Building DAO: Business Model, Revenue Split, & Governance Upgrades

As per the original methodology behind Governor and early materials (such as the Litepaper), our mission to promote the DAO model includes a need to build out the internal Governor DAO as optimally as possible.

The following provides insight to the Governor vision we are building towards as part of the broader Governor timeline.

We believe the DAO model is demonstrably superior as an organizational structure in its ability to create an environment that is highly scalable and equitable to all participants. In order to realize this in our own DAO, three benchmarks must be met:

• Permissionless opportunity for anyone in the community to contribute and earn.
• Baked-in-code revenue split to token holders.
• Formal ownership of contracts and administrative responsibilities by the community itself (and ultimately, without a hierarchical administrative “team”).

Here’s how we achieve that.

1. Governor Salesforce

Every product is designed with two considerations in mind: how to generate revenue and how to outsource sales to the community.

The DAO-as-a-superior-business only resonates if the business is generating cash. Beyond that, the DAO is only superior in its ability to scale when anyone can partake in collective cash generation.

Each product and service offered by the DAO will offer a percentage commission rate to those who refer buyers and clients. This commission is set and adjusted by DAO vote and, when possible, written into the smart contracts themselves.

Our first product, the Proof-of-Existence registry, will formalize this commission in code. Here’s how it works.

1. After our successful, internal Proof-of-Concept, we will introduce the production-ready Proof-of-Existence token and market it as the global whitelist of provably unique users.
2. Registration will be coded into a smart contract and sold along a bonding curve: early users get a cheaper rate and later users pay more. The intention is that an industry standard address whitelist will be utilized for the likes of airdrops and other earning opportunities. As such, the bigger the list and more widespread its adoption, the more value of being registered increases.
3. Whenever a user signs up and pays to authenticate, they will be prompted to input a referral address. If a referral is entered, the referrer will automatically receive their split of the profit.

Additionally, ownership of Governor NFTs will further boost that profit split. The boosts for NFT holders will similarly, automatically increase commission rates. If someone holds one of each NFT, they get a 1.5x boost on that referral payment.

We will also offer bulk sign ups that projects can purchase and forked Proof-of-Existence registries for projects that want their own, unique token. In these cases, as well as through other deals negotiated as part of our Governance-as-a-Service package, referrals similarly keep a percent commission.

2. Governance Vault

Governor Sales Force establishes our ability to engage all community members for meaningful earnings, but what about the remaining earnings? Token holders do own the Governor treasury and revenue generated, but we need to formalize that ownership link so token holders can use it as per their best discretion.

The GDAO Governance Vault enables this formal ownership of project funds as well as the ability for more nuanced approaches to revenue sharing, such as buyback of GDAO tokens for vault participants.

The Governance Vault will operate similarly to other projects (such as Sushi and xSushi). You deposit GDAO and receive an associated amount of xGDAO (ticker name pending). At launch, 1 GDAO = 1 xGDAO. Every time GDAO is bought back from accumulated revenue, it is sent to the Governance Vault and automatically distributed among all current xGDAO holders. This increases the underlying GDAO value of xGDAO, so depositors will always passively accumulate more GDAO so long as buybacks occur. xGDAO can only go up in terms of underlying GDAO value, never down, and users can redeem xGDAO for the underlying GDAO at any point.

Token holders will vote to adjust the rates in terms of % of revenue designated for buyback, frequency of buybacks, and so on.

3. Contract Ownership Handoff

Beyond revenue share, the Governance Vault enables two new functionalities.

1. Voting can now take place in xGDAO, indicating that users no longer will have to make a decision between parking their GDAO to earn yield or holding to maintain voting weight.
2. We can assign admin roles and contract ownership to the Governance Vault itself.

Over time, we will provide more and more ownership control and administrative responsibilities to the Governance Vault contract. In doing so, we’re relinquishing these permissions back to the xGDAO holders themselves. Ultimately, there will be no administrative multisig wallets or otherwise: all will be wholly controlled by the Governance Vault.

NOTE: The diagram above assumes 25% commission rate, but this number is ultimately determined by vote.

At this point, we’ve solidified a pure DAO format with permissionless onboarding. Anyone in the world can work for the DAO and exchange capital for revenue share and voting rights. The sooner we build out this model for ourselves, the sooner we can establish ourselves as the authoritative “DAO of DAOs” to help service and enable the DAO future — first in the world of blockchain, then across digital and physical businesses alike.