Governance 2.0 Working Group Midway Check-in

A signal proposal to establish the Governance 2.0 Working Group was passed by REP holders last month. The aim was to create a dedicated group to research long-term solutions to ensure long-term alignment between REP and DXD holders. We’ve had two calls so far with 15+ participants on each call, with several DXdao full-time, alongside participants from DAOstack, Delphi Digital, REP holders, 1kx Capital, API3 DAO and RadicalxChange.

I wanted to provide a brief status update as we approach the half-way point of the group, as outlined in the scope.

How we got here:

The varied background of the group provided great context on the history and evolution of DXdao, from ideation to REP distribution to the launch of DXD. DXdao has governed sustainably for 18 months, but the current state was not the result of a pre though-out plan.

On the contrary, REP and DXD were launched almost independently, without an explicit plan to reconcile them. The DXD pre-mint in the treasury was a way of aligning interests in the short-term, but DXdao always needed a way to harmonize REP and DXD.

The working group narrowed the problem down to:

  • DXD is not sustainably intertwined into DXdao long-term
  • REP holders have no incentive for good governance

Some solutions floated:

  • New voting equation that requires DXD
  • REP Distribution expansion to DXD
  • DXD staking in holographic consensus

Check out the full notes from call #1 on the Notion board.

Solution Requirements and Primitives to Preserve

With rough consensus on the underlying problems, discussion shifted towards agreeing on the base foundation for a solution, ie what needs to be in any final solution. Any function should meet these criteria.

The group is currently working from a Solution Requirements doc in Notion and are nearing towards consensus on its components. At the moment, the necessary conditions are:


  • REP is earned. Reputation is the on-chain representation of contributions to DXdao
  • DXD is the liquid financial value in DXdao
  • Holding DXD does not necessitate governance participation
  • Scalability and decentralization


  • Holographic consensus: up/down staking on proposals to manage the docket and quorum
  • DXD is a necessary condition for DXdao governance actions
  • REP holders need incentives to govern effectively
  • Governance decisions should account for the future state of DXdao
  • Protection against an economic attack
  • Fractalization ability


  • Reputation should remain non-transferrable and not decay; a multiplier or constant may be applied for a new governance denominator, “voting power”
  • DXD on-chain guarantee for DXdao financial claim
  • Flash loan resistance
  • Limits on accumulating voting power in one address
  • Reasonable cost to operate decentralized governance

The group has also distinguished between “Voting Mechanics” (holographic consensus) and “Voting Power”, which should be a function between.

The next call will be on Tuesday December 1 at 17:30 UTC. We will begin to write out a solution that meets the criteria laid out in the Solution Requirements doc. Feedback on that doc is strongly encouraged (can reply on this thread).

Let me know if you have any questions or would like to be invited to the next call.


The best, simplest, and most effective solution to this problem is to create a Senate whose members are REP holders, they should strive to add value to DXD as a mark of DXDAO profitability, so it is natural for DXD holders to be involved in their choice. Like citizens, they choose their representatives from among volunteer experts.
The details are not so important, the most important part is to let the DXD holders elect their governments democratically.
For example, at the end of a season, all or part of REPs can be distributed among candidates in a free election.

Hi all,
My two cents on the topic.

REP holders - core community and there shouldn’t be any form of elite group amoung them (at least other than informal and unofficial, subjective perception of individual efforts).

REP seekers issue. Obtaining REP by working for DXdao or participation in governance requires certain skills/time and deemed as not always achievable by some community members.

Therefore, it seems right to introduce some incentive to DXD token holders to do something usefull with DXD circulating supply (i.e locking) resulting in increasment of their chances to obtain REP (but shouldn’t guarantee it probably). For instance, locking DXD for some period + some extended governance work, such as voting in daotalk will result in obtaining some REP.

I agree with the sentiment of locking as a mechanism to receive REP, but it may be a touch more difficult than that.

Awarding REP for locked tokens would presumably be in proportion to the quantity locked - which would be in direct contrast to “buying governance” as I currently understand. If we were to instead award it equally on a per wallet basis, we would need to ensure someone wouldn’t be able to slip through with multiple wallets. (Creating the same issue as before).

Just some quick thoughts, hoping to chime in on this a bit more in the future.

Great notes Chris, the requirements are short and clear and I like how they were divided from social -> structural -> technical.

In social: * Holding DXD does not necessitate governance participation
in Structural: * DXD is a necessary condition for DXdao governance actions

As I understand this affects the level of participation of the user? is a common DXD holder a social member and a dxdao worker who holds DXD an structural member?

I think the solution would be implemented in the technical -> structural -> social direction, once we design a solution to meet the technical requirements we would have to think how to implement them into our governance structure and then at last share and communicate the new voting system in dxdao community.

Hi all,

Just finished the third call of the Gov 2.0 working group. You can see the meeting notes here.
We also recorded the meeting, so you can check out the discussion here:

We are inching to finalizing the Solution Requirements. Please provide any feedback here or directly on the Notion board.

Next meeting, we will begin discussing solutions to the Voting Power Equation. If you have any suggestions, please DM me or reply below!