[IMPACT]
The DAO Token Market is an example of how the DAO-NET smart contract template for DAOs can be used to quickly start up new DAOs to fund operational costs of projects and activities pertaining to a specific community, cause or of a specific type. These examples are to show specific use case on how the DAOs can be used to provide ongoing funding for solutions to any challenge fund problem, any Community Hub or any cause so that once the platform is deployed that others can start up their own DAOs with DAO-NET.
The tokenomics of DAO tokens are radically different then the traditional initial token offerings or ICOs which mint millions or billions of tokens to sell for startup capital. To start there are 0 DAO tokens and the only way that DAO tokens can be minted is through the Development Funder process which mints DAO tokens whenever the community, funders and proposers reach a free market price point at which they agree to fund a proposal. This token minting process is believed to be completely free of potential SEC rulings of being a security however legal counsel will be sought to confirm through the DAO-NET: DAO Atala Prism DIDs proposal.
The number of DAO tokens in circulation will be minimal initially, likely numbering in the thousands for the first week, tens to hundreds of thousands for the first month and is unlikely to surpass a million tokens until 2-3 months after launch unless there is a large early membership adoption. This limited token pool size is likely to be problematic for most DEX or Automated Market Maker solutions as a reserve pool of tokens is required for the market to function.
This proposal is to bootstrap the initial DAO token market by creating a temporary smart contract that will purchase a fixed amount of DAO tokens at the floor price of 0.25 ADA per DAO token using the seed capital from this proposal. When the initial token purchases are complete then the $5K of DAO tokens along with $5K in ADA would be transferred to an existing Automated Market Maker solution to form the initial market reserve.
If the DAO-NET: Development Funder proposal is not funded then the budget portion of this proposal related to the temporary smart contract and the seed capital are not to be released by Project Catalyst until the Develpment Funder or some alternative DAO token minting process is successfully implemented.
The long term strategy is to build up the DAO-NET ecosystem to be a self-sustaining collection of DAOs offering services and products to one another, similar to how companies currently offer services and products to one another, using DAO tokens for transactions. Due to the numerous complex smart contracts required for DAO-NET as it scales, DAO-NET will eventually require its own sidechain, at which point DAO tokens will be used to pay for transaction fees, see the DAO-NET & A2T Sidechain Design proposal for details.
DAO-NET will have multiple funding sources for growth including a Mission Driven Stake Pool to be launched in May, a merchandising campaign (see the Merchandise Store project) and the DAO-NET: Development Funder project.
This proposal meets the real business need for a starting market for the tokens in the DAO-NET suite of applications and aligns with the key metrics listed in the challenge including:
- the DAO Token Market will be used to fund development of Cardano Dapps to support business solution development as an integral part of the DAO-NET: Development Funder project
- involves partnering with Dex and AMM companies
- involves additional funding from multiple sources for the proposal as outlined above
- will involve a significant increase in mainnet activity as part of the DAO-NET suite of applications
The outcome of the project will be communicated via Town Halls and a DAO-NET & A2T Marketing campaign.
There are minimal risks for delivering this project successfully however post-delivery there is a risk that interest and the value proposition for DAO tokens are not sufficient to maintain a market due to its minimal initial utility. This will be addressed with the development of a dedicated side chain using DAO tokens to pay for transaction fees.
[FEASIBILITY]
May 2022
- Outreach to existing DEX and AMM providers for DAO token market services
June 2022
- Continued outreach to existing DEX and AMM providers for DAO token market services
July 2022
- Prototype DAO token market bootstrap smart contract
August 2022
- Delay as DAO-NET: Development Funder undergoes smart contract audit
September 2022
- Test DAO token market bootstrap smart contract
October 2022
- Launch DAO token market bootstrap smart contract
- Migrate reserve pool of DAO/ADA to partner Automated Market Maker
Plutus Developer ($1000/month): $6,000
Initial Reserve Pool for AMM: $10,000
Product Manager ($500/month): $3,000
Total: $19,000
Skills Required
Product Manager
- have a holistic understanding of the DAO-NET suite of proposals
- experienced in managing multidisciplinary teams in up to a dozen projects simultaneously
- ability to articulate and fluently translate between business and technical requirements
- able to manage large complex budgets
- experienced in hiring consultants and third party contract negotiations
Lead Developer
- Full stack developer experience
- Plutus development, especially algorithmic DAO smart contract primitive
- Define technical requirements
- Integrate multiple software components into a larger solution
Plutus Developers
- Full stack developer experience
- Plutus development of smart contracts, Plutus Pioneer preferred
Team
Product Manager: Dwayne Collard - 20 years+ IT Consultant, Solutions Analyst, IT Manager, Veteran Community Advisor https://www.linkedin.com/in/dwayne-collard/
Lead Developer: Jude Ben - 9 years+ Software Development , Plutus Smart Contract Development , Cloud and Infrastructure Engineer https://www.linkedin.com/in/judeebene/
Plutus Developers: As part of previous DAO-NET funding, DAO Coders has been building a small pool of, currently 3, contractors. This work will be done by existing or new contractors that will be added to that pool, depending upon availability.
[AUDITABILITY]
Development progress will be tracked using an agile methodology and weekly team meetings. Specific quantitative indicators to be tracked will be Total Number of Pull requests in Github, Total Numbers of Github commits and the Total Number of Errors Fixed.
Success Criteria
- Initial DAO Token holders are able to exchange DAO tokens for 0.25 ADA each using the bootstrap DAO Token Market smart contract.
- When half of the initial ADA in the bootstrap DAO Token Market smart contract has been exchanged for DAO tokens then the ADA and DAO tokens in the smart contract are successfully transferred to a third party Automated Market Maker.
This proposal is a member of the DAO-NET suite of proposals originally submitted in Fund 7 and continued in Fund 8. This proposal is an update of the DAO-NET: DAO Token Market proposal in Fund 7.
In Fund 7, the following DAO-NET suite of proposals were funded: DAO-NET: DAO Deployment Platform, DAO-NET: Legal Defense DAO, DAO-NET: Auditor DAO and DAO-NET: Multilingual Translation.
In Fund 7, there were a total of 8 other DAO-NET proposals that were approved but not funded.
All of the DAO-NET suite of proposals are interrelated but each proposal in Fund 7 could be standalone funded. The core DAO smart contract coding was funded with the DAO-NET: DAO Deployment Platform project which means that this work no longer needs to be contingency funded in Fund 8.
DAOs are a paradigm evolution in how societies organize themselves and the DAO-NET vision is to systematically progress towards that evolution by breaking the larger vision down into small incremental steps with each proposal. As part of that vision all DAO Coder Inc intellectual property is intended to be freely shared with the world so that any insights can be duplicated in other experiments to rapidly advance decentralized governance therefore:
- All software developed as part of this proposal will be Open Source under Apache License, version 2.0
- All documentation will be licensed under the Creative Commons Attribution 4.0 International Public License
In Fund 8, DAO Coders Inc has submitted 2 categories of proposals Alternative to Tyranny (A2T) proposals which are decentralized wargame simulator modules for testing decentralized idea implementations against probable authoritarian responses and DAO-NET proposals which are real world implementations that can be implemented immediately.
A2T and DAO-NET share a lot of base smart contract code and are meant to be interoperable to the largest degree and conceptually share similar designs. As new features are added in either suite then the transfer to the other suite of those improvements should be straight forward however since each suite is designed to be independently community run, after launch, this easy interoperability may diverge over time.
In Fund 8, DAO Coders has submitted the following proposals: