuesday’s call and have some thoughts in response to that discussion as it pertains to the above, but will take those over to that thread.

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Is there a mechanism to revoke REP from addresses if that address has not voted in e.g. > 6 months? This seems like an easy enough way to guard against oligopoly

Something I’ve been thinking of and would love community feedback: is it possible to run an implementation of DAOstack that would allow us to use DXD instead of GEN to boost proposals? As a DXD holder I want relevant proposals to pass and I want to align my views with the DAO as a whole, but I have no interest in holding GEN. I would much rather use my native DXD holdings to boost DXdao proposals.

Since, in theory, DXD holders would value their DXD higher than their GEN I think it would further incentivize relevant proposals to be boosted.

I think this use of DXD in governance can go hand in hand with locking for REP or some of the other proposals that have been put forward. There may be ways of gaming this if a DXD whale locks some REP and boosts his/her own proposals just to have them pass, but that seems to be an issue with holographic consensus rather than this idea in particular.

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Revoking REP in that way would solidify the existing oligarchy since the distribution of power among voting addys is very lopsided. I’ve been trying to argue that this dormant REP could be a strong source for pulling in new governance participants, if they can be incentivized properly. The initial distribution scheme has a decent claim to sybil-resistance and targeted those who by now should be sophisticated Ethereum OGs.

Of the 423 REP holders, 12% have voted between 1-4 times. This is 17% of the REP supply. These addys are like me, they tried the dao and (presumably) left. Removing the cost to vote might bring these people back. In total, these addys hold over $5MM in ETH (the top holder alone controls $4MM of this though).

Of the 423 REP holders, 78% (330 addys) have never voted. This is 30% of the REP supply. In total, these addys hold almost $4MM in ETH (the top holder controls $1MM of this).

Just bringing in the top 10 holders from each bucket would be a boon to decentralization. Plus, properly incentivizing these REP holders to participate would not only make the dao governance more decentralized, but if even a small fraction of their capital flowed into DXD as a result it would be a big support on the price as the pump of the last two days shows.

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Agree with implementing voting rights for DXD holders.

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No true DAO with REP oligarchy, I agree.
DXD must be only one native coin in all DXdao ecosystem.

DXD holder put they money on the table and sponsor all REP salaries, all products development and etc. and do not have any vote and have only a dream, that maybe, someday REP holders decide to share from some resource funny 10% of revenue, maybe not.

Dxdao will not attract TRUE supporters and big investments while there is some REP oligarchy and not clear use case for native coin of Dxdao ecosystem - DXD.

You wanna have vote ? Put your money on the table.
You wanna share of revenue ? Put your money on the table.
When your money on the table you will be more initiative to vote and participates in DAO.

mint new REP by depositing DXD into the DAO. There has to be a credible way to challenge the dominance of the oligarchy.

this is probably the easiest and best way that aligns incentives of this DAO, in my view, as opposed to giving DXD full power.

for 1 - new comers can not suddenly obtain a large amount of voting power
and 2 - but they’re not exuded entirely just because a 2019 snap shot.

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