ZooDAO: Fairness by Design
Fairness is an easy claim to make, but a challenging one to deliver upon. When we started building the foundation supporting ZooDAO, we encountered the challenge of embedding fairness at multiple stages. The team critically examined what fairness actually means — is it fairness of outcome? or fairness of opportunity? Which creates a more equitable playing field for users?
We firmly believe in fairness of opportunity — the principle that users should be able to interact within the ZooDAO ecosystem on equal terms, with a level playing field.
Fairness is so critical to our mission, that it’s one of our core values. It’s embedded in all aspects of ZooDAO, manifested in three layers of ZooDAO’s infrastructure.
Layer 1: The DAO
ZooDAO is a Decentralized Autonomous Organization, enabling users who hold $ZOO to take an active role in deciding its future. This means that no single user has the ability to unilaterally manipulate the project, its token or its mechanics. Decision-making of the project is handed to the users, who may propose changes to the project through the DAO and secure tho votes of the community to execute these changes.
This is where Aragon comes in.
Building a product that involves exchange of assets requires a great deal of trust in the people you’re working with. Creating the environment in which trust is foundational requires transparency, and the ability to trace decisions to a source. With a DAO, membership comes with the privilege of taking part in these decisions, with openness and accountability embedded. Building the infrastructure for a DAO from scratch leaves room for human handling and intervention, which is why we immediately turned to Aragon as our solution to create an environment of trust, transparency and accountability.
Aragon’s robust infrastructure enables us to attract and incentivize contributors, pool funds, and govern those funds collaboratively with full engagement of our community. We’re fully confident in Aragon’s capability to support our global, distributed community, free of intermediaries and meet our users’ demands for accountability. As a third-party provider, they also hold the ZooDAO team accountable.
With fairness built into the foundation of ZooDAO through our structure, we’re confident that the community will make the best decisions for the future of the project.
Layer 2: Battle Mechanics
The key feature of ZooDAO’s platform is the ability for users to generate additional value from their NFTs by staking them in our dApp, and engaging those NFTs in Battles. Fairness is built into the structure of NFT Battles at multiple stages, guaranteeing equal opportunity for users to win, and earn rewards at every stage.
In Stage 1 of battles, NFT holders stake their NFTs in the Battle Arena. Any activity on the blockchain requires verification — and as such gas fees to compensate those executing the transaction. While this is a necessary step in the act of staking an NFT, it generates a cost to the NFT holder. To ensure NFT holders are not being unfairly disadvantaged, ZooDAO compensates gas fees, depositing $ZOO in NFT holders wallets upon staking. Similarly, in Stage 2, NFT voters are also compensated for gas fees with $ZOO tokens.
During Stage 2, the community casts their first votes by staking $DAI in favour of their chosen NFT. During this 7 day period, not every vote is equal — and for good reason. We’ve seen the negative effects of last-minute sniping in other products, when a whale arrives at the last minute and through sheer volume disrupts the balance in their favour. To avoid this, votes cast in days 1–2 of voting are over-valued with a 1.3x multiplier, and votes in the last two days of voting are under-valued with a 0.7x multiplier. In all, this generates a more equitable playing field for all users and maintains the balance of opportunity to win.
In Stage 3, NFTs are paired for battle randomly — with no user or team member capable of altering the pairing of NFTs to influence the battle result.
In Stage 4, the battle begins with a transparent accounting of the balance of votes. At this point, users holding $ZOO can further influence the outcome of the battle, by staking $ZOO in favour of their chosen NFT. This voting boost follows the same principle of diminishing weight applied to votes, and ensures that no single player, even those with significant holdings of $ZOO may excessively influence the outcome of the battle.
Finally, in Stage 5, the votes are tallied to determine the number of chances each NFT has to emerge as victor in the battle. Most importantly, NFT Battles are not a winner-takes-all event. Having the highest number of votes after the two rounds of voting is not the decisive factor in winning the battle.
The number of votes aggregated simply determines the odds (the relative probability) of each NFT winning.
The aggregated votes are submitted in Chainlink’s Verifiable Random Function (VRF) generator, with the winner decided based on the relative odds.
Integrating Chainlink’s VRF is the most transparent, fair method with which to identify the winner of battles. The solution is provably fair, and a verifiable source of randomness with full integration to smart contracts. As a tamper-proof method of true randomness, it safeguards the outcome of NFT Battles and ensures that no single player, or the DAO may influence the outcome.
Layer 3: Rewards
Rewards generated through ZooDAO’s dApp are equitably distributed throughout the community members participating in battles, and contribute towards funding the sustainability of ZooDAO’s mechanics. The exact breakdown of how rewards are distributed is openly available, and subject to change only through a proposal submitted to the DAO.
Battles are no-loss, a distinction which is critical to ZooDAO’s identity. Battles were developed to ensure no user would leave with less than they arrived with, and the team hopes to maintain this model as long as sustainable and acceptable to members of the DAO.
Fairness is an inclusive call to action.
As we continue to build ZooDAO, and participate in its success, we hope the community will actively participate in maintaining and promoting the fairness mechanisms we’ve worked hard to build.
We’ve worked exceptionally hard to ensure that our model defends the ability of the community to succeed with ZooDAO, and hope our users will uphold the same values in their governance of the platform.
Updated January 9, 2022