What is the dxDAO?
The dxDAO is a DAO (Decentralized Autonomous Organization) designed to facilitate global, open trade. It will develop, deploy, and govern decentralized trading protocols and platforms. The first trading protocol it will deploy and govern is the dutchX protocol. The dxDAO used a governance framework developed by DAOStack.
What is the long-term mission of the dxDAO?
For a decentralized protocol to reach its full potential, every layer of the stack must be decentralized, including governance. When a protocol is sufficiently decentralized at each layer, it becomes more resilient and ultimately more trustworthy for its users.
Without a central governing body, protocols and dApps will be able to more easily sustain themselves and adjust when facing adversarial risks. When the direction and parameterization of the protocol are collectively governed, users become more confident that further versions will align with their interests.
In the future, software—through the collective help of human actors—will own itself, run itself, and strategize for itself. Unlimited value exchange is one of the most critical and vulnerable components of the decentralization stack and where this future begins.
What will the dxDAO govern?
The dxDAO can decide on any governance questions relating to the dxDAO or the DutchX trading protocol. Some examples include updates of the smart contract logic, whitelisting of tokens, changing the fee structure, incentivizing marketing efforts, asking for an additional security audit, or creating a liquidity provision on the DutchX trading protocol.
The DAO may additionally find a need to fund its future open-source development, which would require decision-making around allocating fees. In the future, the dxDAO may then decide to deploy and govern other decentralized trading protocols.
What are the benefits of becoming a dxDAO stakeholder?
With dxDAO governance, users of the DutchX trading protocol can become its collective stakeholders and shape its parameters. More broadly, when the direction and parameterization of a protocol are collectively governed, stakeholders become more confident that future versions of trading protocols will align with their interests.
As a second-generation DAO designed to facilitate global, open trade, the dxDAO will likely have stakeholders which consist of individuals and projects with a strong track record in upholding the values of decentralization—who will collectively shape the future of accessible trade.
How do I become a dxDAO stakeholder?
Individuals and projects can become (dx)DAO stakeholders by obtaining Reputation (Rep), voting rights in the DAO. An initial distribution of Reputation (Rep) will take place after mid-April 2019.
How do I vote and what is Reputation (Rep)?
Voting will be carried out using Alchemy, a DAO interface powered by DAOstack. By default, proposals submitted to the DAO require an absolute majority of voting power to pass—that is, greater than 50% of the total Reputation in the DAO. However, this can be changed so that only a relative majority is required, meaning more Reputation votes for the proposal than against it within a given time frame.
Whether an absolute or relative majority is required depends on the activity in a prediction market, in which proposals may be “boosted” when enough tokens are staked to predict a proposal’s passing by the DAO. This tandem system—Reputation-based voting along with token-based predicting—is the essence of the Holographic Consensus framework developed by DAOstack.
How is Reputation (Rep) distributed?
The initial amount of Reputation (Rep) to be distributed is one million. It will be allocated as follows:
50% Trading on the DutchX Protocol
Each trade worth 1 ETH will generate 1 Magnolia (MGN) token. Those can be activated to generate REP.
30% Whitelisted DutchX Token Lock
Any token available on the DutchX may be locked to generate Reputation (REP). You may choose to lock any token that is listed on the DutchX, the duration (up to one year), and the amount that you would like to lock. Your funds will remain yours but are inaccessible for the indicated duration. Once your personally defined lock-period has passed, you may reclaim your funds on this site.
10% GEN Auction
10% of REP will be auctioned in exchange for DAOstack GEN holers. This will also be used to subsidize the dxDAO’s governance budget.
8% Eth Lock
Ether (ETH) may be locked to generate Reputation (REP). You may lock ETH, choose the duration (up to one year), and the amount that you would like to lock. Your funds will remain yours but are inaccessible for the indicated duration. Once your personally defined lock-period has passed, you may reclaim your funds on this site. The indicated REP is distributed to all participants of this group, weighted by amount and time.
You may lock more ETH as often as you would like during the initiation period.
2% DAO Storytellers
Once created, the dxDAO will reward 2% REP to those spreading the word.
What is the thinking behind the initial Reputation (Rep) distribution?
dxDAO’s initial Reputation distribution seeks to place priority on participation in the dxDAO by those using the DutchX (50% for MGN) but additionally also giving those an option to participate that are long-term committed to the ecosystem (ERC20 + ETH lock)
What else is on the agenda?
The dxDAO is currently in development, and DAOstack, Gnosis, and others are working full-speed for you! These are the remaining steps to having a fully functional dxDAO:
We are working to get the Reputation initiation interface for the dxDAO up and running.
- Initial Distribution - After mid-April 2019
This is when you can take part in the above-mentioned Reputation distribution.
- Redeem Reputation - TBA
Immediately after the initiation period is over, you may redeem your Rep on this site. The redemption period will continue indefinitely.
- Governance - TBA
Be an active voting member in the dxDAO.
What is Magnolia?
Magnolia (MGN) is the intrinsic DutchX token. It is created by trading whitelisted token pairs on the DutchX. One MGN is automatically created for every trade you make that is worth 1 ETH (or any fraction thereof). You will receive MGN automatically upon claiming your new tokens.
Magnolia reduce the fee level (which is your personal liquidity contribution to the DutchX as fees remain in the DutchX ecosystem). The more you trade, the more MGN you will receive, and the lower will be your fee.
Additionally, the more Magnolia you accumulated, the more Reputation you may obtain. Those actively contributing to the DutchX liquidity should be rewarded with Reputation according to their contribution.
Note: Generating Magnolia on the DutchX will only be activated once the Initialization Phase starts! Therefore, it’s important to get familiar with DutchX integrations and trading in order to accumulate MGN by day 0.
Which tokens are whitelisted?
A whitelist is necessary since otherwise, someone could create a fake-token and generate a lot of fake-trading volume and get an unfair share of MGN token. The whitelist is a manual collection of the most relevant tokens. Once the dxDAO is live it can administer this whitelist. If you think a token should be added or removed from the initial list you can make a proposal towards the GenesisDAO.