Happy Labor Day + Links + DXdao
Full version back next week
Note: Happy Labor Day to my American readers. This is an abbreviated, special edition of Dose of DeFi. The weeks links - Odds and Ends & Thoughts and Prognostications - are listed below, but before that, an update on me.
For the past few months, I’ve become more involved in the DXdao community and am now working as a contractor for DXdao. Although the collective eschews official titles and hierarchies, my areas of focus are governance and product strategy.
DXdao is an ambitious project that hopes to “decentralize DeFi” and build governance tools that help it scale to the largest organization in the world. I was fortunate to contribute to the soon-to-be ratified DXdao manifesto, which you can read below or find it on IPFS.
In addition to the manifesto below, you can find more info about DXdao on its website or join the (awesome) Keybase. Also, DXdao is recruiting workers across a host of areas. See openings here.
Dose of DeFi should remain the same :-) and I will flag my conflicts of interest when they arise. Back in full form next week.
Odds and Ends
Over 40% of Ethereum mining revenue in August came from fees Link
UMA team up with REN to launch BTC-backed Yield Dollar Link
Compound Proposal to Cut COMP Farming Rewards by 20% Link
Cozy Finance raises $2m to tackle DeFi risk management Link
DeFi Flippening: Uniswap topples Coinbase in volume Link
Thoughts and Prognostications
yETH vaults explained [Andrew Cronje/Yearn.finance]
Why “naive” solutions to high gas prices won’t work [Vitalik]
The saga of Sushi: things that went right and wrong [Mikko Ohtamaa/FirstBlood]
DeFi Lending doesn’t exist yet [Jake Chervisnky/Bankless]
DXdao is a decentralized collective that builds and governs decentralized products and services for the world. It aims to be an open community that reaches consensus in a transparent and fair way.
This document lays out the history, intentions and principles of the community to guide DXdao.
DXdao launched on Ethereum Mainnet on May 19, 2019, through a collaborative effort of the teams at Gnosis and DAOStack. Reputation (REP) holders govern DXdao. REP is not a token; it is associated with an Ethereum address and cannot be transferred.
There were 3 major ways to receive REP during the launch phase:
380k in lock drops rewarded for depositing ETH (80k) or other ERC20 tokens (300k) for a two week period
500k from trading on the DutchX exchange and registering MGN
100k for purchasing REP with GEN
399 Ethereum addresses participated in the initial REP distribution. Since then, one address self-slashed theirs and an additional 27 addresses have earned REP by contributing to DXdao, which has inflated total REP by 30% to 1,297,845.43 REP as of August 2020.
After the initial REP distribution, DXdao moved to launch a token (DXD) to raise funds for the DAO. REP holders voted on April 25, 2020 to launch a bonding curve to mint DXD in exchange for ETH to be held in DXdao’s treasury, which is controlled by REP holders. The price to mint DXD is denominated in ETH and goes up linearly as more DXD is minted. DXdao has a 100k DXD pre-mint that unlocks continuously over three years. The full DXdao treasury can be seen here.
DXD holders are entitled to the financial value created from DXdao products. In its current configuration, 10% of all revenue from DXdao products is deposited into the DXD smart contract buyback reserve as ETH and thus supports the price of DXD. REP holders can raise, but not lower, DXD holders’ claim to 10% of revenue.
DXdao is on-chain
No individual speaks for DXdao - DXdao is a community with many voices that contribute to its permissionless, decentralized narrative. Anyone can claim to speak in the best interests of DXdao, but only formal proposals passed by REP holders on-chain speak for DXdao.
Openness and transparency - The entire history of DXdao can be viewed on the Ethereum blockchain. Major decisions should be discussed openly and ultimately resolved by REP holders on-chain.
Holographic Consensus - proposals are passed through a majority vote of REP holders, but in order to scale its decision-making, DXdao employs holographic consensus to pass proposals with just a relative majority. With holographic consensus, when a regular proposal is submitted, anyone can stake on the outcome of the proposal and if it reaches a certain threshold of staked tokens, it is “boosted” and can be passed with a relative majority.
Decentralization for the world
Scaling decentralization - DXdao’s governance design separates financial value (DXD) from voting power (REP), which allows for greater decentralization. DXdao’s structure enables it to distribute REP and scale to be the largest organization in the world.
REP is earned - REP is earned by community members who contribute to the DXdao. It is non-transferrable and can be slashed.
Global community - DXdao is a collective that transcends borders as does its products, which are globally accessible and permissionless. DXdao strives to build an inclusive global community.
Governance is the solution
DXdao relies on emergent structures and processes. Ideas, initiatives and consensus arise from the community and it’s the responsibility of DXdao governance to gather these signals and guide the collective.
At its core, DXdao aims to build tools, products and processes that allow decision-making to arise from large decentralized communities.
Fearing central operators, some projects opt for no governance. This leads to stagnation from decision paralysis or it is co-opted by unaccountable off-chain governance. DXdao recognizes the need to adapt and build new systems that reach consensus in a scalable, decentralized and effective way. Consensus is not an end, but a process.
Open discourse and respect in reaching consensus
DXdao strives to reach consensus after productive debate while respecting all members’ input. Discussion should be based on facts and principles; arguments should not be directed at specific individuals and the DXdao community rejects harassment of any kind.
DXdao governance and discussion should strive for transparency to all community members. It is incumbent upon DXdao community members to coordinate their actions and communicate with each other across the DXdao forum, online chats and community calls.
DXdao encourages friendly and challenging discussions; this open discussion is valued and crucial to the workings of DXdao. Openness means building out in the open, and this bleeds into everything.
DXdao expects community members to operate and communicate with integrity and respect for each other.
DXdao builds space for communities, while honoring the individual, and accepts accountability and responsibility for the actions and influences of the DXdao, in order to further self-improvement.
This manifesto represents the current history, ideals and goals of DXdao.
That’s it! Feedback appreciated. Just hit reply. Written in Brooklyn, where open streets have reinvigorated neighborhoods.
Dose of DeFi is written by Chris Powers. Opinions expressed are my own. All content is for informational purposes and is not intended as investment advice.