Joint AMA: Martin Köppelmann & Matan Field, 4/12/2018 at 3pm CET


#1

Hey everyone!

To kick off the imminent launch of the dxDAO, we’ll be hosting a joint AMA with Martin Köppelmann (Gnosis founder) & Matan Field (DAOstack Architect) on Tuesday, December 4th at 3pm CET/9am EST.

Post your questions below and let’s make this a stimulating discussion for everyone!


#2

looking forward to the AMA!


#3

I have a few questions:

  1. How could we use Gnosis’ upcoming prediction markets (futarchy) with DAOs? Beyond a DAO controlling a dApp, are there are other use cases?

  2. What measures are being taken to attract liquidity providers to the DutchX?

  3. Are any global constraints being implemented in the dxDAO to prevent a reputation (REP) oligarchy, such as a REP ceiling for an address?

  4. What crazy ideas or proposals do either of you already brainstormed for the dxDAO upon launch?


#4

Hey guys,

  1. Can a token pair be token-token as opposed to eth-token or weth-token?

  2. Can existing DEX easily migrateto DxDAO?

  3. Will DxDAO support ERC-721 and/or wrapped BTC?

  4. How does the dxDAO enables trading in low liquidity environments?


#5

Hey guys!

An emerging SEC approach to determine decentralized exchange in the EtherDelta case leaves much to be desired. Who excersises control over exchange`s operations - that was the question: (1) who wrote and deployed a smart contract code? (2) who has an access key to alter a smart contract? (3) who charges the fees?

Accordingly, my questions are:

  1. Could it be sad that in the DutchX case the various functions of bringing together multiple buyers and sellers are provided by distinct, unaffiliated third parties?

  2. Who excersises control over exchange`s operations?

Thanks in advance!


#6
  1. How would a DAO handle administration of off chain permissioned assets like DNS?

  2. Does a DAO legally resemble a co-op, a club/Verein, a non-profit, a corporation, a limited liability partnership? Could a DAO be combined with those legal entities?

  3. What sort of abilities does a DAO have that aren’t typically thought of (like beyond voting to spend money or manage membership)?


#7

Howdy all,

  1. You’ve claimed that “The dxDAO aims to facilitate open trade of anything of value.” Does this mean non-crypto assets may be traded in the future?

  2. Could you explain more about the Dutch auction mechanism, and why it is beneficial?

  3. Will DAOstack’s association with another project, in this case, DutchX make it harder to one day become completely decentralized?

  4. How does the team hope dxDAO will improve DAOstack overall?

Looking forward to your answers!


#8

what type of organizations do you think are most likely to try a DAO first?

what are the areas where DAOs and existing legal entities (e.g. nation states, municipalities) are most likely to complement and conflict with each other?


#9

I have a few questions:

  1. How could we use Gnosis’ upcoming prediction markets (futarchy) with DAOs? Beyond a DAO controlling a dApp, are there are other use cases?

There are many ways how DAOStack and Gnosis can integrate more and both teams are actively looking into them.
a) one quite obvious one is to use Gnosis markets for the staking game in holographic consensus. Currently the staking game uses something called “pooled betting” or “Parimutuel Betting”. There are some game-theoretic advantages to use prediction markets (probably with a LMSR market maker) instead
b) Futarchy is a bit a different governance model. In DAOStack so far voters vote on CONCRETE PROPOSALS. In Futarchy voters instead would just vote on abstract success criterias. In case of a DAO governing an exchange this criteria could be the future volume of that exchange or the total amount of fees payed. After that vote all decisions are made by markets. Basically you have a constant market forecasting that success metric in the future. If someone want’s to make a new “proposal” so called conditional markets will be created. They measure the influence that this proposal will have on the success metric.

Of course DAOStack could integrate this as an additional tool. Also combinations are possible. One could be that by default (for further scalibility) decisions are made by the Futarchy and holographic consensus is only used to veto decisions by the futarchy. Or the Futarchy could be an “augmentation”. Decisions are made by vote but to help voters make a decision Futarchy markets are offered.


#10

A bunch. Liquidity is really the key feature.
There are 2 build in ways to incentivice liquidity on in the dutchX protocol.

a) “the liquidity contribution”
A fraction of every trade (between 0.1% and 0.5%) are used to incentivice ongoing liquidity. That means that this fraction is put into the NEXT auction as “free money” to join that auction and keep the system going. Since (unless the first auction) you always receive something from the previous auction it evens out if volume stays the same (everyone pays into the next auction; everyone gets something from the previous auction) However - if volume/liquidity is going down a specific auction will receive more from the previous than it will pay to the next.

b) “Magnolia”
Every trade will create MGN. Holding a lot MGN will give you a slight trading advantage since if you have more you have to pay less into the “liquidity contribution” pool (but you still receive from it)

c) The dxDAO
During that one month period the rep distribution in the dxDAO will create an additional incentive to trade on the dutchX protocol.


#11

Hey Pat,

  1. I’m sure Martin has some more answers, but there are at least 2 ways (that we’re already familiar with) that DAOs could use PM:

a) Futarchy governance mechanism - for an intro see: https://blog.ethereum.org/2014/08/21/introduction-futarchy/

b) we can use prediction market (such as Gnosis) rather than prediction game (such as the one used right now in Alchemy) for Holographic Consensus, used for DAO governance. We’re actually looking at this possibility right now and analyzing the differences, pros and cons.

  1. –> Martin (but a simple answer is buried in the Magnolia and fee-reduction structures, which essentially designed to attract exactly those liquidity providers).

  2. There are no global constraints implemented for dxDAO at the starting point, but the DAO itself could be adding them. Re REP oligarchy, it’s not possible to have such constraint effectively, unless you’re also demanding for identity verification — one can easily open 1000 addresses and manage them by a single person without anyone knowing that. It’s interesting to think of other measures against reputation oligarchy.

  3. Well, it’s a surprise… :slight_smile: But really, a few examples could be:

a) The DAO deciding to change the trading fee structure and take a cut to itself, and then manage that fund for further (decentralized) development of the platform, spend on legal work or marketing.

b) The DAO decides to “tweet” (actually, “peep” http://www.peepeth.io/) and generate the first decentralized marketing/messaging organization in order to attract more users and traders.

c) The DAO can decide to make business offers to other DEXs, essentially looking for decentralized M&As :slight_smile:

I’m sure there are many others… I may come back to this post later. Great stuff!


#12

Hey Jeremy!

Meaningful factors for good early adapters of DAOs would be:

  1. those which understand well the technology, the need and the potential for decentralization
  2. those which have an audience that naturally understand the same as well
  3. those which have an audience to which blockchain UI (such as metamask) is not too high barrier for entry
  4. those who have strong need for a wide (and thus decentralized) community building, whether it is for the sake of PR, user engagement, legitimacy, scale of operation, crowd intelligence or legal un-liability.

Good DAO early-adapting candidates would be:

  1. Leading blockchain projects with large funds to be (perhaps partially) crowd managed (“top-down”). Gnosis, Status and the ETF are good examples.
  2. More community driven, “bottom-up” blockchain projects. GoodDollar (and to some degree Genesis) is an example.
  3. From legacy world: domains that have large number of interoperating players/companies which need to be constantly coordinated, but are afraid to put all of this coordination on a centralized body (and server). There are a few such ones, including shipment, supply chain and Telecom industries.
  4. Organizations which communality and wide consensus is important. Perhaps organizations in the UN, and other global non-profits are examples.
  5. Organizations that want to do good, but which sit on an yet un-defined territory legal wise (due to the slow pace of regulators) and may better/safer operate as DAOs. DEXs are a good example.

#13

It is a key success metric that there will be a very broad distribution of REP. For the dutchX to become a infrastructure component in the Ethereum ecosystem (as a reliable price feed for tokens/ and as a mechanism for contracts to convert token A to token B) it is an absolute requirement that no single entity/company can make unilaterally upgrades to the protocol. Similar as Ethereum is a neural platform specifically because there is no small single group that can unilaterally make changes.

A cap per address is not really useful because it is super easy for a (potentially malicious) actor to use many addresses. The only way to achieve that level of decentralization is to make it as easy as possible for a large group of people to participate. The different ways to aquire REP should exactly do that. It will be as easy as just lock down some ETH with one transaction to participate. I think a goal should be at least 1000 participant in the DAO to achieve the required level of decentralization.


#14

Hey Gareth!

  1. I leave this to Martin :slight_smile:

  2. Yes, quite easily. Your DEX has some functions, and generally those functions have an owner (some address that controls them), and usually that ownership is transferrable, then you can simply send that ownership to the DAO (in this case dxDAO) Avatar contract, and that’s it! the DAO now fully controls those functions, and if they are the entire set of functions, the entire DEX. In the UI release targeted for the dxDAO launch you’d also be able to easily config the interface for that DAO to be managing those functions.

  3. Right now it doesn’t, but it can easily do so in the future, and likely will. The DAO can decide to put this as a priority :slight_smile:

  4. Well, it’s the DutchX (not the DAO) that enables trading in low-liquidity environment. I leave this to Martin to reply, but in summary I can say that this is exactly what DutchX does best — providing (sort of) guaranteed liquidity for non-liquid tokens. And it does so by introducing batch auctions rather than an order book. But Martin will probably expand on that.

Thanks


#15

Sure - the dutchX protocol allows any token/token pair.

  1. Can existing DEX easily migrate to DxDAO?

They could. Is is important to make a separation. The DutchX protocol can work fully without a DAO. But in that case there is no way to upgrade it. You could set it up that one entity (e.g. the developer) can upgrade it, but then you loose most of the security guarantees. So yes, if other exchanges/DAPPs want to find an entity that can handle upgrades responsibly they could check if the dxDAO is a fit for them.

  1. Will DxDAO support ERC-721 and/or wrapped BTC?

The DutchX protocol at this point only supports ERC20 (that includes wrapped BTC). However - the DxDAO could propose/implement an upgrade to support ERC-721

  1. How does the dxDAO enables trading in low liquidity environments?

The dutchX protocol is specifically designed to find a fair price even at low liquidity. This comes at the cost that it will only find a new price/enable the next trade every 6 hours.


#16

Thanks Dmitry!

While this is not a legal advise and you should consult with a lawyer for that,

  1. technically in the DAO (and specifically the dxDAO) the reputation holders would be those who will have control over the exchange’s operations. This could be hundreds, thousands, or in principle millions of agents. That’s the beauty of DAOs, and that’s the beauty of the DAOstack platform and its holographic consensus, that enables such scales of cooperation to actually take place.

  2. In a ways yes, including the miners that run the node of the blockchain, the reputation holders who vote for decisions that enable that, perhaps in the future nodes who’d be running the DEX UI on their local servers, etc.


#17

Hey @okwme,

  1. by itself the DAO cannot handle any off-chain permission assets like DNS. In later stage I believe there would be legal structures/vehicles for DAOs such as companies which are obliged to only execute decisions and actions according to rules on blockchain contracts. Those vehicles could be the legal and physical facing of DAOs, and in particular could be holding and operating off-chain assets (such as DNS, but also a fiat bank account and land ownership). In the case of the DNS the alternative would be to hold an ENS and run a decentralized webpage (probably not too far in the future).

  2. I cannot advise on legal status of DAOs, and I don’t think anyone else can :slight_smile: . That said, in some ways I’d say yes, the DAO does resemble in large degree a co-op, club, union, association, or limited liability partnership. It can be for profit or non-profit. I believe that at some point yes, it would be combined with such legal entities, or new similar legal entities would be born to more accurately face the needs and characteristics of DAOs.

  3. Well, the DAO by itself can do any (trans)action on the blockchain, calling any function on any contract. If you imagine what can be done on the blockchain (by any address) you have imagined what a DAO can do. In particular, participating in a prediction market, making business offers to individuals, companies and other DAOs, sending a Peep (http://www.peepeth.io/), offering a bounty, voting in another DAO, ask for external dispute resolution (or participate in other’s dispute), invest in startups or buy lands (via ownership/assets tokenization).


#18

Hey @jwrandolph,

  1. & 2. Leaving this to Martin.

  2. I don’t see why, quite the opposite. DAOstack aims to collaborate with and enable as many as possible great projects, platforms and DAOs (and DutchX is an amazing one to start with). While enabling more and more external platforms the DAOstack ecosystem, and code, becomes more exposed and available to, and staked by, more players, and in that sense it becomes more and more decentralized. I can easily imagine 2 years from now the DAOstack ecosystem, and more broadly the DAO and DApp ecosystem heavily intertwined, cross-reliant and cross-staked between many different projects, tokens and organizations, and thus become a much stronger DApp (decentralized) mesh. The collaboration between DAOstack and DutchX is the beginning of that (perhaps the first one), and I’m pretty sure this would increase greatly over time, already in the coming year of 2019. As Martin told me once, this is perhaps the strongest power behind (and incentive to being part of) Ethereum, the greater, interoperable ecosystem of DApps which are emerging in an imaginary pace.

  3. We believe that the best way to improve the DAO stack is by having real users on it. Providing feedback to each and every layer of the stack, from code to UI, as well as making a testing ground from which we could learn and improve. In that regard, dsDAO is the best early adapter, full with tech savvies, true experimenters, crypto experts and bold partners. We believe that the launch of the dxDAO will be a superb booster to the DAOstack development and adoption.

Thank you!


#19

I think there is a very good chance that anything of value that people want to trade will find a representation as a “crypto asset”. I guess at that point we will no longer call them “crypto asset” - the same way as we do not call $$ in a bank account a “database asset”.

In short - it is the only mechanism (to my knowledge) that is live today and
a) does not require a operator (fully decentralized) (the dxDAO does not play an active role in day to day trade)
b) does not have obvious attack vectors that will make trades loose money (frontrunning e.g. against Uniswap)

More on our blog: https://blog.gnosis.pm/tagged/dutchx

I would not see why. DAOStack will provide the framework for many many DAOs and the dxDAO is simply one of them. However - those DAOs are ultimately controlled by their individual reputation holder.

I believe the dxDAO might be the first DAO (ever) to demonstrate that coordination among 1000+ people that have no connection in “meat space” can work. This is still a radical big experiment but if that works it will change our world forever. Needless to say that in this case that will be a huge boost for the DAOStack ecosystem.


#20

Thanks everyone for the questions!
I think a lot will follow since we all are just yet scratching the surface of all those topics.
As concrete next steps: next week all concrete information around the dxDAO will be made available. How exactly to participate; What it can do; and much more.