A fair governance protocol. ElasticDAO balances different participants’ competing interests by reducing the overall influence of money and early adopters.
The problem: A decentralized world that tends to centralize its governance.
The value locked in the space has increased rapidly from $650M in January 2020 to $28.5B at the time of writing (here). Some of the most notable projects have collectively assembled billions of dollars worth of assets.
As DeFi's value inflates, the need to solve challenges such as the free-rider problem becomes more urgent. Based on the latest DeepDAO report, several of the top DAOs see participation rates of less than 10%.
Many people enter the space to get passively rich, without caring about the community or the DAO’s future, intensifying the importance of building tools that encourage people to take action.
We believe that a fair governance protocol is the solution.
Motivating people to vote and have an active role in the community increases their sense of responsibility and collectivism, impacting how they interact within organizations.
How ElasticDAO improves governance
ElasticDAO is the first fair governance protocol. Our approach attempts to balance the competing interests of different stakeholders within each organization.
The project creates a balanced environment where dev teams can build and govern organizations together with the community, without whale wars — transforming DeFi from a battle arena into a fair, accessible ecosystem, operating under the principles of collectivity and collaboration. Voters are incentivized to take positive actions that benefit the organization and its members. Active participants are rewarded while bad actors are penalized if their inaction leads to an inability to reach quorum.
Elastic Governance Token
The first DAO deployed on the Elastic DAO protocol is named ElasticDAO. It is governed by EGT, the first elastic governance token. Elastic governance tokens combine positive rebasing with a bonding curve to ensure that the primary beneficiaries of a DAO's success are its members.
When an Elastic DAO's token is in high demand, the value backing each token increases. With every expansion of the total supply, all current participants receive more tokens via positive rebasing.
Anyone who does work for the DAO (voting, coding, marketing, designing, etc), which forwards its goals, is rewarded through the minting of new EGT. This decreases the backing value of each EGT, making it cheaper for new members to enter ElasticDAO, and contributing to further decentralization.
EGT tokens are always redeemable for their underlying value without additional costs or negative rebasing. This mechanism encourages contributors to redeem payments for ETH at a convenient time for them. Redemption (exiting) has no negative impact on the value of EGT.
How does an Elastic DAO's governance work?
Elastic DAOs operate under a fair governance system which limits large wallets' influence. Members vote with their governance tokens up to the maximum voting power. This maximum is controlled by each DAO and applies to all wallets, regardless of their position. Core team members, whales, VCs even your mom (if she holds tokens) are treated exactly the same.
Members who participate in governance get rewarded for their activity based on their voting power.
Free riders are penalized, but only when a proposal doesn't reach quorum.
Our first voting module uses Snapshot to reach consensus, avoiding high gas fees. The token holders submit and vote on proposals with the DAO's elastic governance token, giving full control of the organization to its community.
The Jellies behind ElasticDAO
The protocol was created by a team of DeFi natives and will be community-owned from the moment it launches.
The core team has extensive experience in major decentralized projects, including PieDAO, MetaGame, Sushiswap, NFTX, Alchemix, and ESD.
The principle of decentralization drives the core team. Our vision is to create fair communities, where money doesn’t buy influence.
What's next?
Currently, ElasticDAO's contracts are under review in a coding contest, run by Code 423n4. We will announce the exact launch date shortly with a blog post explaining everything that you need to know to get involved.
Meanwhile, we invite you to join our mission to realize fair governance. Kick start conversations, provide your opinion, and introduce yourself as part of ElasticDAO’s community by joining us on Discord.
Join our Discord
Follow us on Twitter
Check out the ElasticDAO docs
Check our code on Github
