What is the overall Commons Configuration strategy?
After the Hatch, a bird needs to "Fledge" before it can fly. This proposal imagines a year of testing and learning that is heavily backed by impact investors before it eases into more market forces in year two, when the params would be significantly retooled.
A $1.50 opening price gives a nice discount to Hatchers and contributors, while assuming early post-upgrade TEC purchasers are mission-driven thus less price-sensitive.
Parameter
Value
Token Freeze
52 Weeks
Token Thaw
52 Weeks
Opening Price
1.5 wxDAI
Hatcher's TEC Release Schedule
This is the release schedule for TEC that was given to Hatchers. Their TEC will start out frozen and then slowly become liquid according to the graph above.
Token Release Timeline
Duration
% of Tokens Released
Price Floor of Token
3 months
0.00%
1.50 wxDAI
6 months
0.00%
1.50 wxDAI
9 months
0.00%
1.50 wxDAI
1 year
0.00%
1.50 wxDAI
1.5 years
50.00%
0.75 wxDAI
2 years
100.00%
0.00 wxDAI
3 years
100.00%
0.00 wxDAI
4 years
100.00%
0.00 wxDAI
5 years
100.00%
0.00 wxDAI
Module 2: Augmented Bonding Curve (ABC)
Strategy:
The 80% initial tribute makes us unabashedly an impact investment. Impact investors care about impact and don't want to pay to fund reserves to lower the volatility. Another effect of the low reserve is high slippage, which makes it expensive and thus unattractive for non-aligned, purely speculative whales to suddenly buy up large shares in ways that might harm the mission and the community. Impact investors will care less about slippage, since that money goes to the TEC, which they are backing for impact. Oh, did I mention it's a million dollar fund. Nice.
Yeah, 30% entry tribute is a big cut. But remember, we're an impact investment. We pitch that the 30% is an investment that they make in public goods and we take it off the top while they're still excited. There's no exit tribute. We get the investment up front, not when they're trying to get out and may have reasons for leaving anyway.
Plus we don't want contributors to have to pay a "tax" when they cash on their contributions of effort.
This proposal assumes that the entry tribute does not impact contributors (for at least as long are our initial buy-in rewards funding lasts).
A large tribute does create risk of arbitrage, so this proposal envisions restricting trading in secondary liquidity markets -- just for the first year, while we "fledge."
The ABC mints and burns TEC tokens, the price of the TEC token is dependent on the funds that is held in the Reserve. This graph shows how the ABC's Price for TEC tokens changes with the ABC's Reserve Balance. The Initial Buy that will happen at launch is highlighted.
Example Transaction Data
Tx
Reserve
Total Supply
Price
Amount In
Tribute
Amount Out
New Price
Slippage
0
252244.71
1956421.69
1.5
250000.00 wxDAI
75000.0
90652.31 TEC
2.43
22.30%
1
427244.71
2047073.99
2.43
5000.00 wxDAI
1500.0
1436.06 TEC
2.45
0.37%
2
430744.71
2048510.05
2.45
100000.00 wxDAI
30000.0
26686.38 TEC
2.81
6.74%
3
500744.71
2075196.43
2.81
3000.00 TEC
2507.24
5850.22 wxDAI
2.76
0.77%
4
492387.25
2072196.43
2.76
5000.00 wxDAI
1500.0
1261.98 TEC
2.78
0.32%
5
495887.25
2073458.42
2.78
100000.00 wxDAI
30000.0
23667.74 TEC
3.14
5.92%
6
565887.25
2097126.15
3.14
3000.00 TEC
2804.01
6542.68 wxDAI
3.09
0.76%
7
556540.57
2094126.15
3.09
100000.00 wxDAI
30000.0
21434.11 TEC
3.45
5.33%
8
626540.57
2115560.26
3.45
3000.00 TEC
3077.7
7181.30 wxDAI
3.39
0.75%
9
616281.57
2112560.26
3.39
1.00 TEC
1.02
2.38 wxDAI
3.39
0.00%
10
616278.18
2112559.26
3.39
100000.00 wxDAI
30000.0
19626.23 TEC
3.74
4.84%
11
686278.18
2132185.5
3.74
750000.00 wxDAI
225000.0
106709.38 TEC
6.29
23.89%
ABC Overview
Reserve (wxDai)
Supply (TEC)
Price (wxDai/TEC)
Market cap
10,000
1,482,482
0.08
116,402.42
50,000
1,702,366
0.34
581,763.01
100,000
1,806,866
0.64
1,163,464.67
200,000
1,917,785
1.21
2,326,873.83
300,000
1,985,799
1.76
3,490,265.05
400,000
2,035,514
2.29
4,653,670.95
500,000
2,074,933
2.80
5,817,088.55
600,000
2,107,705
3.31
6,980,491.80
700,000
2,135,818
3.81
8,143,886.79
800,000
2,160,472
4.31
9,307,262.70
900,000
2,182,456
4.80
10,470,676.89
1,000,000
2,202,311
5.28
11,634,128.39
1,250,000
2,244,959
6.48
14,542,585.34
1,500,000
2,280,418
7.65
17,451,143.24
1,750,000
2,310,834
8.81
20,359,649.36
2,000,000
2,337,510
9.95
23,268,198.19
2,500,000
2,382,776
12.21
29,085,132.03
3,000,000
2,420,412
14.42
34,902,207.18
3,500,000
2,452,695
16.60
40,719,184.36
4,000,000
2,481,008
18.76
46,536,273.73
5,000,000
2,529,054
23.00
58,170,336.16
7,500,000
2,618,748
33.32
87,255,183.29
10,000,000
2,684,312
43.34
116,340,669.46
15,000,000
2,779,513
62.78
174,510,739.74
20,000,000
2,849,101
81.67
232,680,998.49
50,000,000
3,082,566
188.71
581,701,782.79
100,000,000
3,271,805
355.59
1,163,406,122.26
Module 3: Tao Voting
Strategy:
My quick analysis of TEC Snapshot votes is that we've averaged 29% participation (by tokens, not people). We should be able to achieve higher than that, and should push for high community participation, on votes affecting our essential economic design.
These votes are on the longish side but given the types of votes we're making under TAO voting, I think we need more time for community evaluation and discussion.
Parameter
Value
Support Required
88%
Minimum Quorum
40%
Vote Duration
10 day(s)
Delegated Voting Period
5 day(s)
Quiet Ending Period
2 day(s)
Quiet Ending Extension
2 day(s)
Execution Delay
1 day(s)
Tao Voting Timeline From Proposal To Execution
This shows how the timeline stacks up for yes/no time based votes that can change the configuration after launch.
Timeline Data
# of Quiet Ending Extensions
No Extensions
With 1 Extension
With 2 Extensions
Time to Vote on Proposals
10 days
12 days
14 days
Time to Review a Delegates Vote
5 days
7 days
9 days
Time to Execute a Passing Proposal
11 days
13 days
15 days
Module 4: Conviction Voting
Strategy:
The 4% limit is designed to encourage milestones, and breaking projects up into smaller phases with deliverables that can be assessed by the community as they go -- especially in this first year. Assuming a million dollar pool, $40K should be the max and we want to encourage in one step.
At a conviction level of 3, funding proposals can be approved with 10X the amount requested sitting in conviction for one month. That sounds about the right flow and spend rate.
The bulk of the conviction matures within one month, which is perhaps a slower pace than we may have first imagined. But from the lens of Fledging, it is good to be deliberate as we learn to fly. We don't want to run out of funds too quickly. Conviction voting gets a lot harder when the pool shrinks!
Parameter
Value
Conviction Growth
14 day(s)
Minimum Conviction
3.0%
Spending Limit
4.0%
Minimum Percent of Voting Tokens Needed to Pass Funding Requests
This shows how the minimum percent of tokens needed to pass proposals after 2 weeks varies with the percent of the Common Pool funds being requested.
Token Freeze: 52 weeks, meaning that 100% of TEC tokens minted for Hatchers will remain locked from being sold or transferred for 52 weeks. They can still be used to vote while frozen.
Token Thaw: 52 weeks, meaning the Hatchers frozen tokens will start to become transferable at a steady rate starting at the end of Token Freeze and ending 52 weeks later.
Opening Price: 1.5 wxDAI, meaning for the initial buy, the first TEC minted by the Augmented Bonding Curve will be priced at 1.5 wxDAI making it the price floor during the Token Freeze.
Augmented Bonding Curve (ABC)
Commons Tribute: 80.00%, which means that 80.00% of the Hatch funds (1008978.86 wxDAI) will go to the Common Pool and 20.00% (252244.71 wxDAI) will go to the ABC's Reserve.
Entry Tribute: 30.00% meaning that from every BUY order on the ABC, 30.00% of the order value in wxDAI is subtracted and sent to the Common Pool.
Exit Tribute: 0.00% meaning that from every SELL order on the ABC, 0.00% of the order value in wxDAI is subtracted and sent to the Common Pool.
Tao Voting
Support Required: 88%, which means 88% of all votes must be in favor of a proposal for it to pass.
Minimum Quorum: 40%, meaning that 40% of all tokens need to have voted on a proposal in order for it to become valid.
Vote Duration: 10 day(s), meaning that eligible voters will have 10 day(s) to vote on a proposal.
Delegated Voting Period is set for 5 day(s), meaning that Delegates will have 5 day(s) to use their delegated voting power to vote on a proposal.
Quiet Ending Period: 2 day(s), this means that 2 day(s) before the end of the Vote Duration, if the vote outcome changes, the Quiet Ending Extension will be triggered.
Quiet Ending Extension: 2 day(s), meaning that if the vote outcome changes during the Quiet Ending Period, an additional 2 day(s) will be added for voting.
Execution Delay: 1 day(s), meaning that there is an 1 day delay after the vote is passed before the proposed action is executed.
Conviction Voting
Conviction Growth: 14 day(s), meaning that voting power will increase by 50% every 14 days that they are staked behind a proposal, so after 20 days, a voters voting power will have reached 75% of it's maximum capacity.
Minimum Conviction: 3.0%, this means that to pass any funding request it will take at least 3.0% of the actively voting TEC tokens.
The Spending Limit: 4.0%, which means that no more than 4.0% of the total funds in the Common Pool can be funded by a single proposal.
What is the overall Commons Configuration strategy?
After the Hatch, a bird needs to "Fledge" before it can fly. This proposal imagines a year of testing and learning that is heavily backed by impact investors before it eases into more market forces in year two, when the params would be significantly retooled.
FORK THIS PROPOSAL (link)
Summary
Module 1: Token Freeze & Token Thaw
Module 2: Augmented Bonding Curve
*This is an output. Learn more about the Reserve Ratio here.
Module 3: Tao Voting
Module 4: Conviction Voting
Module 1: Token Freeze and Token Thaw
Strategy:
A $1.50 opening price gives a nice discount to Hatchers and contributors, while assuming early post-upgrade TEC purchasers are mission-driven thus less price-sensitive.
Hatcher's TEC Release Schedule
Token Release Timeline
Module 2: Augmented Bonding Curve (ABC)
Strategy:
The 80% initial tribute makes us unabashedly an impact investment. Impact investors care about impact and don't want to pay to fund reserves to lower the volatility. Another effect of the low reserve is high slippage, which makes it expensive and thus unattractive for non-aligned, purely speculative whales to suddenly buy up large shares in ways that might harm the mission and the community. Impact investors will care less about slippage, since that money goes to the TEC, which they are backing for impact. Oh, did I mention it's a million dollar fund. Nice.
Yeah, 30% entry tribute is a big cut. But remember, we're an impact investment. We pitch that the 30% is an investment that they make in public goods and we take it off the top while they're still excited. There's no exit tribute. We get the investment up front, not when they're trying to get out and may have reasons for leaving anyway.
Plus we don't want contributors to have to pay a "tax" when they cash on their contributions of effort.
This proposal assumes that the entry tribute does not impact contributors (for at least as long are our initial buy-in rewards funding lasts).
A large tribute does create risk of arbitrage, so this proposal envisions restricting trading in secondary liquidity markets -- just for the first year, while we "fledge."
*This is an output. Learn more about the Reserve Ratio here.
TEC Price vs ABC Reserve Holdings
Example Transaction Data
ABC Overview
Module 3: Tao Voting
Strategy:
My quick analysis of TEC Snapshot votes is that we've averaged 29% participation (by tokens, not people). We should be able to achieve higher than that, and should push for high community participation, on votes affecting our essential economic design.
These votes are on the longish side but given the types of votes we're making under TAO voting, I think we need more time for community evaluation and discussion.
Tao Voting Timeline From Proposal To Execution
Timeline Data
Module 4: Conviction Voting
Strategy:
The 4% limit is designed to encourage milestones, and breaking projects up into smaller phases with deliverables that can be assessed by the community as they go -- especially in this first year. Assuming a million dollar pool, $40K should be the max and we want to encourage in one step.
At a conviction level of 3, funding proposals can be approved with 10X the amount requested sitting in conviction for one month. That sounds about the right flow and spend rate.
The bulk of the conviction matures within one month, which is perhaps a slower pace than we may have first imagined. But from the lens of Fledging, it is good to be deliberate as we learn to fly. We don't want to run out of funds too quickly. Conviction voting gets a lot harder when the pool shrinks!
Minimum Percent of Voting Tokens Needed to Pass Funding Requests
Example Funding Request Data
FORK THIS PROPOSAL (link)
Parameter Definitions
Token Freeze and Token Thaw
Augmented Bonding Curve (ABC)
Tao Voting
Conviction Voting
Advanced Settings*
*Learn more about Advanced Settings on the TEC forum
FORK THIS PROPOSAL (link)