Symmetric Governance

9 min readJul 3, 2021

This post gives an overview of governance for Symmetric. It explains how it is structured to protect and align stakeholder interests, without compromising on transparency and decentralisation . It outlines how the community can participate in governance and shape the future of Symmetric by voting on proposals through the Symmetric DAO. It also includes information on how to join the Symmetric DAO on DAOhaus — why the DAOhaus platform was chosen, how it works and the types of proposals it supports.

What is Symmetric?

Symmetric is an AMM that enables the decentralised exchange of digital assets using liquidity pools on the Celo & xDAI network (coming soon to others). In traditional finance, centralised exchanges use an order book to match buyers and sellers — in contrast, DeFi’s Automated Market Makers (AMMs) execute token swaps in a decentralised, transparent and permission-less way.

Symmetric DEX - An AMM for xDai, Celo & Polygon

The Symmetric tokenomics model issues SYMM coins as a bonus reward to stakeholders bringing value to the Symmetric…

symmetric.finance

Governance overview

We believe that the success of Symmetric depends on the level of professionalism, transparency and quality of experience the Symmetric DAO and the operations team provide to stakeholders. Along with a fair distribution of rewards and recognition — as well as through broadly distributed and decentralised control, accruing to stakeholders and those adding value to the Symmetric ecosystem.

Move to decentralised governance

As DAOs come under increased scrutiny and criticism for not being decentralised enough and letting control accrue to a small group — Symmetric has been designed to progressively shift control to a decentralised state and group of stakeholders through issuance of the governance token.

The DAO must protect & represent all stakeholder interests across the ecosystem and the operations team should not be the sole financial beneficiary or unilaterally control decision making. To achieve this, Symmetric will operate a DAO that gives decision making rights and rewards to those adding value to the ecosystem, through liquidity mining or active participation in the community. Thereby, ensuring control represents all stakeholder interests and remains decentralised.

Symmetric DAO

The Symmetric DAO is responsible for decision making for the Symmetric ecosystem. Those with a direct interest in the future roadmap and strategic decision-making can acquire voting rights in the DAO, including members of the community, operations team or liquidity providers.

Holding one or more voting shares is sufficient to sponsor proposals, so the cost for getting a seat at the table is low. Voting shares can be acquired by anyone at an exchange rate of 1 SYMM coin for 1 voting share and the DAO treasury holds the SYMM coins exchanged for voting shares. The treasury only supports two types of digital assets: the SYMM coin & WXDAI (WXDAI is used for sponsoring proposals, but for membership the DAO only accepts the SYMM coin and issues voting shares against it).

The sole purpose of holding voting shares is to be able to sponsor proposals and take part in strategic and operations related voting. Assets held in the treasury can’t be spent or used, but anyone can return their voting shares anytime and reclaim their SYMM tokens, if they choose to liquidate their position or leave the DAO.

Guiding principles for DAO members

The Symmetric DAO will strive to maintain transparency, decentralisation & openness. For members of the DAO involved in decision making and governance the following section provides some guidance.

Maintain Professionalism, stay current on applicable laws, and show independence in decision making. DAO members must not engage in any illegal activity, misconduct or knowingly misrepresent information
Ensure best efforts to only whitelist quality projects and have clear channels to report scam projects or schemes. Promote best practices through security reviews, testing should be regular and enforced
All governance decision making should demonstrate integrity and transparency. Market manipulation or use of material non-public information to exploit others is prohibited
DAO members have a duty to all Symmetric users to show loyalty, diligence, fairness and impartiality — user interests should be above their own personal interests. Performance must be accurately presented and available (using blockchain where possible). Confidentiality of stakeholder data and information is to be maintained
DAO members have a duty of loyalty to the DAO and should hold themselves accountable & ensure clear lines of responsibility.
Objectivity should be maintained — all governance or code changes must show diligence and reasonable care. Communication with stakeholders must be timely, with records maintained and available
Conflicts of interest must be disclosed and priority of transactions maintained (no front-running). Any referral fee arrangements should also be disclosed to ensure users and stakeholders can make independent decisions.

Symmetric Risk Fund

The DAO is also responsible for administering the risk fund. The risk fund exists to provide additional protection to Symmetric users from losses incurred through no fault of their own (e.g. stemming from breaches in Symmetric or underlying assets that have been approved for trading on Symmetric).

Any coin can be traded on Symmetric but there is an approved list of coins that are included by default. This list will change over time as new coins are added by operations.

We believe that this fund should be independently administered and so the Symmetric DAO will handle approval of claims when they are made. Although, anyone can apply to join the DAO — for this function preference will initially be given to those with relevant skill sets. Membership would ideally consist of legal and financial experts willing and able to help evaluate claims AND in the future this may become a separate DAO to exclusively deal with the risk fund. It is important to note that this is not a legal insurance contract and Symmetric simply allocates a portion of the tokens mined each month to this fund, to provide a cushion to users.

Symmetric Community fund

The Symmetric community fund will be a separate DAO function responsible for administering the community fund. Members of the operations team can have no more than one voting share in this, which is enough for members of operations to sponsor proposals but not enough to significantly influence decision making.

The main reason behind the separation of DAO functions is to ensure that, *if members of the operations team leave or are removed and return their voting shares they are not rewarded from the community fund. This is important since operations has its own allocation and should not unfairly benefit from the community fund.

Anyone, including operations, can raise a proposal within the DAO, find a sponsor and then the community decides whether it gets approved. It’s expected that a significant number of proposals will be created, to access SYMM coins & provide funding to grow the Symmetric ecosystem.

Each week as new SYMM coins are created, the community allocation will be transferred to the Symmetric DAO. This should create a constant flow of new projects and opportunities. Although all DAO functions will initially be handled by the Symmetric DAO — we hope eventually this can also be spun out into its own separate DAO focused exclusively on the community fund.

Holding voting shares, gives corresponding ownership of the community bank and so there is a real financial incentive to exchange SYMM coins for voting shares. However, this incentive could have the adverse effect of shareholders not voting through good projects so as to accumulate more value in the bank. To mitigate this risk at least of half of newly injected coins each month must be invested into projects (or alternatively be transferred to the risk fund).

Table description: Allocation to community & risk

DAOhaus

Why DAOhaus

The DAO is hosted on the DAOhaus platform. We evaluated both Aragon and DAOhaus and found that each had its own unique properties and benefits. DAOhaus was chosen because:

It was more reliable during testing,
Is designed to work on xDai which lowers cost of governance to users
Received support from the early community

The Symmetric DAO has been deployed to xDai to keep costs low for anyone seeking to raise proposals or take part in the governance process. This is important, since it’s our fundamental belief that Symmetric should not be prohibitive due to cost. We strive to make Symmetric both technically and financially within reach — for everyone.

How DAOhaus works

The general process for engaging with the Symmetric DAO’s is as follows.

Anyone can raise a proposal for any of the Symmetric DAO functions
Once a proposal is raised, the proposal needs a sponsor with voting rights in the DAO to support it (each sponsor pays 10 WXDAI into the DAO’s bank). This ensures that proposals meet a level of quality and due diligence before going to DAO members to vote on. While it is possible for a DAO member with voting rights to raise a proposal and sponsor it — we endorse a separation of approval authority from proposal creation.
Once sponsored, the proposal enters a queue to ensure a pipeline of proposals and avoid being left unattended.
The proposal then has a limited time window for DAO members with voting rights to vote on. Each DAO function will define a suitable length of time which will then be applied to all proposals, within that category.
Once voting is completed, there is a 3-day grace period where DAO members who voted against the proposal can choose to sell some or all of their voting shares to the DAO. This protects DAO members who are strongly opposed to a proposal and wish to liquidate, before the proposal is actioned.
The outcome is then written to the blockchain and the proposal is actioned.

This process is orderly and fair and provides time frames to ensure everyone within the DAO with voting rights has time to vote.

In DAOhaus, each DAO has a bank, which holds digital assets for that DAO. Voting shares correspond to ownership of the bank’s assets. So if a person holds 10% of voting shares in a DAO then that person can at any time return up to 10% of their voting shares in exchange for up to 10% of the assets held in DAO bank.

A common use of DAOs for example, is for groups of people to come together and pool assets to make investments. They send their crypto to the DAO bank for in exchange for voting shares and are also able to leave the DAO and reclaim their share of the assets. A successful fund might grow significantly and any redemptions would proportionally reflect that.

How this feature of voting shares and the bank works with Symmetric depends on the specific DAO function, but it’s important to understand how DAOhaus treats voting shares and the bank, to understand how the DAO operates.

DAOhaus

DAOhaus is a no code platform for Moloch DAOs.

app.daohaus.club

Types of proposals in DAOhaus

DAOhaus breaks down proposal types into the following categories.

Membership — A proposal to be awarded a number of voting shares. Membership proposals can also include a tribute which is a payment in some supported digital asset to be exchanged for voting shares.
Funding — Tributing Spoils or Requesting funds from the DAO to work on internal projects and improvements
Token — Request to add support for a new ERC20 token to the bank
Trade — Request the DAO to swap one asset for another within the War Chest (War chest refers to the resources at the DAOs disposal)
GuildKick — Request to forcibly remove a malicious member through a vote
Minion — A contract that allows execution of arbitrary calls (i.e. swapping assets in the DAO bank)

Source: https://daohaus.club/docs/proposals

*Note: Operations will continue to review and update this blog to ensure stakeholders have access to the latest information and have clarity regarding the governance system, its policies and procedures.

Disclaimer: Symmetric advises all users and stakeholders to do their own research before participating in any swaps or pools. We strongly suggest users only add or swap liquidity, that they can afford to lose. The views expressed in this post are not financial advice.