Initial DXD Distribution

Development of the bonding curve contract and its decentralized application is progressing and it is time to consider plans for the launch of DXdao´s bonding curve funding mechanism.

Let’s first step back and review some things. The bonding curve under development can manage the release of a token which receives a portion of revenues generated by the DXdao, a dividend yielding token. This potential dividend yielding token is being called DXD. When investors deposit collateral (ETH in this case) into the curve, they will receive DXD at a price determined by the curve. DXD will play a significant role in capitalizing the DXdao. REP holders will still manage the DXdao, including the administration of the bonding curve.

The proposal put forth the idea that upon the release of the bonding curve, there would be a premint of DXD to the REP holders of the DXdao:

“DXD Bonding Curve Pre-Mint

DXD will be distributed to REP holders proportionately to REP on bonding curve release.

Exact numbers will be discussed at a later proposal”

Advocates of this idea argue it will help align the incentives of REP holders and DXD holders. Detractors argue that a premint of DXD will discourage investors. This thread is an opportunity for the dxDAO comcmunity to discuss the merits or the disadvantages of a DXD premint as well as the potential parameters of a premint ahead of a formal proposal to the DXdao.

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Great progress John, dOrg and others.

As discussed in past, I am FOR giving DXD to Reputation holders. I believe the stakeholders with a governing interest & right, ought to have an economic interest & right in it as well. It is the surest (maybe only) way to align incentives. Rep and DXD holders should both optimize for usage & utility of the software protocols dxDAO owns (DutchX, etc.), via effective ownership / operation.

We spoke about all sorts of imperfect but useful analogues:

  • startup founders needing skin in the game + chance at a positive economic outcome to put in the time to make something work.
  • board of directors steering a company, getting compensated in shares.
  • MKR holders stewarding the protocol in an effective & predictable way, rewarded in kind

I don’t see a reason to split the governing & economic rights here. Imagine new, non-Rep-holding investors investing in DXD in the first place - I don’t see it. It means they must entrust the dxDAO (and the value of their DXD) to some group of people who do not stand to gain/lose if they govern well/poorly. I may very well be missing something here.

As for amount - as discussed in chat, I believe the initial amount is arbitrary, right? What matters more is the curve parameters? If so, I am fine with Corkus’ 100,000 DXD suggestion.

Curious to hear opinions after call tomorrow. Thanks.

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This is a great point. I don´t think potential buyers of the DXD token feel more safe if the operating body (dxdao) has no skin in the game by not holding any DXD tokens. It could even be an argument against investing as it is not clear that the dxdao will commit to DXD. With the distribution of tokens, we align members, the organisation and potential DXD investors because all have plans/goals for the future of DXD token and the dxdao.

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I guess it is worth considering having the pre-minted tokens for Reputations holder locked/vested over some time.

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