Governor DAO
December 1st, 2020
Decentralized Autonomous Organizations have the potential to represent massively diverse
and profitable organizations. This potential is a legitimate disruptor to the traditional framework
of businesses and legacy enterprises. However, existing DAOs across the spectrum, primarily
due to errors in design and implementation, have predominantly failed to realize this massive
potential. From inception, Governor DAO is designed to overcome these obstacles and, in doing
so, behave as the quintessential governance model for other DAOs and institutions to emulate.
This cooperation is recognized as the basis to Governance-as-a-Service.
The open-source nature of smart contracts enables trustless interactions between two or more
independent parties. These interactions are enforced by code and verified by miners in a
manner that protects the trustless, peer-to-peer qualities of said interactions.
This technology is the lifeblood of our new age of information and has only just begun to disrupt
the infrastructure of legacy enterprises across a multitude of industries; it is set on a trajectory to
create disruptions unquantifiable by any perceivable metrics. Decentralized Finance (DeFi) is
the most immediate example of the real-world impact of this tech. Automated Market Makers
like Uniswap and Balancer allow anyone to create their own decentralized exchange pairing and
trade any ERC20 token with minimal barrier to entry. Peer-to-peer lending protocols like Maker,
Compound, and Aave are responsible for billions of dollars in trustless crypto loans, where
depositors consistently earn significant yield at a rate far superior to anything possible under the
traditional banking framework.
The 2017 bull run was dominated by (largely overvalued) ventures that sought to apply
blockchain technology in new and exciting ways. For the most part, these ventures materialized as
either vacuous endeavors or tedious solutions to non-existent problems, creating numerous
redundancies within the space. But as much of the excess or “fluff” projects died out, the past
year has marked a key shift towards powerful application of this blockchain technology, towards
redundant or inefficient industries where smart contracts are immediately applicable for direct
impact. Asset exchanges and lending, as mentioned above, are two striking examples. Areas
like virtual assets and artwork, insurance, Venture Capital, and data exchange are additionally
on the cusp of major transformations.
However, the immutable set-and-forget nature of the smart contract building blocks is at
odds with the iterative business models they seek to disrupt. And while it’s possible that
these contracts can be deployed as perfection on day-zero, reality suggests that these highly
experimental projects require some framework for continued maintenance and improvement to
be truly sustainable and successful in the long run.
In order to protect the decentralized, trustless nature of applications and protocols, projects that
are intended to be upgradable require some hard coded governance framework. In other words,
said projects must hardcode some mechanism of ownership to the participants in the project
itself.
In many cases, this is most effectively done by situating the project as a Decentralized
Autonomous Organization (DAO). At a high level, a DAO-type project is one that is entirely
owned and operated by its participants via tokenized ownership. In order to contribute as an
owner of the project, individuals must acquire the project’s token, which grants them access to
voting. In a true DAO, all actions are carried out as the result of a majority approval vote. These
votes can reflect modifications or upgrades to the project’s underlying smart contracts,
mechanisms for revenue sharing, changes to the voting metrics itself, and so on.
When implemented as intended, the DAO framework has radical implications. By connecting
ownership and activity as a single-interest participant body, business can be conducted at a
level of efficiency not possible under the traditional framework. By automating certain aspects of
the business via smart contracts, such as the management and underlying service, marginal
costs for said operations reach zero. This cannot be replicated by traditional counterparts.
Unfortunately, the aspirational superiorities of Decentralized Autonomous Organizations have
largely failed to manifest to date. There are several recurring themes that DAOs or otherwise
community governed protocols tend to experience:
● Apathetic participants
● Poorly designed governance
● Irreversible day-zero blunders
These themes largely play hand-in-hand, and they are seen almost universally throughout the
DAO space and more broadly via decentralized governance. Token ownership guarantees participation, but many token holders never intend to participate. Governance rules and
frameworks are often designed on the assumption that holders want to participate. As a result,
some immediate assumptions baked into the original contract deployments because launch day
errors embedded in the protocol can’t be reversed.
Maker DAO’s recent flash loan voting attacks highlight the problem of apathetic participants,
where only a handful of MKR holders cast votes, making outcomes susceptible to swaying in
favor of a single larger token holder. Uniswap’s inability to lower quorum (due to quorum not
being met) is reflective of poorly designed governance. Yearn’s capped 30,000 YFI supply,
despite widespread support to extend emissions, is a prime example of an irreversible day-zero
blunder.
When a DAO is deployed in a proper manner, that does not make it susceptible to the above
shortcomings, its superiority against traditional competitors will be irrefutable. Though as of
today, that “perfect” DAO has yet to surface.
Governor DAO is designed from inception with three primary objectives in mind to:
Perhaps the greatest dilemma DAOs face – almost unilaterally – is a higher barrier to entry for
participation. In many cases, the capital required or technical knowhow prices out a majority of
the community. In some organizations, huge capital and keen technical knowledge are the
minimum ticket of entry.
Governor’s approach to community governance emphasizes incentivized participation that is
accessible to all – ensuring ease of access for all participants.
Of course, there will ultimately be different levels of participation in Governor: the developer
team building out various components of the project, passionate community members drafting
proposals and participating in competitions, auxiliary support, in way of marketing, business
development, and so on.
Additionally, casual community members are equally emphasized through an engagement
program for incentivized microtasks. Long-term this will come as an individual Governor App or
dApp for your devices to collect micro-data and provide you with direct Ease of Access to all
Governor interfaces, products, and services. Immediately, this looks like a buildout on Wix, a
lightweight social application, where we can allocate assignments, micro-tasks and quests.
Participation in these tasks yields points, which contributes to a level/tier system. Ultimately,
these points earned, and levels achieved translate to prizes: GDAO tokens, NFTs, platform
privileges, and so on.
Wix is a powerful tool for building out an engaged community with tasks as simple as tweeting
about the project, inviting friends, participating in the forums, and so on. Beyond that,
assignments and quests can be leveraged for data collection: short surveys reflecting market
sentiment, background in crypto, trading tendencies, and so on. All data collection is opt-in and
100% voluntary. The data collected from community members will be compiled into data
packages/reports that can be sold via Ocean’s Data Marketplace (and can be additionally
leveraged in other capacities).
Ocean has not yet built out a robust library of data sets, which puts Governor DAO in a uniquely
desirable position to play an authoritative role in the marketplace. Similar data packages to our
project’s capabilities are currently priced on Ocean in the range of thousands of dollars per
purchase. Ultimately, this is the power of leveraging the contributions of the entire community:
through data collection or otherwise, achieving significant revenue generation through the help
of everyone involved which would open up the potential roles of authoritative data aggregators
and trusted Data pools. Whereas the integrity of mass data hosts, as of now, is predominately
contentious at best. Leveraging an incentivized ecosystem enables long-term growth and
maturity for a project, meanwhile providing an avenue through which members may engage in
collaborative and meaningful ways — benefitting the entire community.
The aforementioned inherent complications within the infrastructure of DAOs positions Governor
DAO as a pioneer in the unfilled niche of Governance-as-a-Service (GaaS).
At the highest level, GaaS refers to the process of leveraging our own merits and technology to
bootstrap third party projects. Immediately, this materializes in the form of consulting ‐ working
with new projects to port some of our techniques (airdrops, LGE, taxed farms, etc.) so they can
position themselves for success at launch.
Additionally, this can evolve and take on the form of an even more comprehensive Unrug-as-aService package: working with communities that underwent similar exit scams as our own and
helping them to pick up the pieces following the same or similar steps in which Governor
DAO has taken. Ultimately, Governance-as-a-Service is a full-fledged governance
bootstrap program: utilizing our own highly engaged community to guarantee fair and active
participation into governance of third-party DAOs on launch day. This takes the form of an
allocation to the Governor treasury and/or an airdrop to GDAO holders (perhaps filtered by
addresses recognized as “active voters). Initially, the buildout of Governor DAO will prove the
enthusiasm of our immediate community that may be desired by other projects. Beyond that,
governance tokens accumulated to the treasury by the GDAO farm taxes (YFI, UNI, SNX, and
AAVE) serve as a proof-of-concept for the ability to govern other projects. These tokens were
chosen as a test group to utilize for voting and proposal creation directly from the Governor
treasury, as dictated by GDAO holders. Upon the successful utilization of these tokens as active
participants in governance of their respective platforms, Governor DAO shall provide the same
service for other platforms as part of the Governance-as-a-Service package.
In addition to the problems facing virtually all DAOs today, there is precedent to suggest a
market to remedy those issues. For example, DeFi Money Market (DMM) DAO allocated 3.75M
DMG, to DXdao for help with the DMG crowd sale and governance model. This sum of tokens is
valued anywhere from $1M USD at the time of writing and $5M at historical all-time high. The
payment was made on July 2nd to the DXdao treasury, but as of time of writing, roughly five
months later, DXdao has failed to build out infrastructure for their voters to interact with the
DMG tokens that sit stagnant. This highlights that a major market for GaaS exists, despite a lack
of service providers.
Of course, Governor DAO is not immune to the problems outlined that other DAOs have faced.
The governance of Governor will be an iterative deployment, from the initial launch as fully
centralized to a near future of totally decentralized, 100% DAO ownership.
Ultimately, the GDAO token holders will have complete ownership of treasury and full control of
voting. All capital raised and revenue generated by Governor DAO is allocated in full to the
treasury. This directly aligns the incentives of GDAO holders with the overarching emphasis of
the project to operate as a revenue-generating organization.
However, total control is unrealistic in the initial stages of the project, where much of the supply
remains out of circulation. An additional document wholly focused on governance will outline the
steps required to go from “now to DAO”, alongside different risks and understandings to make
that process as effective and seamless as humanly possible.
The GDAO token grants voting rights in the DAO and ownership of the treasury. There are no
limitations to how GDAO holders allocate treasury funds beyond the required consensus. Voting
privileges extend through all matters of internal governance. Additionally, GDAO token holders
may leverage their tokens as proxy voters on governance issues across any of the third-party
governance tokens held by the Governor treasury, including AAVE, SNX, UNI, and YFI. GDAO
is a fixed supply, burnable ERC20 token. The total supply of 3,000,000 GDAO was minted at
contract deployment, and there is no mechanism to mint additional tokens. There is an internal
burn function which may be called to permanently destroy tokens, making GDAO deflationary.
300 ETH was raised and posted as liquidity alongside 150,000 GDAO tokens (500 GDAO:1
ETH). Participants received a synthetic LP (sLP) token that reflects 1:1 ownership of genuine
Uniswap GDAO-ETH LP tokens. When the farms go live, sLP holders will be able to send their
sLP to a swap contract to receive the real LP tokens 1:1.
The LGE was enacted in such a way as to reward participants (didn’t swap ETH for GDAO) and
lock sufficient initial liquidity until liquidity providers are further incentivized by the farms. The
event commenced on November 16th, 2020 and filled out in roughly thirty minutes.
A token snapshot of BREE and SBREE was taken when the developer exit-scammed the
project at block 11016190. All stakeholders in the CBDAO ecosystem were accounted for and
are entitled to an airdrop claim of GDAO tokens with the following associated rates:
● BREE Holder: 1x
● BREE Staker: 1.2x
● BREE Liquidity Provider: 2x
● BREE LP Staker: 2.2x
● SBREE Holder: 0.8x
The total airdrop allocation of 1,233,156 GDAO is vested, with a penalty imposed to those
who claim before the vesting is complete and a bonus to those who wait the full duration of
the vesting period. The process is as follows:
All airdrop recipients are entitled to claim only once – zero exceptions.
Airdrop vesting period begins in early December 2020.
Day One: 10% of each recipient’s GDAO airdrop is claimable.
For 90 Days: an additional 1% is claimable each day, until the full 100% is realized.
Claiming early forfeits the unclaimed portion of their airdrop.
Unclaimed tokens are treated as follows:
a. 50% is burned
b. 50% is sent to a rewards pool
After 90 days, the rewards pool from early claimers is distributed to airdrop claimants in
addition to 100% of their token allocation.
The distribution of the rewards pool is proportionate to each user’s stake.
This airdrop model was designed to incentivize long term supporters, protect interests of those
looking to claim their airdrop early, and institute a deflationary mechanism to the GDAO supply.
Users A, B, C each have a 1,000 GDAO airdrop claim.
User D has a 2,000 GDAO airdrop claim.
● User A claims on Day 1. They receive 100 GDAO (10%) and forfeit the other 900
GDAO.
○ 450 –> burned | 450 –> rewards pool
● User B claims on Day 40. They receive 500 GDAO (50%) and forfeit the other 500
GDAO.
○ 250 –> burned | 250 –> rewards pool
● User C and D wait the full 90 days to claim. Of the 5,000 GDAO airdrop total, 700
GDAO was burned and 700 was sent to the rewards pool. Not counting the rewards
pool, a total of 3,000 GDAO are available for the recipients, representing 100% of their
original claim.
● User C claims their airdrop and receives all 1,000 GDAO plus 233 GDAO from the
rewards pool | (rewards pool) x (share of original airdrop) = (700) x (1,000 ÷ 3,000) ≈
233.
● User D claims their airdrop and receives all 2,000 GDAO plus 467 GDAO from the
rewards pool | (rewards pool) x (share of original airdrop) = (700) x (2,000 ÷ 3,000) ≈
467.
● The final distribution is then as follows:
○ 4,300 | GDAO Distributed: 100, 500, 1,233 and 2,467 GDAO, respectively.
○ 700 | Burned: tokens permanently destroyed.
A total of 1,200,000 GDAO tokens are allocated to 9 slow, constant drip pools with a 4x boost
on those farming the GDAO-ETH LP token in addition to the following single asset staking
options: ETH, WBTC, USDC, LINK, YFI, UNI, SNX, and AAVE. All farms carry a 2% fee on
deposit which is delivered directly to the Governor DAO treasury. The farms are designed to
bootstrap capital to the treasury in a manner that doesn’t require an outright token sale. This
approach alleviates legal uncertainty and also allows the free market to determine the fair value
of GDAO tokens allocated to the farms. Starting December 22nd, tokens will be rewarded at a
rate of roughly 1 GDAO per block, which amounts to just over 6,500 GDAO daily until all
1,200,000 GDAO tokens are rewarded – roughly 180 days after inception.
The remaining 416,844 GDAO is allocated to the treasury as DAO reserves to be deployed by
GDAO holders. These tokens may be used however the GDAO holders intend: to pay workers,
as awards for community competitions, or to incentivize participation for microtasks.
2022 @Governor DAO
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