[Proposal Discussion] Distribute 10% of DMG to DXD holders

Given feedback on the initial discussion and conversation at the recent conference call, I’ve gone ahead and submitted a proposal to signal the distribution of DMG to DXD holders. An approval of this proposal indicates that DXdao agrees to the distribution and will carry out proper steps to execute it.

Here is the proposal: https://alchemy.daostack.io/dao/0x519b70055af55a007110b4ff99b0ea33071c720a/proposal/0xb0becbb4b796a1e9eff24ba0d9debd4cfa6d763fe176e682e01a3af2ff4b64a3

Text of the proposal:

Hi all, given recent discussions on the Daotalk forums and conference calls, I am going ahead with a signal proposal for the distribution of DMG allocation to DXD holders.

DMMDao has allocated 1.5% of the total DMG supply (3,750,000 DMG) to DXdao to participate in their governance.

Proposal

Distribute 10% of the DXdao’s DMG allocation (375,000) to DXD holders. I think the easiest way to do this is to set an exact snapshot time and record DXD balances at Ethereum addresses to Airdrop shortly after. To avoid lost claims from DXD locked in contracts (Uniswap liquidity, open sell order on Loopring, etc.) ignore DXD balances at contract addresses.

Currently, that translates to 375,000 DMG distributed to roughly 18,000 DXD held in non-contract addresses. This works out to 20.8333 DMG per DXD. At current USD prices, that works out to roughly $30 worth of DMG per DXD.

This proposal, if signaled, represents incentives for all parties involved: DXD holders, DXdao, and DMMdao:

DXD holders, of course, will receive a sizable airdrop for their investment in the DAO. A future snapshot date also puts upwards pressure on DXD markets, as speculators may be inclined to buy in ahead of the snapshot date. Additionally, voiding DXD in contracts will encourage a temporary removal of sell-side liquidity on open markets, as holders with open DXD sell positions may withdraw or delay their sales with regards to the airdrop.

The positive price pressure on DXD will lead to new buyers on the bonded curve. Greater issuance of DXD, and as a result, more ETH in the treasury. This is also a straightforward mechanism to deleverage from DMG without placing any open market sales. Currently, 3.75mm DMG translates to over US$5 million. In contrast, the treasury holds about $1.25 million worth of ETH (5.4k) and nominal amounts of other coins and tokens. Of course, a generous airdrop also accounts for a great viral marketing opportunity that can further spread the word, increase holders, and grow the DXdao treasury even more.

The airdrop is also an effective means to help build out the DMMdao decentralization and immediately bolster governance by airdropping the governance token to close to 1,000 DXD holders. DXdao is expected to participate in DMM governance affairs, but that support has not yet been coded in. This distribution means that members of the DXdao can still participate in the DMMdao governance before DXdao itself has baked in that functionality.

A yes vote will signal the DXdao to approve and execute a distribution of 10% of the DMG allocation (375,000 DMG) to DXD holders

2 Likes

Beyond the immediate impacts of this proposal, I think that approval and execution will highlight several characteristics of DXdao.

First, this is a tribute to the 10% revenue share figure that has floated around throughout the documentation, but has not yet been quantified.

DXdao is also seen as an autonomous investment fund. This proposal, undoubtedly, represents an investment decision that allocates treasury funds. It proves that the dao actually has agency over the treasury as an investment vehicle.

This also acts as precedent for further investment proposals. The treasury thusfar has been used to build out the DXdao ecosystem/product suite, it can also be deployed to build more wealth for the dao.

1 Like

I cannot say I agree.

  1. This does not look good for our branding, seems like we would be in it for the money. Does not align with the goal for which the tokens were given.
  2. Rewarding users for investing should not be a priority, we should reward workers.
  3. Adds sell pressure to a partner project.

I’m saying this as a large holder of dxdao and a small rep holder.
I would rather it be given as a bounty for a task that furthers our path to revenue creation.

6 Likes

Echoing this same sentiment, also as a large DXD holder with 0 REP. Even if we ignore the difference in roles between REP holders and DXD holders, it’s also crucial to keep in mind that DMM granted governance rights to the DxDAO itself, not to the individuals thereof. Airdropping tokens to the individuals who have a stake at one particular point in time, who could be gone the next day, is anathema to that concept.

Also, I don’t buy this argument about “deleveraging from DMM.” If you want to govern successfully, your first priority shouldn’t be to dilute your own rights/shares - it should be to work your ass off and make sure the organization succeeds. And I haven’t heard of any treasury shortage at this point, so I can’t imagine there’s a need to do this to raise cash (or ETH, as the case may be).

3 Likes

I tend to agree, I want to know how this governance system will work before doing anything with the tokens

3 Likes

Seems like this is only 1 proposal aimed to somehow support DXD valuation

3 Likes