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.