Governor (GDAO) State-of-the-Union

I am absolutely blown away with how the community has rallied around Governor. There are a lot of individuals dedicating their time and efforts to make sure this thing succeeds, and as such, it’s important to approach this in a way that maximizes the efforts of everyone involved.

NOT THE OFFICIAL LOGO

CBDAO pulled the plug on October 8, and in response, the community quickly came together to build out a DAO of our own. Information on the rug and initial formation of Governor can be found here.

Doing it Quick vs Doing it Right

However, this was fueled by the misinterpretation that Governor is something I’d largely have to put together on my own. I could not have been more wrong.

It’s clear to me from the dozens of conversations I’ve had with individuals throughout the community and those that have already taken initiative in discussing governance, creating logos and memes, sharing ideas on VR exposure through Decentraland or otherwise… we have all the resources we need to do everything we want to with Governor.

As such, putting together an airdrop, snapshot governance, and multi-sig control doesn’t do this project justice, especially when we have the manpower to build out the DAO in a manner that maximizes the power.

As I see the current state of the project, there are three distinct areas that need to be worked out:

  1. Airdrop distribution
  2. Governance (and Ownership)
  3. Fundraising (initial and ongoing)

Airdrop Distribution

Initially, the plan was to utilize a Multisend interface to airdrop GDAO to 3k+ addresses. However, it makes more sense to take the route employed by Eminence, where claims are recorded and users interact with the frontend with their Metamask to receive their tokens. This eliminates that 5+ ETH costs to airdrop and also applies a basic litmus test: only BREE holders that are paying minimal attention to Governor get their tokens.

To execute this strategy, we need to fork the Eminence claims Github and plug the GDAO claims recipients in, then hook that up to a website for claimants to easily interact with.

Governance (and Ownership)

This is not a rug-proof approach: if a sufficient number of the multi-sig holders (five-of-seven or seven-of-eleven, for example) collude to rug, they could. There are measures to prevent bad actors, such as KYC requirements, vesting ETH, community elections, and so on, but none of this is fool-proof, and it’s really not ideal to put the project in a situation where there is a non-zero chance of an exitscam.

Beyond that, the Snapshot-plus-multisig is not really a formal DAO. Even if not malicious, key holders could take action that doesn’t align with consensus in governance, which makes the multisig owners not much different than a centralized team.

Fortunately, there are existing products that enable users to build out DAOs with the desired functionalities baked in. It is likely that Governor will be launched as an Aragon DAO, where all token holders have real ownership of the DAO and its treasury.

This is not set in stone, and there are a number of other frameworks that will be explored (Dandelion, Colony DAO, and DAOstack, to name a few). Here are the features required:

  • Token holders own the GDAO token contract and can vote to mint additional tokens.
  • Additional contracts can similarly be owned and operated by token holders.
  • The Governor treasury is managed by token holders and its contents can still be interacted with (ex: YFI held by Governor is still accessible for YIP voting).

Beyond that, the most easy-to-use and gas efficient interface is also of high priority.

Fundraising (initial and ongoing)

There are two fundraising challenges: initial liquidity for Uniswap and a fund for development, marketing, and other pertinent activities (we’d be naive to expect everyone to work as volunteers).

As far as initial fundraising goes, there are three strategies I recognize:

  1. Do nothing, token holders can supply their own liquidity once they receive their airdrop.
  2. Sell tokens in a crowdsale (maybe only whitelisted to addresses encompassed by the snapshot airdrop). The question there is how many tokens is appropriate and at what price. Many are floating around starting prices in the $0.50-$1 ballpark, which I think is a fair range to start out at. ETH raised is pooled with additional GDAO and retained by the treasury. Token holders can remove or add additional liquidity by vote.
  3. Pool ETH through a liquidity generation event (LGE) where users send ETH. That ETH is added as initial liquidity (likely in the $0.50-$1 ballpark) and vested for some period of time. Individuals who pledge ETH receive their LP tokens back per the outlined vesting schedule (ex: liquidity retained for 90 days and then distributed back as LP tokens to the addresses supplying ETH. Or maybe 25% sent back every 30 days).

In scenario 2 and 3, consensus must be achieved on the price to offer tokens at, the number of tokens relative to the supply, and the desired amount of liquidity. Because a majority of the supply will be airdropped, it’s important to go about this in a manner that shields us from a massive dump when the airdrop takes place.

Beyond initial liquidity, we’ll need additional funds for Governor to sustain itself. The Governance-as-a-Service vision suggests that GDAO will be self-sustaining and revenue positive, but this won’t happen on day one. Again, I see five viable strategies for ongoing funding:

  1. Do nothing. Initial fundraising (if any) can be used for recurring project costs.
  2. Hold additional token sales at later dates, as voted on by token holders.
  3. Create a token emissions schedule that allocates some amount of GDAO to the treasury, which can be sold or utilized for bounties.
  4. Incorporate a transaction fee into the GDAO token contract. some amount of every tx is taxed and allocated to the treasury, where it can be sold or utilized for bounties.
  5. Introduce taxed GDAO staking pools, where some amount of every deposit (0.1% 1%, 2%, 10%, whatever) goes to the treasury. Stake large caps and governance tokens (ex: ETH, WBTC, USDC, COMP, LINK, MKR, SNX, LEND) and get a GDAO token drip. Additionally, we can incorporate a boosted GDAO-ETH staking pool with no fees. Funds generated would represent a % of Total Value Locked.

The downside to 2, 3, 4 is that it requires us to sell GDAO to raise funds. The downside to 5 is it’s a risky approach if not done properly, if the rewards are too low/fees are too high it won’t be effective. Vice versa and we’ll dilute the supply of GDAO for minimal gain.

Call-to-Action

Thank you for your continued support and make sure to join the Governor Discord.