How to Use LRC to Gain Reputation In dxDAO
Preface: What is dxDAO?
DAO
A DAO, short for decentralized autonomous organization, is an organization that operates entirely on the blockchain. Unlike a normal organization, a DAO acts completely autonomously, making decisions based on the rules enforced in it’s programming rather than the decisions of a central group of people. This also allows for the information pertaining to the organization to be stored digitally across many different machines rather than in one centralized location.
dxDAO
The dxDAO is an experiment in creating what is known as a super-scalable organization. This is an organization that gets more effective at coordinating the more it grows. It accomplishes this with it’s governance framework, known as Holographic Consensus.
How dxDAO Works
The dxDAO uses a voting system to make it’s decisions. In this system, users vote on proposals raised by other users. They do this with an accumulated voting power known as reputation. Before the voting process begins, the total amount of reputation is set. This initial total is 1 million reputation. Then, the first phase of the system, the vote staking period, begins. Users of the dxDAO compete for reputation in various ways, such as locking ether and other tokens in the systems, registering magnolia tokens with the system, or bidding with GEN tokens. The vote staking period lasts for 30 days, and afterword it moves into the second phase, reputation distribution. In this phase, the total reputation will be distributed amongst users autonomously based on the metrics of each category of earning reputation. After a 2 week pause, the final phase, the governance phase, will begin. In this phase, the dxDAO will accept proposals from any user in the system regardless of repuation, and users can begin to vote on these proposals using the reputation associated with their accounts.
Part 1: Prerequisites
Step 1:
Before you begin, you need some kind of Ethereum wallet. Though many are compatible, it is recommended you use one of the following 2:
Note: Of the two, Gnosis Safe is more recommended, as it is planned to provide more functionality in the future.
To download these wallets, simply go to their respective websites, download the browser extension, and then follow the necessary instructions to set up a wallet.
It is also worth note that both wallets may not be used at the same time. So if you want to use Gnosis Safe and have Metamask installed, you need to turn the Metamask extension off in browser settings, and vice versa.
Step 2:
Next, make sure you have a token that is compatible with dxDAO in your wallet before you start. The following tokens can be used in dxDAO:
- Ether (ETH)
- GEN tokens
- Magnolia (MGN) tokens
- Any token whitelisted on the DutchX (such as LRC)
Part 2: Logging on
Step 1:
Go to https://dxdao.daostack.io/ and click the link at the top that says “Click here to take part in the dxDAO”
Step 2:
A participation agreement will pop up the first time you use the app. Read it, then check all the boxes at the bottom and click “continue” to indicate agreement. You can also click download as a pdf to download the agreement for later reference.
Step 3:
Allow the app time to connect to your wallet. Once you reach the main page, scroll down to find vote staking functionality.
There are currently 5 ways to stake your vote and earn reputation in the dxDAO:
- Lock ETH — Locks a specified amount of Ether from your wallet in exchange for reputation
- Lock Tokens — Locks a specified amount of a given DutchX compatible token (such as LRC) from your wallet in exchange for reputation
- Register MGN — Gain reputation for having Magnolia tokens in your wallet
- Bid GEN — Bid GEN tokens on one of 10 auctions in order to gain reputation
- DAO Storytelling — Reputation will be awarded to users who raise the most awareness for dxDAO
Part 3: Locking LRC
Overview
By locking a token, you give up the opportunity to sell or transfer the token in exchange for reputation in the dxDAO. At the end of the vote staking period, 30%, or 300,000, of the total initial reputation will be given out those who lock tokens. You will be given a proportion of this 300,000 reputation based on how your personal reputation score compares to others. The personal reputation score for this category is calculated as:
Amount of token × Locking duration in days × Price of token at the time of lock
“Price of token at the time of lock” represents the price of the token in the DutchX trading protocol at the time of the lock transaction.
This function works for any token whitelisted on the DutchX trading protocol. In this guide, we will be demonstrating this functionality on the Loopring token (LRC).
Step 1:
Click the “Lock Tokens” drop down on this page to bring up the selection shown below.
Step 2:
Click the “Select a Token to Lock” drop down and pick LRC from the list.
Step 3:
Input the amount of the token you want to lock and the duration you want to lock for. Only lock a token you don’t plan on trading in the near future, as you will be unable to use the amount locked in any transaction until the lock duration is up. Once you have input the correct amount, click “Submit”.
Note: You can only lock a token for 30 days at most
Step 4:
A popup from your wallet will come up to approve the transaction. Click “Confirm” on this window to continue with the transaction.
Step 5:
Wait for this transaction to complete, then another transaction popup from your wallet will come up to confirm the contract. Click “Confirm” on this popup as well.
Post-Completion
Once locked, the amount you have locked will appear on the menu under the submission form.
After the vote staking period ends on June 28th, remember to come back and collect the reputation earned from locking your tokens.
Note: You must manually unlock your tokens by clicking the “Release” button once the lock duration ends in order to use them again, so remember to come back to reclaim your tokens!
Part 4: Additional Resources
For additional info on the dxDAO, visit the following links:
To stay up-to-date with Loopring, please sign up for Loopring’s Bi-Weekly Update, and find us here:
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