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.
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.
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