LunarDAO TokenomicsV2, Primitives & Roadmap
Based on the feedback from the growing LunarDAO Squad (the involved community), LunarDAO is revising its tokenomics to optimize for the main purpose of the DAO: an investment fund for privacy projects, anonymity tooling & associated research. Connected to the mission of education in the form of wiki: “How to achieve privacy now?” and the academy, decentralized cultivation of agorists, hackers, philosophers, economists & leaders, who will further scale up their skills and loop them back to the lunarpunk movement.
The token was never meant to be something for a small group of the people. The Squad needs to be not only the main owner of governance tokens, but also of the DAO structure itself. The way the tokenomics are structured now need to be changed to accomplish the DAOs objectives and echo the voice of the Squad!
The primitives for LunarDAO tokenomics must follow the mission objectives: Investment Fund, be in line with the DAO Governance and to respect the mentioned objectives from the Tokenomics-v1 and all the concerns of the community:
- Squad Wealth - Build distributed treasury & decentralized community without private rounds
- Create an appropriate investment system & incentives, allowing for allocation in the supported projects
- Reward early participants without excluding or disabling the future Squad members
- Incentivize community
- Keep core team operational
- Allow for quality research & education
- Promote Lunarpunk mission and narrative values
Based on the objectives, there are three main primitives on the roadmap to build anti-fragile incentive-aligned lunarpunk squad wealth. The DAO (and its tokenomics & governance), On-chain Agreements and AnonDAO.
1. Investment DAO
- Token economics primitive fulfilling the objectives.
- Robust but simple structure taking into account the concerns and proposed changes.
- Deploying tested design over experimentation.
2. On-Chain Agreements
A primitive to create an on-chain SAFT, which ensures both counterparties: LunarDAO Squad (the investing community) and the supported project, following the contract without state legal structures involved. Such research needs a collaboration between LunarDAO allies, researchers, web3 devs and lawyers.
A proposal is to create a primitive of a template SAFT in the form of an NFT. Such contract would contain all the points mentioned in the investment & raise, in particular *:
Project X offers to bring a ticket of # of T tokens or any other value to the ecosystem in exchange for LunarDAO support. The project is evaluated by the research team and proposed to submit an investment LIP in which it must be clearly defined:
* Name of the project
* Value for to the ecosystem (new primitives, tools, knowledge, monetary etc)
* Requested size of support in USD terms
* Offered amount of Project X tokens T and price per USD (if the project is monetary based)
* Trigger event - Tokens T will be send to LunarDAO treasury: Time period needed for execution or expected time of launch (when T becomes liquid)
* Is the team X supported by private investors or VCs, other DAOs (or plans to) or just LunarDAO?
* If yes: In which size and what is the price of token T to other supporting subjects?
* If project X is token based: T tokenomics
* Project X wallet address to recieve the support
* LunarDAO treasury wallet address to recieve token T in agreed time, amount and price
* These points are illustrative and can change as the tokenomics are under construction.
This primitive needs to have a tool to enforce the contracts to help build a robust incentive system and ensure the DAO receives the promised tokens to its treasury.
LunarDAO Stewards (core team) explained in detail the philosophy, choices and trade-offs behind remaining anonymous in this essay. The contradiction of anonymity vs Ethereum was mentioned in this thread. The AnonDAO primitive does not exist on any mainnet yet and we have to start somewhere.
LunarDAO aims to invest into such primitives and create a solution when the community can migrate to a completely anon DAO: LunarDAO 1:1. This needs a research on teams developing the primitive and implementation of such migration, token bridge and of course a lot of community discussions and voting.
LunarDAO tokenomics design: Concerns, references, proposals
Tokenomics based on $LUNAR/$VOX was not accepted - for reference and possible usage of parts of that architecture see tokenomicsV1. To understand all the input, read tokenomics forum channel.
Summary of the concerns
- The DAO purpose - investment fund - may be misread. Make it more clear!
- v1 is not the best design for longevity of the DAO
- The De-Fi based protocol can distract from the privacy investment fund goal
- Tokenomics design shall be discussed and not imposed by the core-team
- LUNAR/VOX may be exposed to a fragile price-positive feedback loop
- Introducing external incentive, not focusing enough on the treasury growth
- The De-Fi protocol is too complicated - simplify!
- v1 design rewards newcomers at the expense of late adopters and over values early participation at the expence of long-term vision
- Missing the incentive to pursue new investments
- v1 is exposed to the risk of engineering a monopoly
- The focus on the value beyond token needs to be better clarified
- $VOX non transferable nature is near to impossible to enforce
- Missing minimum ETH threshold to evaluate the initial sale as successful or not
- v1 Does not consider dynamic emission; all hard-coded
Alternatives, References & Advices
Look into other investment funds and their structure:
MolochV2 - investment DAO primitive, used by Metacartel
Metacartel Venture; shares with rage quit mechanism
PleasrDAO - Fractionalized ownership of investment
BadgerDAO fair launch + badger docs
Check out web3 accelerators currently developed:
- Web3 Accelerators: LongHash Ventures,
Governance, addressing problems of 1 token = 1 vote vs anonymity:
- Aragon DAO Discord discussion about new voting models
- Reources on voting question in DAOs:
- Quadratic voting: It is not known how to implement quadratic voting in a fully anonymous way (just pseudonomously at the moment) - this is a concern for the future roadmap.
- Index token issued for prediction markets. The X amount can be burned into the DAO governance token. Example: Indexcoop
- Allow dynamic emissions based on the activity in the DAO and or the community decision
- Allocate bigger % for airdrops and make incentivized system for smaller tasks, supporting squad members with less entry funds.
- Setup a minimal raise amount to evaluate if the initial raise was successful or not
- Nouns-style emission or proto-DAO before token launch nouns.build
- Implement management fee to reward Stewards
- Setup a multisig for donations until a more robust incentive structure for investment DAOs has been figured out
The 3 primitives in steps
1. LunarDAO tokenomics & governance design, meeting the objectives, as democratically as possible:
a) Write an announcement (article + social media call)
- Share the final version of this document with the call out to build and discuss tokenomics together
- Share about the primitives
- Align incentives for investment
b) Research all the proposed options for the tokenomics mentioned above in “LunarDAO tokenomics design”
c) Submit & discuss the points from the feedback & research:
- Constructive & Advancing vs not fitting (doxxing, not aligning with the lunarpunk aims etc)
- Capped vs Infinite supply
- Permissionless vs Restricted membership
- Token weighted vs Alternatives governance
– Liquidity lock up
– Quadratic voting
– Rage quit
– Shares slashing
– Diluting Bonds
- Size of the DAO: small & controlled vs open & growing
- Shares vs Tokens (tokenized shares)
- Emission style, hard code vs DAO vote dynamic vs other metric dynamic
d) Create final tokenomics draft + discuss details & decide
e) Decide on the launch strategy with as fair distribution as possible
f) Announce, Deploy & Launch token
2. Build On-Chain agreements primitive
a) Research committee leads the research for existing protocols (@0xQ, @saliveja, @serinko)
b) Encourage the community to join or give input about the existing protocols which can be used
- Make an announcement to encourage others to participate
c) Communicate with the lawyers about the legal issues of the SAFT
d) Implement programming knowledge to draft the SAFT NFT contract
e) Propose the final version
- Use LIP template
- If #1 is finished: Use the DAO to vote and
f) Deploy the SAFT template
a) Research team that most likely delivers the primitive
- DarkFi dev team presented the AnonDAO primitive on HCPP22 - Contact them and see where they are at with the development
- Look into other teams working
- Choose the best team whose proposal align with DAO goals
b) Discuss the conditions of support
c) Submit a LIP and vote on the development support (raise for the developing team)
d) Test the primitive properly - run the DAO on testnet
e) Discuss migration in LunarDAO
- How to deal with 1:1 treasury/token migration
- Governance concerns
- Address all risks
f) Submit a proposal to migrate if there is support in LunarDAO Squad
g) Vote and execute the decision
However the points #1, #2 and #3 are numbered according to priority, they are interconnected parts of the same development. Step #1 is a top priority and the main focus of the entire core team (Stewards) to grow and encourage the entire community to join and together build LunarDAO token economics in line with the aims and as democratically as possible. Meanwhile this work is ongoing, the research team can start to work on #2 (and open the door to more professionals to join). Besides these two points, the initial communication on #3 (particularly 3.a and 3.b) shall progress alongside.
The works on the DAO has been ongoing for several months. There are six Stewards (that number includes Media committee as well as the initial research). The Stewards work has been:
- Initiate the DAO
- Coordinate operations
- Coordinate administration
- Coordinate legal questions
- Coordinate development
- Allies Reach out
- Community Management
- Initial Governance & Tokenomics
- Research & wiki
There are several externals helping with development, graphic design, sys-administration, legal issues and translation who coordinate with the Stewards but are not part of the core team.
We want to prevent selling the DAO community to private investors or VCs. Until now all the Stewards work for free and some of the externals were paid from the savings or will be paidlater from core-team budget. The agreement is to pay all the externals first before any Stewards.
A good point which was raised in the discussion, is to keep in mind the sunk-cost fallacy and make sure that’s not dictating any of the decisions. The decision to halt the sale and slow down to democratize the process was a good one. The question of the ongoing costs need to be addressed. It would be valuable to hear opinions from the community to ensure that further steps taken are in the benefit with the entire DAO community.
Proposals addressing operational budget before launch
- Share the primitive roadmap and accept donation to the core team multi-sig wallet so the decisions aren’t in stress due to operational costs.
- Consider Nouns, proto-LunarDAO raise to keep the work operational before the main raise
- Consider submission for a grant: MolochDAO, Gitcoin, MetaCartel, CultDAO
- Any other ideas?
Option #1 seems the easiest and straight forward. Please share what you think about these options.
The main focus of the upcoming discussion shall be on the questions and dilemmas in the point The 3 primitives in steps, #1, c) . Besides that we would like to encourage everyone to share an opinion on all the primitives and the budget concern mentioned in the previous point.
This document serves as an overview and a foundation for ongoing discussion. Any opinions, feedback, proposals and ideas on the questions raised in this document are welcome.
Let’s build together!