What is DAO, and how’s JaxCorp DAO different? (part 2)
by Maryna Trifonova, Head of Content at Jax.Network
We continue to introduce the DAO concept that we already started to talk about in our previous post. In this article, first and foremost, we would like to explain the logic behind the introduction of DAO governance and give a more detailed review of the internal structure of JaxCorp DAO.
Current governance systems follow a similar pattern, where governments impose rules that make the distinction between people more clear. They divide them on the basis of clothes, education, and status. If you were lucky enough to be born into a wealthy family, your life would be filled with the best private schools, most expensive clothes, and prestigious job offers. Indeed, the image of wealth may be motivating for those who weren’t so lucky. Although, would it bring happiness to a boy who had always dreamt of being an astronaut but had to become a corporate lawyer only to be able to support his family?
Taxation is one of the ways to reduce inequality, however, with major tax havens willingly embracing more and more capital, it isn’t as effective as it should be. Therefore it makes sense to create a fully transparent DAO with proper taxation in place. It’s important to note that everyone voluntarily chooses to use our system and pay transaction fees and UBI taxes.
JaxCorp DAO governance
We would like to shed some light on JaxCorp DAO governance. As it’s a for-profit organization, it’s governed by three economic parties, which get equal voting rights and agree upon all the critical matters regarding the DAO. The governing entities include miners, (W)JAX holders, and (W)JXN holders.
Firstly, the DAO’s general policies except financial spending policies are fully governed by people who are burning JAX on Shard-1.
50% of any transaction fees, UBI tax, and transaction tax collected are held in the DAO under the control of people burning JAX on Shard-1 representing a total of 100% votes with any proposal needing 51% votes to be passed.
50% of any transaction fees and tax collected + the invested amounts are spent by a council comprising of the following:
- eJaxians — Miners receive their votes in proportion to the hashrate they possess. Please keep in mind that all the miners can get only ⅓ of the total votes, which are then subdivided in accordance with the hashrate. The more hashrate a miner has, the bigger portion of the votes devoted for all miners, he gets.
- aJaxians — (W)JAX burners get their ⅓ share of votes for burning (W)JAX. (W)JAX tokens need to be burnt in the first place and only after governance votes can be obtained. The person burning the most (W)JAX tokens gets access to update the policy contract. However, his key can be overridden by the community through a 51%+ majority vote of UBI beneficiaries.
- iJaxians — (W)JXN burners are entitled to the remaining ⅓ of the votes. They need to deposit (W)JXN tokens to the DAO so that 50% of the tokens are burnt and shares are issued in exchange, while another half is invested into the DAO. These funds are to be used for company spending. However, the majority of the DAO financial governance council (51%) should agree upon the use of funds, and the (W)JXN contributor has to also approve the spending of funds he invests. Those funds, once pledged to the DAO, cannot be withdrawn by the (W)JXN holder. In exchange, people get not only governance votes but also shares and dividends on DAO profits.
As we can see, management of the funds under JaxCorp DAO is automated and strictly regulated, allowing spending only if the investor and majority votes are in its favor. Our main goal here is to reduce the supply of money and inflation, making everyone wealthier in an equal proportion. Thus we claim that burning tokens is important, as energy is the ultimate source of power in the world. That explains why aJaxians and iJaxians deserve their right to participate in the DAO governance. Meanwhile, eJaxians were given a third of the voting power due to their role in defending the network, hence JaxCorp DAO.
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