It’s been a crazy week at PieDAO, and so I have to talk a little about it today.
We’re debating a new proposal that completely redesigns the DAO’s economic model.
Alexintosh’s proposal aims to provide DOUGH holders with multiple revenue streams, incentivise active governance participation, and reward long-term pie holders.
What’s most appealing to me is that it appears to achieve those goals without compromising on sustainable DOUGH issuance.
We’d love to get more feedback on the design, so please feel welcome to visit our discord or forum and have your say.
Why the new design?
There are several limitations to the existing system.
Governance: It’s difficult for investors who are staking their DOUGH to participate in our Aragon governance system, voting can be costly in times of high gas, and there is no incentive for participation.
DOUGH holders: Are not incentivized to hold the token, with zero streaming fees on pies, or use it in governance, and are directly hurt by weekly incentives inflation.
Pie investors: Can stake their pies, but are not rewarded for holding pies long-term, the optimum index investment strategy.
The new design addresses all these limitations, directly increasing the PieDAO value proposition for all stakeholders.
Alongside this, the proposal will protect the DAO’s governance from flash loan attacks, such as the one Maker recently experienced.
Breaking it down
1. Staking and Voting
Staking will be directly linked with voting. Users deposit their DOUGH, and after one week will be able to vote and receive rewards. Incentives start at 50% interest for the first year, and scale to 75% by the second.
To guarantee that return stakers must participate in regular DAO governance, with decisions taking place in two week epochs.
2. Pie Fees
A 0.5% streaming fee will be introduced on all pies, which is half that of our main competitor. There will also be a 0.5% withdrawal fee for those who choose to cash out, equally distributed between remaining pie holders and the DAO’s treasury. The longer you hold onto your pie, the more you’ll earn as others come and go.
3. Fee Distribution
Fees gathered from the pie steaming fees are distributed to DOUGH stakers, with a greater share going towards those who have been active participants for longer. Additionally, an extra multiplier is applied based on the participants chosen lockup period:
0.8x multiplier for 6 months lock-up.
1.2x multiplier for 12 months lock-up.
2.0x multiplier for 24 months lock-up.
Conclusion
The new model is designed to incentivise active participation in the DAO, reward long-term pie holders, and provide a strong value proposition for the DOUGH token.
There’s a lot to take in, and much more to talk about.
Yesterday we got some great early feedback from Aave’s Stani Kulechov, who liked the design but thought the voting mechanism was a little restrictive:
Synthetix’s Kain Warwick also had some positive feedback:
The proposal is an evolving work in progress, and the more feedback we can get the better.
We’d love to hear from you on how the design could be improved, so why not head over to discord or our forum?