DAO: What’s in it for me?
Ok, DAOs give access to governance. Great. But, let’s be honest: most people enter crypto for the investment opportunity, at least in part. So what’s in it for me?
Since a DAO is literally run by the community (of token holders, usually), the exact benefits are less by the team’s design and more by proposals and voting, hence they can be anything and vary widely from DAO to DAO. Still, let’s review some of the more obvious/common ones with the DeXe DAO as an example.
Soon after DeFi gained steam, the degen farming game went into full swing: sky-high yields so unsustainable that most farm tokens quickly nosedived towards zero, rewarding only those who got in early and mined enough to cover their initial deposit (and then some). There is a better way when the community (via the DAO).
Take DeXe, for example. We are planning to implement regular rewards based on the number of DEXE held (and maybe KTN and 111PG’s token too). Maybe we’ll give a higher weight to those holding tokens longer. Maybe there will be reward opportunities from our partner projects for our ecosystem’s token holders. As a DAO, the details are up for voting, but the possibilities are plentiful. Just think of the value in rewarding true HODLers and thus voluntarily locking in liquidity (=reduction of supply).
Brilliant people are drawn to crypto because of the freedom to create radical, innovative improvements. People enjoy creating something amazing and being recognized for it. In a DAO, anyone can pitch an improvement and potentially get a grant out of the Treasury to make it happen. With the community deciding on grant approvals, you no longer have to rely on the whims or vision of the project’s founder.
Even Vitalik’s proposals have opponents with alternate proposals — and Ethereum’s the better for it. In the DeXe DAO, you can get grants based on your proposal’s merits and utility as decided by your peers who are vested in DeXe and want it to succeed as much as you do.
You can look at Uniswap for a sample successful DAO governance model, including for grants. When they issued the UNI governance token, it gave 60% control (=60% of the supply) to the community, with the remaining portions (team and investors) being locked into a 4-year vesting schedule, effectively giving all control to the community. Their proposal process includes several stages to make sure that only the proposals with some support rise to the top (to avoid overload) and that passing each stage requires the proposal to be more flushed out and ready for implementation. One resent proposal is to extend a grant to an interest swaps platform that is complementary to Uniswap and that has pledged 1% of their future token to Uniswap (thus giving equity to UNI holders) — this way, UNI holders are voting on using their treasury to potentially reward themselves in the future.
Speaking of the Treasury: in a DAO, you control it! With the funds filling up the Treasury, DAO members can vote on how to deploy them. The vote could decide to spend part of the Treasury on a buyback, on a farming program, on marketing, etc. This is finally that system where the community decides on distributions and determines how the DAO will evolve in very real, monetary terms.
Any platform that deals with finance can run into a situation where a decision needs to be made on whether to open up the treasury to fix an unexpected outcome. For example, the DeFi lending/borrowing platform, Compound Finance, saw a number of its users’ positions liquidated when the stavlecoin DAI suddenly went far above the $1 peg to $1.30 on Coinbase. They could’ve said “too bad,” blame Coinbase, and move on. But being a DAO, the community put forth a proposal to compensate those liquidated by this anomaly. The proposal succeeded and was executed, giving the community continued trust in Compound and its governance.
Soon, we will post the details of our own DAO so you can see your specific benefits. Of course, it’s just the starting point since you, as a DEXE holder, will decide the future of the DAO and of your benefits in it. We trust it’s in good hands.
Dexe.network is an ecosystem of tools that bring professional trading to DeFi and DeFi to trading with free tools like Wallet Info and Wallet-to-WalletCopying, services such as 111PG and the Kattana Terminal, and more components that complement each other and solve pressing market needs. At the core is a decentralized social trading platform that operates via autonomous smart contracts and includes tools for virtual currency allocation and automatic rebalancing. It eliminates the risks of transferring digital wallet details such as private keys and API or any virtual currency data to a third party. Most importantly, the DeXe Network connects successful traders and followers in a transparent, verifiable way for the benefit of both groups.