dxDAO Frequently Asked Questions (FAQ)

#1

What is the dxDAO?
The dxDAO is a next-generation decentralized autonomous organization (DAO) for community governance of software protocols.

The idea for the dxDAO initially arose from Gnosis’ design and development of a permissionless trading protocol, the DutchX. The DutchX employs the Dutch auction mechanism, enabling the exchange of ERC20 tokens with fairer, uniform clearing prices. The DutchX proved its viability as critical infrastructure for decentralized finance (DeFi) applications, providing an on-chain price oracle and facilitating large volume trades without slippage. To support community governance, upgradeability, and the network effects necessary for the DutchX, it became clear a governance mechanism such as the dxDAO would be essential.

The dxDAO is built on DAOstack’s framework for organizations. Their governance framework enables groups to make a high quantity of decisions without giving a potential malicious subgroup the ability to sway those decisions against the best interests of the overall group, balancing efficiency with resilience for highly scalable organizations.

Where can I learn more about the dxDAO?
The dxDAO will be initialized on May 29, 2019, with a period to stake for your vote and earn voting power at dxdao.daostack.io.

Whitepaper: https://github.com/gnosis/dx-daostack/blob/master/dxdao-whitepaper-v1.pdf
Telegram group: https://t.me/dxdao
Forum: https://daotalk.org
Twitter: #dxDAO

What is the long-term mission of the dxDAO?
The degree of decentralization in any system encompasses not only its technical architecture, but extends to system governance itself. Today, there is a clear need for decentralized governance of decentralized software protocols. Responding to this need, the dxDAO is a next-generation decentralized autonomous organization (DAO) for community governance of software protocols, not only the DutchX trading protocol.

The dxDAO is a novel, yet humble experiment toward the ends of human coordination. We hope that it is one of many such experiments, toward the aim of cooperatively facing common crises of stewardship on a more global level.

What will the dxDAO govern?
The idea for the dxDAO initially arose from Gnosis’ design and development of a permissionless trading protocol, the DutchX, which has proved its viability as critical infrastructure for decentralized finance (DeFi) applications, providing an on-chain price oracle and facilitating large volume trades without slippage. To support community governance, upgradeability, and the network effects necessary for the DutchX, it became clear a governance mechanism such as the dxDAO would be essential.

Governance of the DutchX, however, is a start point not an endpoint. The dxDAO may choose to fill a crucial gap in web 3.0 governance. Its lifelong trajectory will ultimately be decided by what community stakeholders deem to be the most valuable pursuits.

What are the benefits of becoming a dxDAO Stakeholder?
During the dxDAO governance phase, Reputation Holders are collective stakeholders of the DutchX trading protocol and can actively shape its parameters. With governance of the DutchX being a startpoint not an endpoint, dxDAO Stakeholders may govern other software protocols. Broadly speaking, when the direction and parameterization of a protocol are collectively governed, stakeholders become more confident that future versions of a protocol will align with their interests.

How do I become a dxDAO stakeholder?
There will be a 30-day initialization process, called the Vote Staking Period, during which participants can earn Reputation (voting power) in the dxDAO at dxdao.daostack.io. Anyone can earn Reputation in four categories through mechanisms designed to achieve a large degree of decentralization amongst dxDAO Stakeholders. Participants in the Vote Staking Period will be competing against each other to earn Reputation.

The more Reputation held, the greater one’s voting power in the dxDAO governance phase.

What is Reputation (voting power), and how do I vote?
The dxDAO is built on DAOstack, and Reputation is the intrinsic DAOstack voting power signifier. Reputation is not a standard token: it is non-transferable across wallets, i.e. it attaches to one specific wallet address, and confers voting power to its holders in a specific DAO. The more Reputation held, the greater one’s voting power. The voting power of each Reputation Holder is weighted by this amount in proportion to the overall amount of Reputation (1 million at the start of the dxDAO).

After the Vote Staking Period, the dxDAO governance phase begins. In the open-ended governance phase, the dxDAO has full autonomy—over its processes and the assets it controls. The dxDAO will use the DAOstack’s Genesis Protocol for decision making.

Anyone can submit a proposal, GEN token holders can predict a proposal’s success, but only Reputation Holders can vote on a proposal. To learn more, see the blog post A brief discussion of the protocol governing the dxDAO.

How is Reputation (voting power) distributed?

Initially, there will be 1 million Reputation (voting power) available. It will be allocated during the Vote Staking Period as follows:

  • 8% (80k) of the initial Reputation will be distributed to those who lock ETH.
  • 30% (300k) of the initial Reputation will be distributed to those who lock tokens whitelisted on the DutchX.
  • 50% (500k) of the initial Reputation will be distributed to those who register Magnola (MGN).
  • 10% (100k) of the initial Reputation will be distributed to those who bid GEN tokens in any one, more or all of 10 consecutive auctions, each lasting approximately 3 days and running throughout the course of the Vote Staking Period.

  • 2% of the initial Reputation will not be distributed via the Vote Staking Period. The dxDAO will collectively decide on how to distribute the unallocated 2% of initial Reputation during the Governance Phase.

To learn more about the methods of staking for Reputation, see the dxDAO: Toward super-scalable organizations whitepaper.

What is the thinking behind the initial Reputation (voting power) distribution?
Anyone can earn voting power by participating in any or all four categories to stake for your vote, through mechanisms designed to achieve a large degree of decentralization amongst dxDAO Stakeholders. After the Vote Staking Period, the actual governance phase begins. In the open ended governance phase, the dxDAO has full autonomy—over its processes and the assets it controls.

Gnosis Ltd (“Gnosis”) is involved in the development of the dxDAO but will fully step back before the launch of the dxDAO. In this vein, there will be no pre-allocation of voting power in the dxDAO. Instead, participation is open to everyone. The dxDAO will either develop its own life and identity independently—or perish.

What is Magnolia (MGN)?
Magnolia (MGN) tokens are intrinsic to the DutchX trading protocol, and used to lower market participants’ Liquidity Contributions on the DutchX. Liquidity Contributions do not go to an operator or owner, rather they are reinvested in the next auction of the token pairing to contribute liquidity, benefitting all traders who participate in the following auction. Instead of fees, the DutchX trading protocol levies Liquidity Contributions of ≤0.5% of a participant’s total trading volume.

Participants holding MGN tokens pay lower Liquidity Contributions, based on the percentage of the total volume of locked MGN tokens they hold. Further details on the Liquidity Contribution reduction model are available here.

Which tokens are whitelisted?
The procured whitelist includes a list of projects we are familiar with and consider legitimate. In that respect the list is random. A legal assessment was conducted on the initial list based on the tokens’ characteristics. The legal assessment looked at legislation of major jurisdictions to ensure that, to the best of our knowledge, the Whitelisted Tokens are not securities, financial instruments or equivalent and that customer due diligence procedures do not apply to them at this moment in time for the purposes of the DutchX. Tokens were weeded out based thereon. The pre-final token list was then compared with the tokens reviewed by a compliance exercise carried out by the Brooklyn Project (theBKP.com) and Truset (https://tokens-beta.truset.com/home) and confirmed based thereon.

More information on the DutchX token whitelist is available in the documentation here.

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#2

Are there any more details on the initial distribution?

#3

Distribution mechanics are outlined here: https://dxdao.daostack.io/

The UI for the vote staking period will be released just prior to the start of the period.

#4

Is there a specific info you are looking for?
Here by the way is a excel sheet that plays around with some numbers and tries to value the different options to participate:

#5

Excited to try the UI when it’s live.

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#6

Hey @ricburton

I don’t have the staking UI to share with you but here are some mocks of Alchemy Earth:

https://projects.invisionapp.com/share/73PY99PKN9D#/screens

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