DAO Experiment v0.2

It’s time for the second HOPR DAO experiment! Last time the DAO voted on providing liquidity, and we saw one of the highest governance participation rates in the whole of crypto. This time we’re interested in the community’s opinion of how to spend almost $300k controlled by the DAO. We’ll be using the same system as last time: a three-stage process which is designed to generate strong proposals and provide a fair balance of power between small and large token holdings.

The discussion phase will begin on Tuesday October 12th at 2pm CET. The vote will begin a little under a week later, on Monday October 18th at 1pm CET. Like last time, the discussion and referendum phases will be hosted on the HOPR forum, while the vote will be handled using Snapshot.

There will also be incentives: DAO participants will each receive a HOPR Boost NFT, and there are up to 50,000 HOPR tokens to be given out as well.

If you didn’t participate in the last experiment, or you need a reminder of what happened, you can read more about it here.

Process

As a Swiss project, the HOPR DAO broadly mimics the processes of Swiss semi-direct democracy. Participants discuss the chosen issue and make proposals for how to address it. People then gather signatures for their proposals, and the ones which receive enough signatures are put to a vote of all HOPR token holders.

This time we’re doing things a little differently. There will be two related topics: one will have the full three-phase process, while the other will just have a vote. This will allow us to draw some comparisons between the full system — which is thorough but slow — and a truncated version which will be faster but may lose some nuance along the way.

We’ll be posting full explanations of each phase as it begins, so make sure you subscribe to this Medium channel and follow the announcements on Telegram.

Topic(s)

The topic for this DAO session will be: “How should the fees generated from the Balancer Liquidity Pool and the Uniswap v2 pool be used?”

In total, between the launch and the switch to Uni v3 after the last DAO experiment, the DAO accrued just under 500,000 HOPR tokens and around 170,000 DAI in fees. That’s around $300k at current prices!

We’re going to ask about each currency separately, with a slightly different format for each. We’re doing this for two reasons: first, we’d like to experiment with different approaches to asking questions; second, it feels like there are more constraints on how to use HOPR tokens (which we’d really like to keep within the HOPR ecosystem to avoid downward price pressure) and DAI (which can in theory be spent much more freely, although more on that later).

HOPR Token Vote

For the HOPR tokens, the HOPR Association will present around half a dozen different proposals on how we think the funds should be spent. You’ll be able to discuss these proposals in the forum, but the only formal governance phase will be the vote: everyone will vote on their favourite proposal(s), and the budget will be split among the top four in an allocation of 40% / 30% / 20% / 10% (the two least popular options will not be funded by the DAO).

DAI Vote

For the DAI portion of the funds, we’ll be making things much more open: we want your ideas on how best to spend the DAI to benefit the HOPR project and the HOPR ecosystem. All ideas are welcome (although the moderators will delete any proposals which are impossible to implement or outright illegal).

This part of the process will involve the full three-stage HOPR governance system: discussion, referendum and then vote. Unlike the vote on how to spend the HOPR tokens, the results of the DAI part of the vote will be considered advisory. That might be a little disappointing, so it’s worth taking some time to explain the reasoning behind the decision.

We’re doing it this way to ensure we can gather your ideas without constraining your imaginations. We want to put everything on the table, but it’s not feasible to get a full legal opinion on what is and isn’t possible in advance. DAOs are a rapidly evolving concept without full acceptance in law, so it’s surprising what is and isn’t possible. And as we discovered last time, having to pause the discussion while we frantically try to work out which proposals are feasible just doesn’t make for a smooth process (let alone the disruption it causes to all the HOPR Association’s other ongoing work). This method lets us have a wider range of proposals without getting too bogged down in implementation details.

Don’t worry, though: we plan to quickly follow up this advisory vote with a binding one where the proposals are more fully defined, accurately costed, and we have the full approval of our legal team to move forward.

Timeline

• Discussion (12–18 Oct) Participants discuss the topic and make proposals. Using the “like” function on the forum indicates appreciation for a post in the discussion and also counts as a formal signature on proposal posts. Likes are also used as part of the incentive payout calculation (see below).
• Referendum (18–19 Oct) Proposals which gather enough support during the discussion phase move to the referendum phase. Discussion is closed at this point, but everyone is invited to sign proposals they think are worthy of passing to the vote, even if they didn’t participate in Phase 1. The proposals which get enough signatures move forward to phase three.
• Vote (19–21 Oct) All HOPR token holders and stakers vote on their preferred proposals for both the HOPR token and DAI votes.

All phases begin at 2 pm. The Discussion and Referendum phases will end at noon, to allow two hours to set up the next phase. The Vote phase will end at 2 pm. All times are CET.

Incentives

As before, there will be incentives for participating in the Discussion and Referendum phases. There are 50,000 HOPR tokens available to reward constructive discussion and proposals. In addition, “DAO Participant” NFTs will be issued to participants, with a Diamond NFT giving a 10% APR boost in our staking program.

The votes will not be incentivized with tokens, although everyone who votes will be eligible for a Bronze “DAO Participant” NFT.

The DAO experiment will start in earnest next week, but you can already start thinking about what would most benefit the HOPR community and ecosystem. We’re excited to hear your ideas!

Rik Krieger
HOPR Co-Founder

Website: https://www.hoprnet.org
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Forum: https://forum.hoprnet.org