DeFi Money Market (DMM): DMG Governance Token Public Sale

We at the DeFi Money Market Foundation, backed by billionaire Tim Draper’s venture firm Draper Goren Holm, are initiating the first public sale of the DMG governance token which will be used to oversee and direct the DeFi Money Market (DMM) DAO. DMM is a protocol that brings revenue-generating real world assets onto the Ethereum blockchain and into the DeFi ecosystem. The DMG public sale is being launched as an Initial DEX Offering (IDO) in order to enable broad and permissionless access for anyone with just an Ethereum address and an internet connection. The sale is opening today, June 22nd, and will run for one month or until all the allocated tokens have been sold.

The DMG governance token public sale is now live on two decentralized exchanges, dmg.defimoneymarket.com and mesa.eth.link. Below is more info on the token sale, distribution, revenue model, and an overview of the role DMG plays overall in the DMM Ecosystem.

What is the DMG Token?

The DMG governance token is the tool through which the community governs and grows the DMM ecosystem and the underlying protocol. As we look to build a vibrant global community, DMG is a critical component that will engender broad participation and mitigate centralized governance risk. Specifically, DMG effectuates governance of the ecosystem via the DMM DAO, which will have control over the Ethereum smart contracts and its adjacent assets.

Ownership of DMG represents the right to govern the parameters of the DMM Protocol as well as governance over the ability and decisions surrounding the introduction of new assets to the ecosystem in regards to both asset type and asset location. Additionally the decentralized community governing the DMM DAO can vote to modify the DMG tokenomics and utility, which could include a claim on the excess revenue generated from within the DMM ecosystem. The DMG token is a fork of Compound’s COMP governance token (featuring native delegation and vote weighting) with added capability such as meta-transaction support and a native burn function.

More information on the DMG token and how DMM’s governance structure will operate can be found in our previous blog post here.

DMG Sale Structure

The DMM DAO will be composed of a total of 250,000,000 DMG Governance Tokens (ERC20 tokens on Ethereum). This initial crowdsale (comprising both private and public) is capped at 25,000,000 DMG accounting for 10% of the total supply.

The DMG governance token sale is what we are referring to as a Initial DEX Offering (IDO) and has been structured as a quasi-bonding curve. To achieve this effect, limit sell orders have been placed in blocks of 83,333 DMG per trading pair (ETH, USDC, & DAI) per DEX. Each successive block in a trading pair increases 1.5% in price from the previous block to enable gradual and organic price discovery to occur as DMG is purchased over time.

The DMG private sale previously ran with three blocks at a time (one for each trading pair) for a total of 250k tokens per price tier. There was a hard cap of $2M and was made available to select investors and early contributors. It began at a starting price of $0.16 and sold out reaching the hard cap in just over a week. In total, 9.3M DMG was sold and ended at a price of $0.29 per token.

The public sale is beginning at a starting price of $0.36, which is a 25% premium from where the private sale left off. There are a total of 15.7M DMG tokens available for purchase and will end at a price of approximately $0.57, although it may end up being slighter higher or lower due to how the sale is structured across multiple pairs. The public sale has been set up to run with six blocks at a time (3 trading pairs x 2 DEXs) for a total of 500k DMG per price tier where every successive block increases 1.5% in price. This in effect creates a similar effect to a bonding curve.

The DMG public sale is now open on two seperate DEXs, directly purchasable with ETH, USDC, and DAI. The first sale location is dmg.defimoneymarket.com which is powered by Dolomite (an orderbook DEX using the Loopring protocol) with a frontend forked from Uniswap v1. The second sale location ongoing at the same time is mesa.eth.link which is powered by the Gnosis Protocol (a ring-trade DEX) with a frontend governed by the DXdao.

The public sale will be available from today through July 22nd or until all tokens available have been sold. The dmg.defimoneymarket.com site has an identical user experience as Uniswap and operates using market orders, while Mesa operates using limit orders. A walkthrough guide on how to deposit funds and purchase DMG through Mesa can be found here. Both of the exchanges being used for this sale have unique protections against frontrunning to ensure “gas war” issues will be greatly reduced to nearly non-existent.

It’s important to note when you are placing a limit buy order on Mesa, enter your desired price into the correct box as shown below.

Below are some visual examples of how the bonding curve will operate for each trading pair with each data point being a block of 83,333 DMG. Once the maximum amount of tokens have been sold for the public sale as a whole (accounting for each trading pair), all limit sell orders will be pulled and the sale will have completed.

After the public sale completes, we will be using 10% of the funds raised to help bootstrap liquidity for DMG on DEXs including but not limited to Uniswap and Dolomite. This creates secondary markets for DMG to enable users to exchange in and out of DMG without incurring a large amount of slippage. This will slightly raise the circulating supply, but we are working with CoinGecko to ensure there is maximum transparency on the token supply.

Use of Funds

The focused development of the protocol and the ecosystem are top priorities. To this end, funds raised will be used for protocol development, marketing, grants, business development, funding loans for the introduction of additional asset classes into the ecosystem, operations, seeding the secondary market on Ethereum DEXs, legal, reserves and other general corporate purposes. As a developing ecosystem, the proposed use of funds is subject to change based on new challenges and opportunities identified as the ecosystem matures. Additionally the DAO will have a large say in where tokens can be best allocated to grow the DMM ecosystem.

DMG Supply Distribution

The distribution of the total DMG supply is as follows:

• 30% will be sold in multiple different Public Token Sales over time.
• 30% will be reserved to incentivize ecosystem developers, partners, and integrations with other protocols to ensure DMM is a vibrant growing and decentralized ecosystem.
• 40% will go to the DMM Foundation for continued development, support, and other general corporate purposes.

60% of the total supply (150M DMG) has been deposited into timelocked smart contracts with varying vesting periods. The addresses and Etherscan links for these contracts can be found on our main GitHub page here. The Foundation’s 40% allocation of the supply (100M DMG) is completely locked up until November 15th, 2020 which then begins to vest equal amounts of DMG every Ethereum block until a year later on November 15th, 2021 when the last amount unlocks. 10% of the supply (25M DMG) from the incentives allocation and 10% of supply (25M DMG) from the sales allocation are both locked until November 15th 2020 when the full amount releases.

Once unlocked, these DMG funds can be used to grow the ecosystem and/or can be deposited partially or completely back into another timelocked smart contract for a longer period of time. These contracts will greatly reduce the liquid supply of DMG and will additionally limit the DMM Foundation’s voting power to ensure the community has a greater say in the DMM DAO, increasing the decentralization of the DMM protocol.

In summary, after the successful completion of the sale, 10% of the total supply will be in the hands of users, 40% of the total supply (100M DMG) will be liquid (not locked up), while the other 60% of the total supply (150M DMG) has already been deposited into in timelocked smart contracts. The chart below, created by community member FergLy, gives a good overview of the token distribution and how the Public sale has been designed to operate.

From this token sale, the DMM DAO will have begun the process of continual decentralization to ensure the DMM protocol is maximally censorship-resistance and ensure support as more revenue generating real world assets get brought on-chain and into the DeFi ecosystem. This is a unique time in history, and we are more than excited to have you along for this journey. More information on the DMG governance token and how it will be used within the DMM DAO can be found here.

About DMM

DeFi Money Market (DMM) is an ecosystem built on the Ethereum blockchain that bridges interest-generating real world assets into the Decentralized Finance (DeFi) ecosystem in a transparent, trust-minimized, overcollateralized, and permissionless manner.

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