Oracles are designed to provide an integral and essential part of the DeFi ecosystem infrastructure. This infrastructure is governed through a token — the DIA Governance Token — which shall be held by a decentralised community of DIA token-holders and their delegates.
DIA believes in a financial ecosystem that is owned, controlled, and maintained by its users. The DIA Association is distributing the DIA Governance Tokens through different mechanisms to meaningful stakeholders to accelerate decentralisation for the entire ecosystem. DIA Association is creating the DIA Ecosystem Token Pool to fund the different distribution mechanisms.
The allocation of tokens is divided in 5 main categories:
- The supply made available during the bonding curve distribution from August 03 through August 17,
- the ‘Ecosystem Token Pool’, which is explained in detail in another post,
- the tokens held by the team and advisors,
- early project backers.
- The remaining tokens are kept in the association reserve and will be put to use as decided by DIA Governance Token holders. The first specific allocation proposals are currently being fleshed out and will be described in a separate post on our Medium account.
Governance Token Distribution Mechanisms
DIA will start decentralising its governance through multiple governance distribution mechanisms including the bonding curve distribution, incentivising Governance Token usage and holding, and an ecosystem token pool reserved for innovative projects and governance participation.
1. Bonding Curve Distribution Mechanism
DIA will distribute the DIA Governance Token through a bonding curve distribution, starting on the 3rd of August 2020 at 02.00pm (CET) to key DeFi market participants and the broader DeFi and blockchain ecosystem.
Token Bonding Curves are sustainable, transparent and fair, as they effectively distribute governance, align interests between team and community, ensure accountability and incentivise early adopters, community development and usage of the governance token long-term.
2. Continuous Stakeholder Distribution Mechanism (CSDM)
DIA is setting crypto economic incentives for DeFi applications and its users to use and demand transparent oracles. DIA believes that a system which directly rewards the usage through economic incentives will drive adoption and result in a more sustainable ecosystem. CSDM is funded by the DIA Ecosystem Token Pool (more on the DIA Ecosystem Token Pool in an upcoming Medium article).
Distribution of DIA Governance Tokens through CSDM will be done through:
- Proof of Truth
Smart contracts using DIA oracles will receive DIA Governance Tokens on a daily basis. Distribution will be allocated based on the smart contract asset holdings. Daily token distribution will be allocated linearly to the top 100 smart contracts depending on their percentage of total assets of applications of the total contracts. A smart contract can only receive 15% of total daily distribution.
Proof of Truth Distribution will begin December 1, 2020. To qualify for distribution, smart contracts need to send a daily Proof of Truth transfer with the hashed DIA oracle price of the previous day. Claims from the pool of DIA Governance Tokens collected through Proof of Truth are required to be a minimum of 1 DIA. Details on technical implementation will be published on Github.
- Proof of Use
Applications that are built on smart contracts that qualify for Proof of Truth distribution can opt for a Proof of Use distribution for their users. All DIA Governance Tokens distributed through the Proof of Truth mechanism from DIA Governance Pool will be allocated to the end-users of the application. Application users can claim their DIA Governance Tokens from the Proof of Truth token allocation of the applications’ underlying smart contracts.
DIA Association is providing an open-source implementation to applications. Proof of Use smart contracts will be maintained by the proof of truth recipient, hence the application. Proof of Use will be tested in Q4 2020. Details on technical implementation will be published on DIA Github and in the participating DeFi applications’ technical documentation.
3. DIA Interest Allocation
DIA will implement an interest distribution function that will incentive the holding and distribution of the governance token. The provided yield can be used to create an optimal price and distribution function to reduce the DIA Association holding pool. Yield will be provided initially through our own open source smart contract and later on integrated in other lending solutions if applicable. Interest is initially funded by the DIA Ecosystem Token Pool. DIA Association anticipates that additional DeFi applications will provide yield for DIA Governance Token holders in the near future.
4. Stakeholder Participation Mechanism
DIA wants to encourage all stakeholders independent from size and economic ability to participate and earn governance tokens. The Stakeholder Participation Mechanism is funded by the DIA Ecosystem Token Pool.
- Funding data collection
Data seekers can put bounties on specific data needs. Data suppliers who build scrapers to source particular sets of data will be rewarded with a bounty upon completion of the work.
- Incentivising platform development
The DIA platform will be developed by its community and token holders. Any feature that is desirable can be suggested, voted on, funded and worked on by the DIA developer community.
Governance Token Functionalities
- Voting on governance issues
Any issue pertaining to the association and its platform that has severe implications will be put up for voting by means of the governance token. Any token holder can participate and cast their vote. In order to propose changes on the platform or its governance stakeholders require a holding of 1,000 tokens. Voting rights can be delegated to a stakeholder.
- Validating data through staking
DIA tokens can be staked to incentivise the validation of existing oracles, scrapers, methodologies and more.