Exploring Scalability Solutions
Ethereum continues to grow and attract more economic activity, but the downside is that it’s increasingly expensive to transact on mainnet. As a completely on-chain entity, DXdao understands well the frustrations of high gas prices. To address this, DXdao has a Governance Gas Refund program that reimburses members for certain on-chain governance actions, like voting and proposal submissions.
Ethereum is home, but the future is a multi-chain world. In January, DXdao started several initiatives to bring scalability solutions to its products and governance:
- Developed “DXdao — Scalability and L2 Strategy”, which concluded that liquidity will be fragmented across many sidechains and L2’s. DXdao should develop expertise in deploying its products and “bases” to several chains.
- DXdao Expands to Arbitrum! — Arbitrum is a Layer 2 scaling solution that uses an optimistic rollup. DXdao deployed Swapr on the Arbitrum testnet and plans to deploy Omen and a DXdao ‘base’ to govern on the rollup.
- Mesa and a DXdao base already live on the sidechain xDai and (very!) soon Omen will launch on xDai, enabling cheap prediction markets and expanding Omen’s customer base.
Squad leaders put together and presented their first formal roadmaps at a specially allocated community call. The initial reception has been very positive, and contributors are looking to better format these roadmaps for quarterly presentation. Check out roadmaps and presentations for Omen, Swapr, Mesa, DXbiz and Communications/marketing.
- High gas costs have been crippling for Omen, but hope is on the horizon. The latest version of Omen soon-to-be released includes xDai compatibility, which will greatly expand the customer market by drastically lowering the cost to trade. DXdao has also partnered with API3 to provide price feed oracles on xDai.
- Just as exciting, this new release also introduces scalar markets, which allows betting on a number scale, rather than categorical markets. This should open up Omen to more financial use cases.
- Omen is also engaging the community for market ideas! It held a community competition for Omen markets on xDai and is soliciting more for the upcoming xDai launch.
- Perhaps most excitingly, DXdao and the Omen community are discussing the creation of an Omen Guild and the launch of an OMN token.
- Swapr Alpha has been live for just over 6 weeks and has averaged around $200k of liquidity and $20k of daily volume. These numbers should increase significantly as we move to Swapr Beta with DXdao-supplied liquidity, thanks to the installation of the multi-call scheme.
- As part of DXdao’s scalability strategy, Swapr deployed on Arbitrum testnet!
- On the development side, work continues on a governance interface to allow pool fee changes and a “Build your own liquidity mining” feature for projects. The UI is looking slick:
- Mesa was designed as a generic decentralized exchange, but found product-market-fit as a platform for token offerings or IDOs. The Mesa squad is focused on launching a v2 that is tailored to new token launches.
- Mesa hopes to offer fair sales and prevent gas front-running wars. The design is based on the EasyAuction model developed by Gnosis.
- The Mesa squad is growing, adding a front-end developer and a designer to build out the MVP for Mesa v2. The squad is still looking for more help — get in touch if you’re interested!
Rails continues to chug along, but with the upcoming deprecation of Loopring’s v1 ZKrollup, the community will have to decide its fate. Some have suggested making Rails a hub for L1 to L2 transfers, but more resources and community discussion is needed to figure out what a Rails v2 would look like.
DXdao’s treasury has benefited from the rising price of ETH. The treasury is now $40m with over 20,000 ETH. Over the past month, DXdao has moved to allocate some of its treasury into stablecoins to facilitate worker payments and diversify the treasury. The Treasury Authorization Proposal outlined a plan to purchase $3m of stablecoins spread across DAI, USDC, sUSD and USDT. The proposal authorized three different methods:
- Gnosis Protocol Relayer — the recently passed multi-call scheme enables DXdao to trade on the Gnosis Protocol in a completely trustless way. Long-term, this is the best option, but it is still being tested with smaller amounts.
- DXdao Developer Multisig — up to 100 ETH can be transferred to be exchanged for a stablecoin. The multi-sig must have at least 5 addresses with over 0.5% REP that have verified ownership of the multisig using a Keybase saltpack. There is a proposal to transfer 100 ETH to be traded for DAI with address verification currently in the queue.
- Member Balancer — an idea, which some have called “brilliant”, from Skymine Labs to incentivize third parties to send stablecoins to the treasury and ask for ETH in return. A proposal must include the transaction and be from the same address. It can request 1.01 times the amount of ETH to provide a small incentive. Already, two Member Balancer proposals for 50.5 ETH — one for Dai and one for USDC — have been submitted.
The other big initiative for DXdao governance was Governance 2.0. A working group was established late last year to try to find a new governance structure that sustainably intertwined DXD and REP into DXdao governance. There is a thread with a potential signal proposal that outlines the core tenets of a new system. It covers three main areas:
- A new voting power equation that combines REP and DXD
- Good governance incentives
- Migration process with REP inflation and vested DXD
The new voting power equation is at the core of Governance 2.0. In the new system, both REP and DXD would be required to vote on proposals and have power in DXdao. The proposed equation would calculate a “DXD Influence”, based upon DXD staked in governance contract or as an LP and the future days staked, and a “REP Influence”, based upon the amount of Reputation earned with a decay function to minimize the influence of REP earned long ago.
There is still a lively discussion in the forums to iron out details before a formal signal proposal is sent to REP holders.
DXdao is building the capabilities to be an on-chain incubator. It can serve as a first user for decentralized products and services, an investor and projects can use Mesa and Swapr for fundraising and token distribution. Several projects stopped by Monday’s DXbiz call in the last month to discuss collaboration:
- _Prtcl — a decentralized wiki and content management system interested in DXdao as a user and investor
- Ellipticoin — a new base-layer app chain that’s already live with an AMM built-in, considering Mesa as an IDO platform
- Almonit — a self-governing publication built on ENS and IPFS, interested in creating a decentralized blog for DXdao (and other DAOs) and potentially investment + Mesa IDO
If you know a project that’s looking for a decentralized partner, get in touch!
Another big step for DXbiz is OK-R implementation with help from @0xVenky. For those unaware, OK-R stands for “Objectives and Key Results”; a goal-setting tool designed to track progress towards measurable objectives. By introducing plans and initiatives for each Squad, the happenings and results of DXdao become more transparent. OK-R’s and their updates are planned to be shared alongside the Month in Review. Although they aren’t quite ready, the work in progress draft should give a good idea of the upcoming layout.
Additional DXbiz efforts:
- Radicle.xyz Seeder Program
- DXdao Supports DeFi Community with PAN
- John Kelleher discusses DXdao on the FTX Podcast
January Popular Forum Discussions
About DXdao: DXdao is a decentralized collective that builds and governs DeFi products. DXdao was spawned in May 2019 through a collaboration between Gnosis and DAOstack. Reputation (REP) is voting power in DXdao, and DXD is the financial token with a claim on profit from DXdao products.