Omen Guild: Governance, Distribution, & Liquidity Incentives

Background

Since introducing Omen Guild and OMN Token in January, the DXdao team has been building Omen Guild’s governance structure, token distribution plan, and liquidity incentives program. The goal being to create decentralized, community-driven governance for Omen.

We’re excited to share what we’ve come up so far and hope to spark discussion to improve Omen Guild and OMN.

This post was prepared by me, @corkus, and @pulpmachina in coordination with the OMN Token working group and DXdao contributors.

Governance

OMN token incentivizes efficient governance by enabling and rewarding Omen Guild members (“OMN Members”) to maintain and improve Omen. With OMN token, OMN Members can use their voting power to:

  1. Verify and curate prediction markets;
  2. Allocate Omen Guild liquidity rewards to popular markets;
  3. Modify Omen Guild governance capabilities;
  4. Improve the Omen protocol;
  5. Deploy the Omen Guild and Omen prediction market platform on additional networks; and
  6. Engage in new partnerships with oracle providers, arbitrators, trading protocols, and network bridges; and
  7. Establish a fee structure generated from Omen that is allocated to various stakeholders.

As the Omen Guild develops over time, OMN Members will be able to act as governors to curate markets for Omen and be rewarded for their efforts. The Omen Guild will also eventually manage a treasury.

Locking Process & Voting

The Omen Guild uses the OMN ERC20 token for governance. In order to participate in governance, OMN Members lock their tokens for a minimum of 2 months and maximum of 2 years in the Omen Guild governance contract. Voting weight is based on the number of tokens locked in the contract.

Market Verification

Currently, DXdao verifies which markets are valid with Kleros curate, based on the Omen Market Rules. In contested markets with high liquidity and trading, such as the 2020 Presidential Election Market, the question of market validity has been challenged in Kleros court. Though the outcome of Case 532 for the 2020 Election resolved favorably for Omen, the arbitration process was long and drawn out. The uncertainty of the outcome undermined the confidence that users had in trading and providing liquidity on Omen for that market.

Now with OMN Market Verification, OMN members can quickly flag and invalidate markets and earn OMN for their service. Markets the Omen Guild verifies to be valid are, thus, perceived with much higher confidence by traders and liquidity providers.

Here’s how Omen Market Verification works: When a user creates a market on Omen, a 2-day flag period begins, during which any OMN Member can flag an invalid market. A flagged market calls the Omen Guild to vote on market validity for a 1-week vote period.

If a market is invalid, the flagger earns the market creator’s deposit; if the market is valid, the creator’s deposit is returned. OMN Members that voted on market validity earn OMN. Those that voted on the winning side, earn more OMN than those that voted on the losing side. For more details on the technical specs for the Market Verification process see this diagram.

Passing the question of market validity to the Omen Guild brings a new form of collective wisdom to Omen through decentralized governance, giving confidence to Omen traders and LPs that objectively valid markets are tradeable.

Liquidity Rewards

At launch, in order to promote liquidity on the most interesting and contentious markets, OMN Members can vote for markets that will receive liquidity rewards.

When a market is created, a Liquidy Rewards vote automatically begins to ask the Omen Guild whether the market should have liquidity rewards. OMN Members then have 3 days to vote. The Omen Guild can vote to ‘top up’ markets with additional liquidity rewards over time.

Guild Governance Upgrades

The Omen Guild is a lightweight, flexible governance system that is able to not only implement protocol upgrades, but change predefined governance processes, like Market Verification and Liquidity Rewards.

Token Distribution

Fixed Total Supply: 100,000,000 OMN

  • DXdao: 70%
  • Liquidity Incentives: 12%
    • Omen Liquidity Providers
    • AMM OMN liquidity (Swapr)
  • Airdrop: 8%
    • DXD Holders
    • Omen Users
    • Omen LPs
    • Friendly Airdrop
  • Governance Rewards: 1%
    • Market Creators
    • Market Voters
  • Contributors: 4%
    • OMN Squad
    • DXdao Contributors
  • GnosisDAO: 1% for past contributions
  • Mesa Sale: 4% sold for DXD

DXdao: 70% [70,000,000 OMN] will go to the DXdao treasury.

Omen is a product of DXdao. Its operations and development are supported through DXD holder funds, which make up the DXdao treasury.

70% of OMN tokens are held in the DXdao treasury for two purposes:

  1. to act as a symbolic commitment to allocate portions of any fee from Omen to DXD through a buyback program; and
  2. for DXdao to determine, through its established governance, how to allocate OMN tokens for such purposes as future liquidity incentives, other governance decentralization initiatives, and to intervene in any malicious attack of the Omen Guild…

DXdao does not intend to use OMN tokens to directly participate in Omen Guild governance. This is the job of the Omen Guild.

Liquidity Incentives: 12% [12,000,000 OMN] for liquidity incentives in the first year, with the following breakdown:

  • 7M OMN to Omen Prediction Market Liquidity Providers through Omen Liquidity Rewards
  • 5M OMN to liquidity mining on Swapr

OMN Token liquidity incentives improves the value proposition for liquidity providers on Omen, which in turn attracts traders. Liquidity incentives also decentralize Omen’s voting power and user base.

12% of OMN token is currently allocated to liquidity incentives. Though 12% of total supply is already a large portion, DXdao may assign some of its 70% OMN allocation to additional liquidity incentives in the future.

Airdrop: 8% [8,000,000]


DXD Holders: 4.2% [4,200,000 OMN] more than half of the total airdrop allocation will be claimable by addresses holding DXD. The DXD holder airdrop is weighted, based at time of Snapshot.

Omen Users: 2% [2,000,000 OMN] claimable by any address that has traded on Omen mainnet or xDai before May 1st, 2021, as long as that user’s predictions have totalled at least $25. The Omen user airdrop is not weighted.

Omen LPs: 0.7% [700,000 OMN] claimable by market creators and liquidity providers on Omen before May 1st, 2021. The Omen LP airdrop is not weighted.

Friendly Airdrop: 1.1% [1,100,000 OMN] reserved for future airdrops on communities of interest in the DeFi ecosystem.

The following bar graph shows the distribution of the OMN airdrop to community members on a per address basis.

Contributors: 4% [4,000,000 OMN] to DXdao contributors.

  • 2% [2,000,000 OMN] to Omen Squad. This is the core group of contributors working on Omen. Vested quarterly over 1 year.
  • 2% [2,000,000 OMN] to other DXdao contributors. This is split amongst all DXdao contributors who are not directly part of the Omen squad. Vested quarterly over 1 year.
  • The contributor allocation is weighted based on the number of months worked for DXdao and experience level at time of Snapshot. Date to be determined.

GnosisDAO: 1% [1,000,000 OMN] for past contributions.

Gnosis worked with DAOstack to launch DXdao and build the Conditional Token Framework used in Omen. Their focus has since shifted away from prediction markets.

However, there is renewed communication between both DAOs to collaborate both on liquidity incentives and longer-term protocol upgrades. An agreement for future collaboration between DXdao and GnosisDAO could lead to changes in this allocation.

Mesa Sale: 4% [4,000,000 OMN] sold for DXD.

A Mesa sale is dependent on a Mesa MVP at the time of OMN Token launch.

11 Likes

has snapshot for DXD holders already been taken?

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Hello, [theRFnoob here]

Great news!

Following a private chat with @geronimo, I would like to apply to join the Omen Squad. :call_me_hand: :clap:

Keep up the good work!

4 Likes

A snapshot for DXD holders has not been proposed yet.

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@Tammy @pulpmachina @corkus Great work guys! This is very clear and articulate. Can’t wait to see how it unfolds :smiley:

4 Likes