[Feedback & Discussion] bZx Governance Token allocation to DXdao

bZx has approached the DXdao about participating in community governance of their soon-to-launch DAO with a potential $10k allocation of bZx tokens given to DXdao.

Background:

Providing governance to other DeFi protocols is a core product and focus of the DXdao, but the expertise and technical capability to provide this service is currently lacking.

Effective governance would require:

  • Understanding of the bZx governance system by DXdao community members to determine how the DXdao should vote
  • Given that bZx is building a custom DAO, interacting with it would require dev work to configure to the new schema, and potentially an audit.

This brings up a couple questions and points for the DXdao:

  • Are there any ‘requirements’ for the DXdao to provide effective governance?
  • How is the work of governance (both technical development and issue research) paid for?
1 Like

The DXdao is 400+ addresses of REP holders, and at least a couple dozen consistently active members, so I think if the DXdao is brought into a governance system, we should have a whole number % of power. Usually this manifests in a token that we agree not to liquidate for a period of time. (From this point on, I’m thinking out loud). After this period (6-12 months), however, perhaps we should consider liquidating some of this governance token, let’s say up to 5% into ETH, and leave it up to the company to re-up to the initial amount of governance tokens, should they wish we maintain the same amount of governing power. Or perhaps the company can creatively negotiate other forms of compensation that benefit our products (i.e. incentive programs on dxSwap liquidity pools like synthetix/ren on curve).

And beyond that, it’s also important to recognize the non-zero resource requirement to actively participate in governance. Building out the technical functionality for DXdao to actually vote in the governance of other DAOs requires man hours to create some voting portal for DXD/REP holders to signal their votes, and some delegate/bridge system to communicate that consensus to the other DAO. Hopefully this can act as a set-and-forget solution once its built out, but may inevitably need upkeeping to reflect updates/forks the other DAOs deploy. With just one or two DAOs that DXdao participates in, probably not a huge burden overall- but if more and more DAOs follow suit, costs can add up real fast.

Having 1% or more in these various DAOs looking for our help with governance seems like a good baseline to reflect the costs for DXdao to actively and faithfully provide good governance participation.

also just loud thinking:
so for easier communication, I think we can split the questions/tasks concerning the “governemt as a service” path into three main discussion threads:

  1. dxdao-compensation of offering governance and practises (I like the idea with locking the provided governance tokens for a certain time with a certain % of possible liquidation after, this could be individually set for each "governance contract")
  2. building the necessary uniform infrastructure to effectively govern (thinking: 1. information/summary/knowledge/discussion about the “governance client” to allow dxdao members to quickly get an overview of the “governance client” and its product/problems, 2. actual voting system)
  3. compensation of dxdao-members (infrastructure building probably can be done like general worker compensation so far; compensation for e.g. collecting information, writing summaries/analysis and taking part in the discussions? not sure how to compensate, will this be from the general funds, or should there be an individual amount of funds setup for each governance-client-contract which then gets distributed?)

Note that PieDao was also asked and they are in as far as I understand:

Correct me if I’m wrong, but that’s not really a major work item, is it? Each of the DAOs in which the DxDAO will participate would support a smart contract interface, so it’s not really a matter of setting up a delegate system, so much as it is drawing a proposal on Alchemy to call the corresponding “vote” function with the right parameters. There may be restrictions to be figured out, in terms of boosting or minimum participation or the like, but overall it’s not entirely new infrastructure. (Of course, if we’re talking about DAOs that run outside of Ethereum, then things get a bit hairy, but we should leave that until it comes.)

2 Likes