DAO Experiment v0.4

It’s time for the fourth in our series of HOPR DAO experiments! This time we’re trialling a streamlined two-phase DAO process: the HOPR Association will present draft proposals for discussion on our forum, which will then be revised for a vote among all HOPR token holders.

The Topic

Which of the following proposals to redistribute the DAO’s liquidity should be adopted?

We’ll be asking a series of yes/no questions related to moving some of the DAO-controlled liquidity from its HOPR-DAI pool on Uniswap to different DEXs on Gnosis Chain or to a HOPR-ETH pool on Uniswap. The proposals are not mutually exclusive — it will be possible for the DAO to execute all, none, or any combination of them.

The Background

The HOPR DAO’s liquidity pool is one of the deepest in crypto. At the time of writing it contains 68.2m HOPR and 4.7m DAI. Almost all of this is controlled by the HOPR DAO. These funds were raised during the HOPR token’s launch in February 2021 and 100% of the funds were moved to a Uniswap pool — none of the funds were allocated to the HOPR Association or HOPR team.

In our first DAO experiment back in May 2021 the DAO voted to keep these funds entirely on Uniswap, but transition them to the recently launched Uni v3.

Gnosis Chain Proposals

But that was a long time ago. In the intervening months HOPR has developed a much closer relationship with Gnosis Chain — we have a close relationship with the Gnosis Chain founders and team; it’s where our staking program and HOPR Boost NFTs live; of the major non-Ethereum EVM chains, the Gnosis Chain values match most closely with our own; it’s a preferred ecosystem for our community because of the cheaper gas fees.

To build on this foundation, we think it makes sense to move some of the DAO’s liquidity to Gnosis Chain. But we need to decide how much and to which DEXs. We have three proposals for consideration, based on conversations with DEXs.

ETH–DAI proposal

Another major change since launch is that crypto has firmly entered a bear market.

There was a certain amount of criticism after the launch for our choice of HOPR-DAI as a liquidity pairing rather than HOPR-ETH. Having HOPR paired with a stable coin has certainly contributed to stability: during the recent downturn HOPR has outperformed most other coins thanks to this choice of pairing and the amount of liquidity provided by the DAO.

But there’s also an argument for having HOPR paired with non-correlated tokens. Opening up arbitrage opportunities would encourage trading and increase DAO fees. It would also help HOPR rise up the ranks of most traded tokens.

There’s also the possibility that HOPR could benefit from a future recovery in the price of ETH, piggybacking on an upswing in a way that would be impossible if HOPR remains solely pegged to DAI. Of course, the price of ETH might not go up, and impermanent loss means the DAO would not necessarily directly benefit from this. We hope these questions and more will be hotly discussed on our forum over the next few days.

The Process

As with every other HOPR DAO experiment, we’re going to be slightly changing the format to see how it affects the governance process. We’re trying to strike a balance between accessibility, depth of discussion, clarity of proposals and effectiveness of results.

This time there will be just two phases: Discussion and Vote. The HOPR Association will present some draft proposals at the beginning of the discussion. There will then be a 72hr window to discuss the proposals, after which the HOPR Association will finalize the proposals based on the community’s input. These finalized proposals will then be put to a vote on our Snapshot page.

The vote will last for 48 hours and votes will be counted quadratically. If you need a primer on quadratic voting, check out our quadratic voting games which we ran back in May this year.

Timeline

• Phase 1 (Discussion) 17:00 Tuesday July 5th to 14:00 Friday July 8th on the HOPR forum
• Transition (Proposals finalized) 14:00 Friday July 8th to 17:00 Friday July 8th
• Phase 2 (Vote) 17:00 Friday July 8th to 17:00 Sunday July 10th on Snapshot

All times are CEST.

Rewards

Since we’re not running the full DAO process we won’t be employing our standard DAO incentive scheme, which relies on a series of data plugins tailored to the three-phase process on our forum. Instead, we’ll be issuing NFTs for participation across the two phases.

NFTs will be issued according to the following system:

• Bronze: For anyone who participates in the vote phase
• Silver: For anyone who participates in the discussion phase only
• Gold: For anyone who participates in both phases
• Diamond: For the top 5 contributors to the discussion phase, as determined by the forum moderators

Discussion participation will be assessed by the moderators and using the “active participant” forum data plugin. Earning an NFT requires active, constructive participation. Low-quality posts will be ignored and repeated spamming will result in being restricted from the forum. We usually have very high levels of participation with low numbers of Sybils, so we don’t expect to need to enforce this, but it’s important to state the rules up front.

These DAO experiments are one of the most important and exciting parts of the HOPR project. We look forward to getting your input over the course of the week. Head to the forum to get started, and set a reminder to vote at the weekend!

Sebastian Bürgel,
HOPR Founder

Website: https://www.hoprnet.org
Testnet: https://network.hoprnet.org
Twitter: https://twitter.com/hoprnet
Telegram: https://t.me/hoprnet
Discord: https://discord.gg/dEAWC4G
LinkedIn: https://www.linkedin.com/company/hoprnet
Forum: https://forum.hoprnet.org
Github: https://github.com/hoprnet