On Governance- a DxD Thread

On Governance


The underlying issue of REP belongs to a Governance Model that should be explored globally as we seek to create the framework of DxDaos Governance Model.

The following are my 2 sats on DxDao’s Governance Model.

The issue is: How do we grow our DxDAO Governance Model, as decentralized as possible while aiming to reward involvement, creation, and respect of property rights and strike a balance between the collective will of each party and its individual members: (1) REP Creator/Holder (2) DXD Investor/Holder and (3) The Potential Investor.

(1) REP CREATOR/HOLDER
a. Incentivize Creation- Allow REP Holders to stake their REP.

  • REP Holders should be allowed the opportunity to stake their REP on the Proposals Lifespan: Proposal Creation, Accepted Work Product. If for example a REP Holder stakes on a proposal, it passes and is completed and the Proposal is an Accepted Work Product the REP staker earns REP rewards. Thus, the REP holder is rewarded with extra REP but only after the Proposal is fully satisfied to the terms of the Proposal Agreement .

  • By allowing REP Holders to stake their REP this accomplishes various attributes: A REP holder, given their accomplishments as a token holder, will naturally be more attuned to the specifications that were discussed, proposed, voted on and accepted. By staking REP, REPs have “skin in the game” even at the discussion level, by locking in their REP at proposal time, this helps keep work quality at the highest level until the Work Product is completed. Moreover, this provides Proposing Parties the encouragement and mentorship from REP holders to succeed in the endeavor. Proposing Parties, if they fulfill their agreement, are celebrated and rewarded for the furtherance build of the community.

  • To decide if a Proposal has been Completed and Satisfied, 5 REP Holders and 4 DXD Holders are randomly chosen to judge and if Work is approved, both earn DXD for their duty. If no resolution is reached between the Proposing Party and REP holders the dispute is turned to KLEROS as a third-party arbitrator. If Proposing Party loses arbitration, the REP that was staked is burned. Hence the REP gets burned for a faulty completed project. If a Proposing Party wins, the REP holders earn their REP and are returned their stake. This aims to ensure the quality of product and accountability by bringing both of DXD’s community.

  • Further, These REP tokens could then be burned to the DXD bonding curve, yielding a favorable ROI to the REP Holder, benefitting the community as a whole with a higher value, (assuming that the REP equals yielding products in the form of the value of DXD). This idea attempts to create a circular economy within the REP Holder, the REP Creator, and the DxDao Community.

DXD Investor/Holder
a. Incentivize Participation via Staking at the Accepted Proposal level.

  • Allow DXD Holders to also participate in the Community Creation in a meaningful way by staking their DXD in Accepted Proposals. If for example, once a Proposal is passed, DXD holders should have the ability to engage in the community by vetting the Proposal, the Proposal team, and if they feel strongly, they can stake their DXD and become rewarded at the Completion of a Successful Proposal. Such DXD Holders would be further inclined to follow along with the Proposal’s Team Road Map, its progress and in turn, become a passionate member in the community.

  • GEN and Discussions on Proposals are the current forms of engagement. However, the Holder community, because it has no direct access to decision-making process is currently neglected from this participation. This can run the risk of Holders becoming apathetic or impatient given that their agency to support in the creation is taken away.

  • To remedy this, there should be a strong consideration for DXD holders to not be mere recipients of a higher token price, but should earn meaning from to their stored energy in the form staking their DXD at the Accepted Work Proposal level. This aims to create a vibrant community members where the DXD holder can become an active participant all throughout the life of a project.

The Potential Investor
Onboarding potential investors of the DXDAO should be met with Governance of fine silk UI/UX comfortability while showing that their efforts, if they should contribute, could lead not only to great rewards but to a greater meaning with their time and involvement.

TLDR; REP does not act or operate as a vacuum, it is an issue of Governance. We should explore the Creation an approach that is centered in community engagement that rewards the members via staking at all formal working levels.

5 Likes

Thank you for taking the time to think about DXdao governance and writing up your thoughts.

Incentivize Creation- Allow REP Holders to stake their REP

REP holder do stake part of their total REP on voting on proposals. Every voter has “skin in the game” because they could loose their staked REP IF they are voting on a proposal which will not pass. For example the Funding and Voting Power Connection punishes voters with burning 4% of the total REP if they vote on the wrong outcome.

Further, These REP tokens could then be burned to the DXD bonding curve, yielding a favorable ROI to the REP Holder, benefitting the community as a whole with a higher value, (assuming that the REP equals yielding products in the form of the value of DXD). This idea attempts to create a circular economy within the REP Holder, the REP Creator, and the DxDao Community.

You need to know that REP is not a token and with that not transferable/sellable.

Allow DXD Holders to also participate in the Community Creation in a meaningful way by staking their DXD in Accepted Proposals. If for example, once a Proposal is passed, DXD holders should have the ability to engage in the community by vetting the Proposal, the Proposal team, and if they feel strongly, they can stake their DXD and become rewarded at the Completion of a Successful Proposal. Such DXD Holders would be further inclined to follow along with the Proposal’s Team Road Map, its progress and in turn, become a passionate member in the community.

This is actually a really interesting idea which is technically possible today. DXD holders could participate in governance by using DXD to predict on outcomes. Currently GEN is used to predict which proposal will likely pass. GEN could be replaced with DXD.

5 Likes

Yes, I very much like the idea to replace GEN by DXD for staking on proposals. This would integrate interesting parties only holding DXD to participate and contribute in the process of decision finding and thus influencing the course of the DXdao through a financial perspektive.

Right now, DXDao balances the interests between the stakeholders as a workers cooperative. The decision makers are REP holders who contributed work to DXDao. DXDao needs to have some deeper discussion on whether this status quo should be maintained or changed. There are some serious advantages to a worker owned cooperative, even for DXD holders. With the speed at which technology is changing, many DXD holders are not as knowledgeable as DXDao work contributors.

Onboarding potential investors of the DXDAO should be met with Governance of fine silk UI/UX comfortability while showing that their efforts, if they should contribute, could lead not only to great rewards but to a greater meaning with their time and involvement.

White glove treatment for potential investors makes sense in the context of a competitive VC environment where runway can make or break a project. This is simply not the situation DXDao finds itself in. Providing this sort of support is expensive, would add complexity to governance (who does the whale investor meet with) and creates legal liability. If DXDao transitions away from a worker’s cooperative and towards some other structure, then this may make sense.

5 Likes

Potentially to make some sort of equlibirum for DXDAO holders should be allowed REP in terms of potentially staking DXDAO - they are the core of the crypto input and generally need that rationale of input for active involvement and so things do not go stale. I do agree though current participants are not as deeply tech involved as REP holders, but this also begs the question of capital re-allocation within the DXDAO itself, is there capital incentive in REP holders to disperse to DXDAO holders after intial funding methods?

4 Likes

imo REP is the decentralization buffer for DXdao. There should always be a deference towards more REP distribution to ensure that single parties don’t become powerful. The goal (I believe) is to have something close to universal suffrage, but the challenge is how to ensure REP is only distributed to those that have contributed to the DXdao? I’m not sure how all this works, but the process of REP distribution should be persistent but slow. DXdao should have a more cohesive philosophy around REP distribution.

I think the ideas for DXD investor/holder are great. It’s good to feel apart of the community and governance is a low bar way to do this. I wonder where DXD could be staked that would benefit the DAO? Perhaps in a DXswap pool or on Mesa?

4 Likes

is there capital incentive in REP holders to disperse to DXDAO holders

That’s the power of using a continuous fundraise rather than a once off. Unlike ICOs, the voting members in DXDao are incentivized to make good on their commitments (10% of revenue to curve) since doing so increases demand for new DXD purchases from the curve. In game theory, it changes the dev-investor dynamic from a single game to a series of games where trust can be built over time.

@Powers

[T]he challenge is how to ensure REP is only distributed to those that have contributed to the DXdao? I’m not sure how all this works, but the process of REP distribution should be persistent but slow. DXdao should have a more cohesive philosophy around REP distribution.

Exactly this. Right now DXDao functions as a workers cooperative. Work contributors hold most REP. There needs to be a discussion as to whether this is the future DXDao wants. I believe the worker’s cooperative structure to be beneficial to both contributors and DXD holders. If you want to get more involved - post on the forums, say hello in the keybase chat, and see if there’s some skill you have that DXDao can benefit from.

3 Likes

This is all very fine but the thing that I think we should be crystal clear on is making sure that there are distributions made to DXD holders and that its explicit how that is done. Relying on taking DAO profits to buy from the bonding curve doesnt make a lot of sense to me

3 Likes

Completely agree, since DXDAO holders are the only ones in the funding model.