HOPR DAO Experiment 1: DEX Liquidity Distribution
The HOPR DAO v0.1 officially launches today with our first governance experiment!
In coming up with a good topic for the next governance vote, it was important to pick a topic which the community is highly invested in and can have full control over the outcome.
For example, despite the many, many (MANY) calls of “Wen Binance?”, that’s not a suitable topic for this discussion. There’s no mechanism by which a DAO could negotiate with central exchanges or pay their exorbitant fees. And ultimately the decision to list or not lies with the exchange, so there’s no guarantee that any proposal could be implemented.
But the next most common request we get is to add liquidity to a whole host of decentralized exchanges, from PancakeSwap to HoneySwap to ones we’ve never even heard of! And this is a perfect candidate for community governance: it’s something the community wants, you will almost certainly make a better decision than we would on our own, and it really needs to be done.
So, without further ado, the May 2021 DAO Vote Topic is:
How should the funds in the Uniswap DAI-HOPR pool, which were placed there by the Genesis DAO after the HOPR launch, be distributed among decentralized exchanges?
The week-long discussion period is open immediately in the forum. Before you rush off, though, here are some brief context for the vote topic, what you might want to consider, and notes on what will make a valid proposal.
Some context: The original Genesis DAO vote only covered the launch procedure and didn’t give much thought to the medium term. This was fine, as it’s important that governance decisions be narrow to avoid becoming overwhelming. The original proposal did provide liquidity
The launch was a success, resulting in 17,955,067 DAI and 18,016,003 HOPR tokens in the Balancer pool. The Genesis DAO then transferred these funds to Uniswap, receiving 17,985,508 of UNI-V2 liquidity tokens in exchange. At the time of writing, these tokens are worth $26m, so there’s a lot at stake here.
This proved a very good decision after launch, but now it’s time to use those funds more effectively and efficiently. The HOPR Farm is going from strength to strength, so moving funds out of Uniswap won’t leave the token in the lurch.
But it’s one thing to decide to move the liquidity, another to find an optimal distribution.
Which DEXs should we move to? On which chains? Which token pairs should be covered? In what distribution?
That’s what you will need to decide on.
Phase 1: Discussion (14th May — 21st May)
With the announcement of the topic, the discussion phase is now open. Over the next week in the forum, a discussion will be held to generate community proposals for how to proceed. Please signal your support for posts and threads by using the “like” function. Once you’re ready to make a proposal, create a new post in the dedicated proposal subcategory, where it can be further discussed and assessed by the moderators for validity.
In addition to the standard validity requirements laid out in the DAO rules blog, proposals for this topic must meet the following criteria:
- Funds can only be redistributed to decentralized exchanges which are listed on Coingecko with an average 24h trade volume of at least $1m as of May 5th.
- Proposals can distribute liquidity across up to a maximum of five exchanges. All exchanges and chains must be clearly specified.
- For each decentralized exchange, the proposal must specify the intended token pairing(s) in addition to the amount of liquidity to be put there.
- If a decentralized exchange has additional parameters (e.g., token weighting), these must be specified.
- ALL liquidity must be redistributed. If you would like to propose leaving some of the liquidity in its current location, this must be specified.
- Proposals must describe the planned redistribution in terms of percentages, not raw amounts.
The discussion will be moderated as explained in the DAO rules.
Proposals which break from the core precepts of the discussion (e.g., trying to move the funds anywhere other than a decentralized exchange) will be marked as INVALID.
Proposals which do not fully meet these requirements (e.g., not allocating the full 100% of liquidity) will be marked by the moderators as INCOMPLETE, along with an explanation of what information is missing.
In general, the aim is to reach a proposal which can be implemented without requiring input from the HOPR Association. We appreciate that it may not be possible (or useful) to specify every single step. For example, if a proposal requires moving liquidity to an exchange on a different chain, it’s reasonable to omit the steps involved in swapping tokens to that new chain (the HOPR Association would simply try and optimize for the cheapest swap route). But proposals which require the HOPR Association to make judgment calls will be marked as incomplete.
Phase 2: Referendum (21st May — 23rd May)
After a week of discussion, it will no longer be possible to make new proposals. All valid proposals will be highlighted by the moderators and put to the community in the referendum stage. You can signal your support for a proposal by “signing” it. (Future experiments will have a dedicated sign functionality. For this one, just show your support for a proposal by liking it, as you would any other forum post.)
After 48 hours, every proposal which has received support from 20% of DAO forum participants will move forward to the vote stage. If fewer than three proposals receive 20% support, the top three will move forward to the vote stage. All other proposals will be rejected.
Phase 3: The Vote (25th May — 27th May)
The winning proposals from the referendum phase will be put on Snapshot for 48 hours. Every HOPR token holder will be able to signal their support for their preferred proposal. Votes will be allocated on a one token, one vote basis. The HOPR Association treasury will not vote, neither will locked investor or team tokens.
Everyone will be able to vote, no matter where their HOPR tokens are held. This includes xHOPR, wxHOPR, and HOPR that is locked as UNI-V2 in Uniswap or the HOPR Farm.
At the end of the voting period, the proposal with the most votes will be accepted and enacted.
The full timeline for the experiment is as follows:
- Phase 1: Discussion 14th May — 21st May
- Phase 2: Referendum 21st May — 23rd May
- (48hrs to set up Snapshot)
- Phase 3: Vote 25th May to 27th May
All phases begin and end at 2pm CET. Separate blog posts explaining phases 2 and 3 in more detail will be published next week.
Up to 50,000 HOPR in Incentives
The discussion period for this vote is being incentivized with up to 50,000 HOPR tokens. The goal of this is to incentivize active, constructive discussion. Trivial comments that do not add value, spam or bot messages will be ruthlessly moderated and will not receive any rewards. To keep people focused on the actual business of governance, rather than simply trying to game the incentive system, the method for distributing the incentives will not be disclosed until after the vote.
However, to ensure the system is fair, the algorithm for distributing incentives has been pre-written and cryptographically signed. In this way, we can guarantee that the incentivization system is not altered or retroactively created based on the outcome of the discussion.
We hope you’re as excited about this next step in our governance journey as we are! Head to the forum now to get started. The vote for all token holders will begin at 2pm CET on May 25th.
Sebastian Bürgel & Rik Krieger
HOPR Founding Team