DXdao, DXtrust and DXD

DXdao Continuous Organization

The 0.2.0 release of the Bonding Curve Decentralized Application that the DXdao commissioned includes all the necessary tools for the DXdao to jump to the next level, to a decentralized and continuous organization.

A Continuous Organization refers to any organization that sets up a Continuous Token Offering to give to every stakeholder the ability to invest in the organization at any time.

The Continuous Token Offering happens in a DecentralizedAutonomousTrust smart contract, which is based on the Continuous Organization Whitepaper published by Thibauld Favre.

A Continuous Token Offering (CTO) is a novel way for organizations to receive financing without releasing any equity or any governance rights. A CTO uses an organization’s realized revenues (i.e. revenues for which a payment has been made) as collateral to back fully digital assets that anyone can buy or sell to speculate on the organization’s future revenues.

The v0.2.0 BC-Dapp is composed of:

  • Client Based Application for browsers to interact with the Decentralized Autonomous Trust contracts, execute buy and sells and follow the token price of the token issued.
  • Smart Contracts with scripts and upgradeability features.
  • Scripts used for development, testing and deployment of the dapp and smart contracts.
  • Documentation about the app and the Continuous Organization model used.

DXdao, DXtrust and DXD

The DXdao will set up the DXtrust to issue DXD tokens through a Continuous Token Offering and will split all of its revenues between the DXtrust and itself.

The DXtrust facilitates the DXD holder’s claim on the present and future cash flows of the DXdao and allows investors to speculate on the revenue growth of the DXdao.

The DXtrust is created with 100.000 pre-minted DXDs for the DXdao. The tokens are held in a three year vesting contract with no cliff. As the tokens vest the DXdao can burn them or distribute them freely to stakeholders.

The organization, its investors and its customers interact with the DXtrust by sending ETH or DXDs to it:

Source of cash-flow What happens at the DXTrust?

Investment (buy)

▪ The DXtrust receives ETH from the buying investor
▪ The DXtrust mints new DXDs and send them to the buying investor.
▪ The sum invested is in part distributed to the beneficiary organization and in part saved in the DXTrust cash reserve according to a pre-defined immutable function I (for investment).

DXD purchase (buy)

▪ the DXtrust receives ETH **from the beneficiary organization**
▪ the DXtrust uses the funds to mint new DXDs and sends them back to the beneficiary organization.
▪ The funds used to mint the DXDs are entirely funneled in the DAT cash reserve.

DXD burn (burn)

▪ The DXtrust receives DXDs
▪ The DXtrust destroys the received DXDs
▪ The lowest value of the burnt DXDs is being reaffected equally to all COTs holders via the `sell()` function.

Investment (sell)

▪ The DXtrust receives DXD from the selling investor
▪ The DXtrust burns the received DXDs and sends ETH back to the selling investor according to a function S (for sell). S has a slope s that increases discretely over time, every time the DAT receives a payment.
▪ The ETH sent back to the investor is taken from the DAT cash reserve and does not affect the organization's treasury.

Revenues (pay)

▪ The DXtrust receives a payment from a customer.
▪ The DXtrust transfers the revenues to the organization but retains a fraction D (for distribution) of the revenues that are funneled to the cash reserve, issuing new DXDs.
▪ The organization (or optionally the customer) receives the newly minted COTs.

Whats Next

The DXdao approved DXtrust deployment parameters and configuration. We (the developers involved in the BC-Dapp) wrote a script that can be executed over the main ethereum network to deploy the DXtrust contract with the approved configuration and transfer its full ownership and control to the DXdao smart contract. The DXtrust has to be an proxy owned by the DXdao that uses to the right version of the DecentralizedAutonomousTrust implementation.

Once the DXtrust proxy contract is deployed, the DXdao can point the dxdao.eth ethereum record to the DXtrust proxy address and the dxdao.eth content record to the BC-Dapp v0.2.0 deployed for the DXtrust proxy over mainnet.

So, finally after the dxdao.eth resolvers are set, the DXtrust contract and its BC-Dapp will be owned by the DXdao, and the first truly decentralized continuous financial organization will have come to life.