I'd like to have an in-depth discussion of GEN locking and GEN auctions

I’ve seen several comments in other threads about GEN locking. I’ve seen a few about how to raise money, the DAO plans on auctioning GEN (for locking?) I’ve even seen some talk of a “locked token” derivative… or something.

Can we please have a discussion or use this thread to link to other discussions of this topic?

  1. What is this all about?
  2. What is the concept behind locking, has it been done before, what happened?
  3. When would this start, e.g. what is the locking and or auction roadmap?
  4. What discussions have already covered this ad nauseum?
  5. Who is currently designing the locking and or auction mechanics?
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…and maybe I am the only one who cares about this topic enough to try and contribute here?

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Hi just saw this Ivan. Will circle back tomorrow to participate! It’s very important, thanks for starting the thread :grinning:

I think the issue isn’t that people don’t want to talk about it, there were just a few other threads covering similar topic! But it looks like @Kate is on it.

Indeed there were. At least the ones that I saw were extremely light on details, a la “hey we are gonna lock GEN!” or “auctioning and locking GEN will make it worth more.” To which I say “hmmmm?” and now, we have this thread that I hope will collect or point to the prior conversations and fill in the (afaik) gaping holes in the systemic application of a nontrivial change for GenDAO.

Hi Ivan,

Nice to meet you.
There have been multiple conversations for about 8 months on the scheme for locking GEN for REP and more threads are forthcoming.

  1. What is this all about?

This is an experiment aimed to continue the progression and governance of the Genesis DAO. So far we’ve had one main group who have held reputation - people who gain rep by working and contributing. We want to give other stakeholders some ability to participate in governance - namely GEN holders. By adding the GEN locking scheme we expect to see continued good governance in line with the purpose of Genesis

The purpose of the Genesis DAO is to build the foundations for a world where people can freely collaborate and organize.

Together we pursue this purpose by expanding the GEN ecosystem. [still in draft]

We expect GEN holders to be good at pursuing this purpose via their governance decisions as they are already staked in said GEN ecosystem.

There will be a Task Force forming to address some questions about limiting a take over of the DAO by signficant GEN holders who lock for REP. Those who contribute value via work will continue to get REP and are also invited to receive GEN in their reimbursement.

@eric.arsenault is starting a thread to get input and have a discussion of the proposed rep dilution 6.5/7% of Genesis total rep at day 0 of the GEN locking scheme and rep auctions.

This is all part of a move to what is called Genesis 1.0 - an evolution from Genesis Alpha which also includes

  • 3M locked GEN being given to Genesis to govern (post to dicuss this forthcoming),
  • various upgrades in the product,
  • an Alliance (or group of most staked members to steward the DAO)
  • the potential for more funds from other players/orgs
  • and hopefully better budget management according to the agreed upon priorities for the DAO.
  1. What is the concept behind locking, has it been done before, what happened?
    Ezra explained the mechanics of locked GEN in his post. What are you asking when you ask about the concept?

With DAOstack dxDAO used this idea and NecDAO (DiversiFi) are about to start. It is experimental and there’s not much history of it happening before in the crypto space. One example is the Switcheo lock which was a test over the course of a year

  1. When would this start, e.g. what is the locking and or auction roadmap?

The backend of the scheme from the NecDAO is being simplified slightly and the front end is being updated by DOrg. This will be ready by 15th Dec, we will submit it as a scheme to Genesis and then it takes 2 Days till boosted and then 8 Days until it passes. From then we can start the GEN locking for REP - this will probably happen after the holidays around 10 January.

  1. What discussions have already covered this ad nauseum?

Reputation Adjustment
GEN Locking Mechanics Primer
Numerous calls - here’s the video from the one last night featuring a demo of the scheme and discussion

  1. Who is currently designing the locking and or auction mechanics?#

Matan Field the CEO of DAOstack and Adam Levi the CTO with input from the team and community

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@Kate
Thanks for the lengthy reply. I’ll take a look at the video.

Ezra’s post described the mechanics (i.e. HOW), which is a lot different from the concept (i.e. WHY). Even so, his “how” was very light on details - how much, how often, how do you measure if it is working/not working… The “why” I am seeing is a bit of a stretch: “we auction GEN to be locked in order to give people REP when they lock it because people who own GEN will be invested to help.”

This ^^^ makes sense to me theoretically. How many people have lined up to purchase GEN in the first auction? How competitive do you anticipate the auction will be? How much GEN do you plan on auctioning in the first auction, subsequent auctions, and how often will auctions happen?

Auctioning GEN to give REP means there will be scheduled REP dilutions that may adversely affect those who don’t participate in the auctions. Imagine proposing a job that would give you 1% REP but knowing your 1% REP will only be worth .5% REP by the time the job is done due to X auctions happening in-between, so you logically inflate it to 2% REP, and everyone votes your proposal down for being greedy when you were being rational. Alternately, GEN auctions are worth so little REP that nobody wants to participate in them. It’s a non-trivial problem that may have unexpected (game-theoretical) consequences. This is why I ask for real, solid, specific answers in the threads.

As far as the concept goes (e.g. the “why are we doing this and what are the ramifications”) -

I’m still not solid on the exact “why” - is this a way to fix something broken (e.g. people with REP right now are not doing a good job, so let’s juice that somehow)? Is it a way to simply raise money (GEN auction = $$) and if so how much GEN does the DAO own and how much will they auction and how quickly (asked before, I know). I’d love to see a pros/cons breakout of doing these auctions. Does locking GEN and then unlocking it, en-masse, at a specific moment in time threaten a liquidity flood that kills the value of GEN?

Say GEN is, value-wise, not doing so well relative to other investments. 1yr after the first auction, 5M GEN are suddenly unlocked for 10 separate people who bought it and some of those lockers run for the hills to dump or slow-drip GEN to flip it for a better investment. This liquidity flood would either massively drop or suppress the value of GEN. Is this type of scenario being discussed?

Are there alternatives to auctioning GEN to be locked for REP that achieve the same outcome, but this method was deemed the best/safest/superior one?