Partnership Proposal - GnosisDAO <> dxDAO
This Proposal is also posted on DXdao forums:
History of collaborations
- Gnosis together with Daostack bootstrapped DXdao
- Gnosis launched DutchX and handed control over to DXdao.
- DXdao and Gnosis together developed and launched Omen.
- Gnosis developed Mesa/GPv1 and handed control over the interface to DXdao which is hosting it.
- Jointly pushing forward prediction markets use cases, as well as trading and IDO use cases.
Both DAOs strive to empower their communities through decentralized governance and self sovereignty which is in and of itself a possible collaboration area. Both DAOs believe in DeFi and prediction markets as a future globally important infrastructure. Ethereum is the home for both DAOs governance and products.
In light of the successful collaboration history and common values, we believe future collaboration will be mutually beneficial. Below are a few points of synergies and advantages:
- Complementary skills:
- Gnosis is strong in developing contracts/backends.
- DXdao is strong in frontends/solidity.
- Both DAOs are in the need for tooling for decision making and can collaborate to improve DAOs overall.
- Both share the vision for decentralization.
- Both have a collaboration with Kleros.
With this proposal we want to get broad community feedback. It will be cross posted on both DXdao and Gnosis DAO forums. Everyone’s opinion is important so please express your opinion even if that’s just agreement / disagreement with a specific part of the proposal.
Once there is a soft consensus on the general structure of the partnership, we can add more details to the product partnership itself (shared product vision, feature roadmap and contribution).
Setting up aligned incentives between DXdao and GnosisDAO is important in order to ensure the partnership will thrive for the long term. It will ensure both parties benefit equally from the efforts of advancing a joint product roadmap. While only agreeing on the incentive alignment will not guarantee a successful partnership - as also an agreement on the roadmap vision and the collaboration itself will have to be found - we believe it is key to our long term partnership.
Mutual Liquidity Sharing - The DAOs will create a DXD/GNO swapr pool and jointly fund it according to the following schedule
Day 0 - Deposit: 500k$ worth of each token, Total pool liquidity: 1M$
Month 3 - Deposit: 125k$ worth of each token, Total pool liquidity: 1.25M$
Month 6 - Deposit: 125k$ worth of each token, Total pool liquidity: 1.5M$
Month 9 - Deposit: 125k$ worth of each token, Total pool liquidity: 1.75M$
Month 12 - Deposit: 125k$ worth of each token, Total pool liquidity: 2M$
*Total pool size may change according to market prices
Mutual liquidity sharing creates incentive alignment in few aspects:
- It binds the token price of both tokens using a liquid bonding curve. Each DAO will benefit from the success of the other
- It creates a massive liquidity bridge between both tokens on-chain liquidity. Thanks to DEX aggregation, both tokens’ liquidity will be enhanced by allowing GNO or DXD trades to be routed through each others’ liquidity pools.
Voting Rights Allocation - Both DAOs will allocate each other voting rights. One suggestion for how it could work practically:
- DXdao could use GNO in the shared liquidity pool to vote on Gnosis DAO proposals
- Gnosis DAO will be allocated the equivalent amount of REP
Agreeing on a shared manifesto / statement?
- All future product revenue will be split 50-50 between DXdao and GnosisDAO (this includes contract level fee, front-end level fee or any other form of revenue from the product)
- Agreeing on a product vision (1 page max)
- Agreeing on a 6 month feature roadmap
- Agreeing on work and funding contribution for the 6-month product roadmap
We think this is the most relevant product to establish the collaboration on, and hope this will pave the way for more collaborations to come.
Addressing the topic of token price
As we know, both GNO and DXD are now trading below their respective DAO book value. This might raise the general question of if/how to use treasury tokens while the market price of the token is below FV. Each DAO will need to answer this question independently.
Below we list a few possible approaches:
- One approach will be to just use tokens from the treasury with the current floating market price. This is the most practical approach and especially suitable if those tokens will be used to fund an AMM liquidity pool.
- Another approach would be to allocate ETH for buying tokens from the open market to bring the price back to FV. Then use the proceeds (with additional treasury tokens if needed) to initiate the partnership.
- A third approach will be to use the fair value of the token for the swap without intervening in the market. This could be somewhat controversial as the current value of the swapped tokens is at a big discount.