How StakerDAO Works
In the first days of January 2020, a new type of asset appeared on Tezos. In block 767840, a transaction was submitted to originate the StakerDAO Contract (KT1EctCuorV2NfVb1XTQgvzJ88MQtWP8cMMv) on the Tezos Mainnet — and StakerDAO, its STKR tokens, and the Staker Agora governance process were launched.
StakerDAO is first and foremost a decision-making platform where STKR token holders collaborate to launch and manage financial assets. These token holders have the responsibility to elect a governing council from their ranks on an annual basis. They are also encouraged to participate in our forums where the off-chain work of creating a roadmap of products and discussing how existing products should change are conducted.
We treat STKR tokens as equity. Holding a STKR token is the equivalent of holding a share in Staker Services Ltd, our Cayman operating entity. These tokens fall in the parlance of “security tokens” and are held by investors who believe in the long term vision and opportunity that StakerDAO offers. Eventually, we hope these tokens will be widely traded, like shares of companies — but on a new class of emerging asset exchanges that support tokenized businesses.
We are using the Tezos blockchain to manage our governance process and token distribution because we believe that the Tezos ecosystem is best positioned to support the long term evolution of its protocol in a decentralized manner.
In fact, we used some of the Tezos open source code base to build StakerDAO. We forked the FA 1.2 token contract to launch STKR and we forked Tezos Agora to launch the Staker Agora governance explorer. The similarities don’t end there. Like Tezos, we implemented a 4 phase governance cycle. Ours runs over 1 calendar month as opposed to Tezos’, which runs for nearly 3 months. And when it came to a voting model, we also used Tezos’ representative model of governance. While Tezos has over 400 bakers who are voting on behalf of their delegators, we have a 5 member council that is elected annually.
Each governance cycle runs for 1 calendar month and is divided into 4 phases, and each phase lasts 1 week — with the 4th phase lasting the remainder of the calendar month.
During each phase, a different set of tasks are eligible to be conducted — some on-chain and some off.
This cycle starts on the 1st of each month, and the first governance cycle began on January 1, 2020.
Phase 1: Proposal
Each month, one proposal is submitted on-chain to be considered by the Staker Council. The Staker Operations team works with STKR holders in advance of Phase 1 to outline what the coming month’s proposal should contain. Over time, we expect vigorous debate on the subjects of future proposals, and the Ops team will work to package the most desirable ideas into the monthly proposal.
You can explore each proposal as it is submitted through the Staker Agora governance explorer site: Governance.StakerDAO.com.
Clicking on the “Learn More” link will reveal the proposal in detail on Agora. Clicking on the “Discuss” link will take the viewer to the forums pages where the proposal is being discussed.
Behind the scenes, you can see the transaction on Tezos that injected the proposal into the Staker contract. If a proposal is not injected during the first 7 days of the month, then no governance action can be taken that month.
Phase 2: Evaluation
During the 2nd week of the cycle, the Operations team will share information related to the proposal under consideration, and the community will use the forums (and other channels) to discuss the proposal. For a proposal to reach the Evaluation phase, it will have already had substantial discussion analysis associated with it in the periods prior to Proposal. During this phase, the Ops team makes its best case for an approval vote by the council, and the council digs into the details to evaluate their decision.
Phase 3: Voting
During the 3rd week of the cycle, the Staker Council members vote to approve the proposal. Beginning in the February governance cycle, the council will have 5 members. (The January cycle bootstrapped governance with 3 council members.)
Each council can cast a vote on-chain for each proposal, and those votes are tabulated in Staker contract and displayed in Staker Agora as they are made.
The council public keys are held by specific council members and are rotated by the Operations team when new council members are elected in the annual council election.
The first 3 council members are:
- tz1UCSwQgi8JyFZ5H949rgBbrFV2XsKSNdzf — Jonas Lamis
- tz1f2ff2n1nBuwRZPh6CoDhtsYZW1Q47xK7b — Luke Youngblood
- tz1aQKgAK3DwExdizX1rdxZGSZ3YDgt16jHc — Olaf Carlson-Wee
The remaining council members will be announced soon.
Phase 4: Implementation
During the remainder of the month, the Ops team focuses on making any changes to existing products or working on launching new products as they were approved by the council. Some implementation tasks may be trivial while others may take weeks or more to finalize implementation. It is not expected that all projects will be implemented during this 4th phase, but the phase serves as a starting point, and the Staker Agora page associated with the phase will report on the current state of implementation.
So What will StakerDAO Launch?
There are clues about the direction of StakerDAO assets in Proposal 001 which was approved in January. The proposal specifies that the Ops team should:
Ops is to prepare a proposal for February 2020 to launch a PoS tracker token
Ops is to initiate research on single token tracker for Tezos and/or Cosmos
Ops is to initiate research on an algorithmic stablecoin for the Tezos network
With this direction, we expect the February governance cycle to reveal substantial information about a forthcoming PoS tracker token model. For those who want to participate in the discussions about these and other assets that Staker could launch, we welcome you to create an account on our Forum at https://forum.stakerdao.com/, and to join our telegram group at https://t.me/stakercommunity.
