Proposal Announcement: Project Ragnarok (Integrating a dissolution mechanism for DigixDAO)
What is DigixDAO and its stated objective?
DigixDAO is a platform created to encourage the growth of projects and ecosystems around the Digix gold token (DGX) by leveraging the DGD community. DGD token holders are rewarded in DGX depending on their level of participation in the current Quarter of governance. Proposers who participate in the vision of building use cases for DGX would be able to submit Projects on DigixDAO to obtain funding to do so. More information can be seen at https://community.digix.global
Digix has successfully created and launched DGX in 2018 and the DigixDAO platform in March 2019. To date, there have been over 50 Projects submitted on DigixDAO to grow the DGX ecosystem, all of which are aimed at spurring demand for DGX. Some examples include Projects related to marketing, community management, uniswap liquidity projects, exchange integration, and on ramp off ramp projects. We at Digix would like to take this opportunity to thank everyone who participated in DigixDAO so far.
DigixDAO currently holds approximately 386,000 ETH to continue funding Projects to build up the DGX ecosystem. For those interested in submitting Projects, please head over to https://medium.com/digix/tagged/dao for more information.
Why introduce a dissolution mechanism to DigixDAO?
Since the launch of DigixDAO, we have received a mix of positive and negative feedback from those who participated in DigixDAO. Among all the feedback we received, one recurring comment was for a mechanism for dissatisfied DGD token holders to make a clean break from DigixDAO. Although transferring ownership of DGDs has always been an option, other suggestions were put forward, ranging from a smart contract to allow DGD token holders to ‘burn’ their DGD in return for a proportion of ETH in DigixDAO, and even a call for a full dissolution of DigixDAO. We understand that participation in DigixDAO platform may not be for everyone, especially for those who cannot put aside time to actively vote and create Projects on DigixDAO.
We have taken this feedback seriously and after deliberating possible solutions with the team, we are proposing to introduce a dissolution mechanism to DigixDAO at the start of every quarter of governance. In short, at the start of each DigixDAO Quarter, DGD token holders will be given the option of dissolution through a vote. Depending on the result of the vote, DigixDAO will either dissolve at the end of the current Quarter or continue for an additional Quarter.
We hope that with the dissolution mechanism in place, DGD token holders who still believe in the vision of DigixDAO would step forward not only to vote against dissolution, but create positive ecosystem projects that will alter the opinion of those in favor of it. However, if the dissolution vote passes, it will allow all DGD token holders to dissociate themselves from DigixDAO in the fairest manner possible.
How will dissolution work?
As mentioned above, Digix will create a Project to call for a dissolution at the start of every DigixDAO Quarter. The Project will be created with only 1 milestone and will have to go through the usual voting stages, which consist of Moderator Endorsement, Moderator Voting and Participant Voting.
The funding requested through the dissolution shall be for all of the current ETH in DigixDAO. Funding is requested only to trigger the Quota and Quorum requirements built into DigixDAO and will be refunded to DigixDAO in the event of a failed dissolution vote.
If the dissolution vote passes, the current Quarter will be the final DigixDAO Quarter and DigixDAO will cease after the Locking Phase of the subsequent Quarter. Only Projects which pass their respective voting requirements in the current Quarter will continue to be funded. After unlocking their DGD from DigixDAO, DGD token holders will be able to claim a pro-rated portion of remaining ETH in DigixDAO depending on the amount of DGD they hold. The amount of ETH available for claim would be taken as at the end of the current DigixDAO Quarter. The claiming process will likely be through a smart contract which we will make available in due course.
If the dissolution vote fails, DigixDAO will continue for an additional Quarter and DGD token holders will be able to vote on dissolution again at the start of the subsequent Quarter.
This announcement is not an announcement of a dissolution, but rather an invitation to the Digix community to provide any input they might have on the proposed dissolution mechanism. Do note that elements may change in its implementation until it is finalized on the DigixDAO platform. After all, DigixDAO was built for DGD token holders and DGD token holders should have a say on the continuity and direction of DigixDAO.
Digix’s stance on dissolution
We would like to make our position clear that Digix is against the dissolution. DigixDAO has enabled DGX to grow in ways that were only possible with the help from the DigixDAO community members. There were several Projects that have been successfully funded and on track to receive funding that has aided in building up the brand awareness for the product and can be seen at https://community.digix.global
Due to our bias against dissolution, Digix will abstain from voting on any dissolution Project on DigixDAO. However, we will respect and adhere to the collective opinion DGD holders based on the result of each dissolution vote.
Will DGX and Digix remain if the dissolution proposal passes?
Yes. DigixDAO is a platform created by Digix, and the core business of asset tokenization and the DGX gold tokens will remain even if dissolution occurs.
What will only deprecate is a platform that can fund volunteer projects around the Digix ecosystem via DigixDAO.
If this proposal passes, DGD holders will be entitled to a pro-rated redistribution of the remaining ETH in DigixDAO.
DGD holders are able to exit DigixDAO with a pro rate refund of the ETH remaining within the DigixDAO platform.
Can other projects be submitted while this proposal is in place?
Absolutely! For anyone interested in submitting ideas or projects to scale the DGX ecosystem, they are welcomed to do so. This is an introduction of a dissolution mechanism to increase the autonomy of DGD holders, not a mandate. Please visit https://medium.com/digix/tagged/dao if you have an interest in submitting a proposal. Project Ragnarok is one of several projects that would be available for voting on the governance platform in every quarter. It is a feature improvement on the platform, and DGD holders can continue to exercise their rights to vote on various other projects.
What is the course of action if Project Raganarok passes?
- All DGDs will be unstaked in the start of the proceeding Digix quarter (end of Day 90 of any current quarter)
- All ETH from DigixDAO will be transferred to a DigixDAO Refund Contract
- DGD holders will need to submit two transactions on the Ethereum blockchain (that can be done on MyEtherWallet) to suicide their DGDs for the withdrawal of the Pro Rated distribution of Eth from DigixDAO
- All projects that are currently funded or have unfunded milestones on the DigixDAO platform will cease to be funded
- There will no longer be any further Quarters on the DigixDAO platform
- There will no longer be any utility for DGDs
- There will no longer be any transaction fees that will be rewarded to DGD holders in the governance platform as it will cease to exist
*In the coming days, this proposal will be submitted as a draft on the DigixDAO platform, and will be open for voting in the next governance quarter of DigixDAO. The proposal will not be able to be voted upon until Day 11 of the next quarter.*