Bonding curve modifications

why we need continue raising funds?already got about $10m
how many do you want?

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Hi guys, I slept on it and I think I found a method that, if implemented, could satisfy everyone, let me know what you think!

What I think is a bad idea:

  1. Artifical pausing the contract (by raising the minimum_investment to a large number for example). It’s a bad idea because if the price increases on the secondary market above the curve, then if at some point, the dxDAO wants to raise funds again and reset the minimum_investment to a normal value, it will screw basically all the investors who bought on the secondary market at a price > to that of the curve.
  2. Making the curve exponential. For the same reasons I explained above, I think it advantages earlier investors too much compared at the expense of the dxDAO and future investors.

Here is what I think could work:
Implementing a pause() / resume() function controlled by the dxDAO that would allow the dxDAO to pause the curve and to resume it at a later date. The twist being: when resume() is called, the curve would not necessarily start at the latest issuance price but, instead, it would resume at the current secondary market price. If you really want to create artificial scarcity of DXD without harming the dxDAO, I think this is the best way to go:

  1. It protects previous investors because, when paused, no new DXD are minted, preserving a fixed supply of DXD which will let the price rise faster on the secondary market.
  2. It protects future investors because, when resumed, they will have the opportunity to buy at current market price (which is normal) with a price that will increase according to the linear curve.
  3. It protects the dxDAO because, say the DAO pauses when price is 1 and resumes when price is 2, even though it means that the DAO will not have raised funds between price 1 and 2, its ability to keep raising funds starting at price 2 remains intact. Even better, if, for any reason, the price collapses to 0.5 and the dxDAO is in dire need of money, it can resume the curve and the curve will start at 0.5, enabling the dxDAO to refinance itself and continue to operate.

So, in a way, using this mechanism. The dxDAO would abandon some upside fundraising (good for investors) for the insurance of being able to refinance itself if things were to go south at some point. One could even design this pause/resume mechanism so that by default the curve is in pause and, only when the DAO needs to fundraise, the DAO calls resume(amount_to_fundraise) which re-enables the curve until amount_to_fundraise is reached and then switches it back to pause.

How does that sound to you guys? That sounds like a good compromise to me :slight_smile:


This is a nice compromise.

You could even do something where, when restarted, the curve is set below market price and only DXD holders can buy from it until it reaches market price. Kind of like a mini preferential equity raise from aligned stakeholders.

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, it would resume at the current secondary market price .

I think this is a great idea.

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I see what you mean. It makes sense in the traditional equity world (even though not “below” the marketcap :)) but I wonder if that makes sense in a setup like the the dxDAO where DXD is already very liquid. In traditional fundraising, existing investors have preemption rights because the equity of the company is very illiquid so that’s their only way to relute or at least anti-dilute themselves. In a setup like the dxDAO, existing investors can already relute themselves at any time if they want to by buying on a very liquid secondary market. So I am not certain it would be worth implementing such a mechanism.

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curious @thibauld so, if more members here agrees, does that mean you will submit a proposal and to pause the curve? and then in the future submit another proposal to unpause the curve when fundraising is desired again ?

I didn’t fully think out the implications of the idea. It is more focused on a specific scenario where the dxDAO really needs to raise funds and if the price is dropping, reopening the curve may not actually attract as much investment as needed.

Probably not within the scope of what we are currently discussing.

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@CLCL to be clear, I have 0.0 voting power in the dxDAO so all I can do is share information.

If the dxDAO decides to move forward with this proposal, then the pause/resume functionality will need to be formally specified and then implemented/audited so that the dxDAO c-org contract can be upgraded before the dxDAO can get the ability to pause the curve. As the original developers of the initial contract, we’ll likely submit a proposal to add those features to the contract if that the direction that the dxDAO wants to take.

Regarding the proposal I made above (with the pause/resume), I still think that it is not necessary to implement it (for the reasons I explained before) but if investors really want to create more scarcity for DXD, then I’d rather implement it this way than in any other way that was proposed so far :slight_smile:


I’m down for doing this


As a relatively new, but very excited holder of DXD, I just wanted to chip in too and say this seems like the most reasonable suggestion so far on this thread - hearing both sides. The linear curve attracted me as a long term holder as its a very effective fundraise tool for Dxdao - but as an investor I also want to see some of the treasury be put to use before just mindlessly issuing new DXD at low price.

All for doing some more maths on actual bonding curve options as discussed in Monday’s call but in terms of complexity vs benefits it has my vote so far.

Although, can fully understand the continuous arguments too - allowing right to entry at any time.

One is possibly better for growth - the other more philosophically true to manifesto.

Just my 2 cents


Any feedback to the actual proposal comment by Augusto?

Before voting I invite you to read more about the DXD design here (…, which is a Contonious Token Offering contract this mean that besides de common ERC20 methods it offers the buy, sell, pay and burn functions. This functions are intended to be used to help regulate the supply of the token and the buy back reserve.
Instead of halting the curve, which goes against the continuous offering principle we should use the sell or burn methods. The DXDdao has a vesting of DXD of 100k for three years, currently it has like 7k tokens and there is a circulating supply of 35k.
I will create two smart contracts, a burn relayer and a sell relayer, this contracts can be used to burn and sell tokens, where any amount of DXD that we send to the burn or sell relayer it will execute the burn or sell, depending on what we use.
I encourage to explore more on that solutions, finding a solution that will maintain a ealthy inflation rate of DXD allowing the organization to continue receiving funds.
Important thing to note is that the more ETH that is raised by the curve the more funds available to be invested and generate more revenue that will be sent back to the curve, so in the long run pausing the curve makes even less sense, we should focus on raise more ETH and put that ETH to work, IMO.
From the my developer side I can develop and provide solutions to any requirements needed to put the treasury to work and start generating revenue.

i am agree with that

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I will try one last time to explain my point of view.

To begin, we must stop with the argument that the only reason why we want to stop the curve is speculation.
Why is the price of the token important?
Simply because I want to be paid for my future work in DXD and I obviously don’t want it to lose value.
Secondly, if we want to make our funding sustainable we need to make sure that people don’t lose trust in the value of DXD.

Why will the current bounding curve causes a decline in value?
Because an increase in circulation supply necessarily has a negative effect on the price.
Does this mean that we should not increase it?
Of course not, it’s an important source of funding and we need to be able to raise funds.

But the key question is, is the price at which DXD is sold the right price?
No one can know because right now the price is defined by this bounding curve, it can never go above because when the price goes up all previous investors are diluted so the right to future revenue is reduced.
The history of the economy has shown that the most efficient way to put a price on something is to let the market decide.
It is not a free market if the price has a upper limit.
Why can’t we vote, for example, like the Ethereum, have a policy of never raising more money than necessary (minimum necessary issuance policy)?

Then there is another problem with this bounding curve, which is that it can be stopped.
A very profitable attack would be to buy DXD via the bounding curve at a reduced price (compared to the secondary market) and then manage to get enough REP (whether by participating, corrupting or staking if set up) to vote to end the issue of new DXD. This will inevitably have a very strong effect on the price of the DXD and thus allow the attacker to dump it at a profit.

This lack of alignment between the interests of DXD holders and REP holders is at the heart of the problem.
Trust in a system is binary, at the moment investors have trust but we must work to keep it.

For the moment REP is not decentralized at all, so the risk is quite minimal, but before making it more decentralized it is absolutely necessary to choose one of these two options in my opinion:

  • Make the bounding curve immutable so that the rules are defined and cannot be manipulated later.
  • Stop the bounding curve and only raise money when needed again.

Finally, I want to make it clear that for me, with or without the DXD token the project has value (which is worrying), whatever decisions will be made, I would accept them and I just hope we won’t regret it.


Lets try a forum vote before proposing onchain then ?

  • Pause the curve and unpause when the DAO seeks new funding
  • Do not pause the curve
  • Other (comment your opinion)

0 voters

From what I see, the main arguments for pause, from many comments, is best summarized:

  • That the DAO is growing exponentially, and our DAO is currently selling equity too cheaply and harming existing DXD holders through very high inflation rate and thereby diluting their share significantly from the new DXD minted, instead of allowing DXD holders to capture the growth of the DAO.
  • That the DAO will benefit of DXD price appreciation by attracting new talents and attention.
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Because an increase in circulation supply necessarily has a negative effect on the price .

This doesn’t sound right to me. To make things simple, suppose DXD price = discounted expected revenue entitlement. Holding dxDAO revenue expectations constant, more DXD supply means a lower price, as it entitles holders to a smaller fraction of future revenue. However, more capital raised by dxDAO might increase revenue expectations - if revenue expectations increase by more than the DXD supply expands, then increasing DXD supply will increase DXD price.

I have no idea how to predict the effect of dxDAO capital now on future dxDAO revenue. I think it’s probably positive, so the impact of DXD supply on DXD price is less than the “pure dilution” theory, but beyond that I can’t say much. If the future of dxDAO depends a lot on how fast it grows then capital is very important, but if it is likely to end up with the same revenue long term whether it gets there slowly or quickly then capital is not so important.

This is why I think a DXD denominated market to accompany this one could be useful, at least if trading volume picks up somehow.

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Pausing the bonding curve idea seems like a sensible solution for now. It will also allow us to take the time to focus on governance in the near term.

Our team is for this proposal.


The problem with having a vote right now is that there is currently a misalignment of interests between REP holders and DXD holders.
Spoiler alert: If you ask DXD holders, I expect the vast majority of them to vote for pausing the curve. If you ask REP holders, I expect the vast majority of them to vote for continuing the fundraising. I could be wrong of course but I’d be surprised.

I personally liked the proposal that @AugustoL made in today’s governance call where he proposed to set in stone a future date (If I remember correctly he proposed the 1 year anniversary of the fundraising launch) at which they will be a vote on pausing/continuing the curve. In the meantime, work should be done to make sure to properly align the incentives of everyone:

  1. DXD holders should get the right to have some voting power in the dxDAO
  2. REP holders should be clearly incentivized to the success of DXD

Only once this is achieved, then a vote would be relevant. Also, technical work can be done until then to make sure that, if decision is taken to pause the curve, the dxDAO already has a pause/resume function implemented.

As for my personal opinion, I remain convinced that the curve should not be paused. I will not repeat the arguments that I’ve laid down in my previous posts but I’ll add other ones:

  1. Being in a situation to fundraise doesn’t happen everyday, today, the novelty of the dxDAO combined with the bull market creates this massive fundraising opportunity for the dxDAO. I would not take it for granted and continue fundraising as much as possible until investors deem the price of the curve too high, which will happen at some point.

  2. Saying that the dxDAO has raised enough money does not make sense to me. The ambition of the dxDAO is huge and the more it fundraises, the bigger the ambition can be. What has been raised to date is significant but if the dxDAO has the potential to raise 3x that, I think it would be an error not to do it.

  3. Investors’ enthusiam will vanish at some point, no matter what we do. It is a certainty and it is normal: Every single project go through the same hype cycle. After the initial enthusiasm comes the trough of disillusionment. And the supply being fixed or not won’t change that fact. So trying to optimize investor’s happiness in a seller’s market at the expense of fundraising at this stage would be a mistake imho.

Finally, I want to point out that, no matter what DXD investors say, the mathematical fact is that, despite the added dilution, every new DXD that gets issued increases the value of their DXD by pushing the market cap up and by giving more resources to the dxDAO.


the mathematical fact is that, despite the added dilution, every new DXD that gets issued increases the value of their DXD

While yes that is true, a parabolic curve is more meaningful, say dxdao starts generating meaningful revenue in 3 years. Why would a DXD buyer 3 years later, when dxdao is already successful, be able to easily dilute the share of another DXD holder? who contributed capital much earlier when dxdao was significantly more risky and vulnerable while being actively contributing to the community.

Facebook grew exponentially, and a share holder of FB would also benefited from exponential grow, but currently dxdao community is growing exponentially, and the exponential growth is coming in the form of DXD issuance, i am getting benefit on a linear line. How does that make sense? A linear curve almost feel like someone can just steal the success of earlier people who took more risk and contributed more time,

A parabolic curve would also mean that the DAO will raise significantly more capital per DXD issued, that should be more fair.

Also do you hold any DXD ?

That seems reasonable to me. :+1:t2: :+1:t2: :+1:t2:


This would mean waiting another 6+ months before making a vote on pausing or modifying the curve correct?