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Aragon Nest Proposal: BridgeDAO #84

Closed tomislavmamic closed 5 years ago

tomislavmamic commented 6 years ago

Aragon Nest Proposal: BridgeDAO

Abstract

DAOs face issues interacting with world beyond blockchain, eg. transacting with fiat currency. The reason lies in the general incompatibility of two systems, blockchains and the physical world. This incompatibility extends to virtually all cases. Fiat transactions are the simplest and most impactful example of operating with physical world. None of the established interfaces on either side are sufficient for the interaction of DAOs and traditional financial institutions without either of them losing some of their key properties. Finding a solution which doesn’t break the rules of how these systems operate would unlock the huge potential of DAOs.

Here we explore the possibility of such a solution - called the bridge DAO. It is a concept of a DAO whose sole purpose is the ability to reliably interact with the physical world. Rather than being premissioned and legally entrenched (and thus breaking the core of it being a DAO), bridge DAO uses tools of decentralization, cryptography and economics for achieving this goal. The idea is that DAO can reliably enforce its decisions over any sufficiently collateralized physical actor. These actors can be final users, but they can also serve as proxy services. More information on this concept can be found here: Collateralized DAO Proxy Services as an Aragon Network use case - Economics - Aragon Research

Any DAO can easily use any established Bridge DAO to interact with the physical world. Any developer can use the original Bridge DAO code to deploy their own special-use bridge DAO to meet the needs of the market. This lack of barriers of entry creates opportunities for entrepreneurs on many sides, but also enables market efficiency, exactly what Aragon Network stands for.

We propose building the first implementation of Bridge DAO. It would explore the viability of the concept within a narrow use case of fiat transactions. Tackling this problem would have the biggest impact and is the easiest to overcome, but the problem is basically the same with any other use case. A solution built for this problem should be applicable (with certain adjustments) to other physical assets.

The ability to reliably operate with fiat is important for Ethereum mass adoption because most users and businesses earn, transact and save in fiat. Besides Ethereum growth, DAOs and cryptocurrency transacting businesses present significant opportunities for entrepreneurs and should be kept out of the reach of governments and banks with conflicted interests.

The first Bridge DAO implementation used for the specific purpose of prototyping, called Paperclip, is built for providing a trustless, cheap, fast, and real-time interface for managing fiat currency. Paperclip can be described as a 2nd layer solution on top of the traditional banking system. It provides an incentive mechanism for anyone to perform fiat transactions on behalf of its users.

Deliverables

  1. Documentation (technical, economical, legal)
  2. Proof of concept A minimal viable system with following participants:
    • Node - IBAN account holder, executes transactions on behalf of the Coordinator
    • Coordinator - DAO, facilitates all the transactions, collateral and fee payouts
    • User - user of services, transacts with other users or DAOs
    • Services - banks, provide platform for fiat transactions for a fee
  3. Alpha version The software suite consisting of Dashboard, Analytics, Consumer, Whisperbook, Watcher, Ramp and Ping.

Grant size

Funding: Up to $100k in ETH, split into chunks paid out over achieved deliverables.
Success reward: Up to $50k in ANT, given out when all deliverables are ready.

Application requirements

  1. A technical whitepaper
  2. High level overview of Paperclip
  3. Details of the team members
  4. Budget
  5. Roadmap
  6. Legal structure to be adopted: not sure yet

Development timeline

The development timeline will be the following one in regards to each deliverable:

  1. Nov 2018: Documentation (technical, economical, legal)
  2. Feb 2019: System Link, User Link, First accounts testing the system, PoC
  3. Apr 2019: Ropsten, Ramp app, Analytics, Dashboard, Suite combination on VM
lkngtn commented 6 years ago

The whitepaper and overview documents are not currently accessible do to restrictive permissions.

tomislavmamic commented 6 years ago

Sorry about that, all documents are accessible now.

tomislavmamic commented 5 years ago

We moved most of the documentation into this repo: https://github.com/bridgedao/org

mariapao commented 5 years ago

Hi @tomislavmamic thanks for submitting your proposal.

We have reviewed and our main concern of course is the legal part. I honestly think this system is going to have the same legal issues that we currently have. You say the service is jurisdiction agnostic but I don't really understand why? Could you guys give us a more detailed view of the legal part of the project?

tomislavmamic commented 5 years ago

Hey @mariapao, can you shortly describe problems you are facing? We have a lawyer in our team with whom we have been talking about this since the inception (it actually was his initial idea to use nodes) so I'll talk with him to put our thoughts into one coherent answer.

mariapao commented 5 years ago

@tomislavmamic that would be great! I'm referring to the AML/KYC aspect

tomislavmamic commented 5 years ago

Hi @mariapao here is our latest iteration on the project: Paperclip Lite https://github.com/bridgedao/org/blob/master/Paperclip%20Lite.md Here is current legal opinion (in a comment): https://github.com/bridgedao/org/issues/10

mariapao commented 5 years ago

Hi @tomislavmamic after the review of the project and the discussions about it, we have decided not to approve this proposal. The access to fiat and, in general, to the traditional financial infrastructure by DAOs, is certainly something very good for the DAO ecosystem. However, there are other priorities in terms of infrastructure and applications for the project right now, and we prefer to focus the resources on those things first.

Thank you very much for the work you put into the application. We really appreciate it!

tomislavmamic commented 5 years ago

Hey @mariapao, thank you and to the rest of the team for considering our proposal and helping us during the process. We have gone a long way from the initial idea, and you gave us a lot of useful advice and information. I hope that when we build this, Aragon will use it. Cheers! :)

GriffGreen commented 5 years ago

I am excited to see this project become a reality... give it a few more months and there will be DAOs with this problem... and then it will be easier to really see the use case for this... Giveth could benefit from this, for the most part, we have found other work arounds... but this would definitely be a nice tool to have

tomislavmamic commented 5 years ago

I have another company that I would love to incorporate as Aragon entity or a DAO and the reasons I can't do it are

@GriffGreen we are still looking for funding and help to build this. If Giveth could help, even if it's just feedback, it would be great!