Make the DXDao become an active governor in today's decentralized protocols to start generating revenues

Hi guys,

I’ve been reflecting on the current strategy of the DXdao which is to fork popular DeFi projects to make them DXdao-owned and generate revenues for the DXdao that way. I think it’s a great strategy but I also think it is worth updating it a little given the recent developments in DeFi (fully agree with what @clesaege said here).

TL;DR Given its treasury, on top of building new products like DXSwap, the DXDao could (“should” imho) become an active governor in today’s decentralized projects. This would put the treasury to good use to start generating potentially sizeable revenues and increase the visibility of the DXdao

It seems like a perfect fit for the DXDao as it plays on its 2 strengths:

  1. the DXdao sizeable treasury. The treasury will make sure that the DXDao can earn enough tokens to be able to submit proposals in the projects it decides to be involved in.
  2. the DXdao ability to debate and take decisions collectively. Obviously, every proposal or vote on proposal will be put to vote to the DXDao members.

As these newly launched projects have liquidity mining incentives, all the tokens mined could be treated as revenues and put in the DXDao reserve, which will start lifting the sell curve of the DXDao to the benefit of DXD holders.

Note that, at this stage, it’s too early increase the revenue_commitment of the DXDao (set at 10% today) but I would propose to have a decision on how to manage the revenues generated by this activity. For example, one could say that this requires say 2 persons full-time per project so we could have a revenue utilization like the following:

  1. Revenues generated by this activity are used to cover the day-to-day compensation of the persons working on it full-time (not accounting DXD and/or REP associated)
  2. Once (1) is covered, the reset is split like this: 80% goes to the DXdao reserve and 20% in the DXdao treasury

It should also be decided if the tokens earned by liquidity mining are sold immediately or held or a mixed of both. Projects that comes to mind where DXDao might consider getting involved:

  • YFI
  • Swerve (pending audits I suppose)
  • Balancer
  • Compound
  • Synthetix
  • <you name it>
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Yeah, I think the DXdao would benefit from active treasury management.
Liquidity mining is a great opportunity but I still think some opportunities carries some risks if those are not mitigated.

We’ll soon have a curate TCR of ‘safe’ farming strategies and the DXdao could manage its treasury among those and would split it to decrease the overall variance of those strategies.

Also keep in mind that in the current farming craze, reacting at ‘DAO speed’ (1 week) adds some significant challenges. Both in term of chasing the highest risk-adjusted yield which is moving and in term of reacting fast to adverse event (for example Sushi was ‘safe’ due to the 2 days timelock for the migration which would have allowed the owner to steal the funds, but a DAO having a 7 days reaction time could be robbed).

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this is a strong +1 from me

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Yes - this makes a lot of sense. YFI has been active in yield farming, of course, but they’re now getting more involved with governance of these protocols (Curve as the most obvious). YFI basically has this capital pool from its users to direct to whatever protocol it wants. DXdao, meanwhile, could do this with just its own capital pool (treasury). Although, @clesaege’s idea of a TCR of safe farming strategies makes me wonder if DXdao could use its own capital pool AND direct its users/community.

This does seem core to the mission of DXdao and a way it can expand its influence/reach into DeFi protocols.

There are some technical integrations for how DXdao (and REP holders) participate. To me, it makes sense to start first with Compound and integrate with the lending and governance side. The timing of the governance systems don’t match up with Alchemy right now, but something to work through.

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Great,we also can cooperate with these project in government as a service

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The TCR of yield farming strategies has just been launched
Kleros Cooperative will be allocating at least 1M$ to its strategies and give 10% of the yield to strategy submitters for the first 3 months using a strategy.

There may be a collaboration opportunity there (the DXdao could be the governor of the TCR, it could host some website showing the strategies).

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How’d dxdao move forward with this ? sorry im not a super technical person.

This is definitely interesting. Here’s something I wrote on this topic for YFI which I think applies perfectly to DXdao.

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