The Mechanics of PRIME Lock
A Co-Governance Mechanism for PRIME Token Holders
🕸 Site | 📄 Docs | 💬 Discord | 💭 Telegram | 🐤 Twitter | 📨 Newsletter
PrimeDAO aims to set a new standard for Open Finance Governance by combining token engineering and decentralized governance best practices. In PrimeDAO, decisions are made by the Reputation holders, individuals who have contributed to the development of PrimeDAO by committing their time, knowledge, or resources to the collective. Reputation is non-transferable and can only be created by PrimeDAO as a result of a majority vote. This creates a resilient governance mechanism, where those who have contributed meaningfully to the development of PrimeDAO are able to determine it’s future.
This approach is different from a token-weighted vote, even in the so-called “Fair Launches” governance power tends to flow to those with the most capital. We believe access to capital is not the only common denominator of good governance and instead optimize for individuals that understand and align with the values of PrimeDAO.
Many Open Finance (DeFi) projects make the mistake of being entirely governed by their token holders, which leads to high rates of voter apathy and a plutocratic accumulation of voting rights. The inverse is also true: when a small group of Reputation holders possesses all authority, once-supportive token holders quickly morph into FUD producers.
Mechanisms must be implemented that offer an opportunity for PRIME token holders to govern — so long as they are willing to put their skin in the game. This should be done without compromising the political decentralization of the DAO. To this end, there is PRIME Lock.
PRIME Lock allows token holders to lock their PRIME tokens for up to six months in order to generate Reputation, with the aim of doubling the Reputation of the DAO. Furthermore, it is an example of a token sink — a mechanism that aims to reduce the amount of floating PRIME on the secondary market, in order to create value.
The quantity of Reputation received is a function of the amount of:
(1) PRIME locked multiplied by…
(2) …the length of time locked.
The final amount is then distributed pro-rata based on the aggregate quantity by time of all lockers. One final note: PrimeDAO has determined that any individual in the DAO should not possess more than 500 REP. With this in mind, any locks that result in higher than 500 REP should expect to have their Reputation slashed by the DAO.
Imagine, for instance, that the DAO decides to distribute 5500 Reputation through the locking scheme. The amount of REP accrued by yourself as a locker may look something like this:
Now when does PRIME Lock launch? It’s expected to launch close to the mainnet deployment of the DAO, which will happen at the very end of November. This blog post will be updated with more specific dates for perspective lockers as its release approaches.
