Staking in dxDAO

[lrettig]

dxDAO is launching in a few days and it's in a bootstrap period right now where you can stake ETH or other tokens to gain reputation when the system goes live. It's a pretty exciting DAO and I think we should study it and participate in it to learn from it. We currently have 29,000 DAI in our multisig. I propose that we stake it for 30 days to gain reputation points in the new DAO. Here are the concrete steps:

1. Create a new Gnosis Safe account - I believe these can be shared among several people
2. Transfer DAI from the multisig into it
3. Use it to stake in dxDAO
4. 30 days later, claim the tokens back

Thoughts?

[timbeiko]

@lrettig Interesting proposal. A few questions:

• Where are the 29,000DAI from? The ProgPow audit?
• What is the goal of having the new Safe account? To create a proper ECH "reputational" account?
• Given the smart contract bug risk, does it make sense to only stake part of the funds?

Obviously, before taking such a decision, we should definitely air it on an ECH call. When is the deadline to stake on dxDAO?

[lrettig]

Where are the 29,000DAI from? The ProgPow audit?

Most of it is, the rest is just the ordinary funds we collect via the Gitcoin subscription.

What is the goal of having the new Safe account? To create a proper ECH "reputational" account?

Yes, since reputation is tied to an account and cannot be transferred, we want it tied to an account that we can share, like the multisig. My understanding is that this is precisely what the Gnosis Safe is designed for.

Given the smart contract bug risk, does it make sense to only stake part of the funds?

This risk always exists. I think @Souptacular needs to weigh in on this.

Obviously, before taking such a decision, we should definitely air it on an ECH call. When is the deadline to stake on dxDAO?

For sure. We have seven days left (https://dxdao.daostack.io/stake-for-your-vote).

[timbeiko]

Thanks! Let's add this to the agenda for the next call and act fast afterwards if we have agreement. It'd be great to have you on the call, @Souptacular, if you are available :-)

[wschwab]

I'm concerned about the ethics of staking funds specifically given for the audit. I feel like funds given towards a specific task should only be spent on that task. As for the other funds, though, I'd say it's fair play.

[lrettig]

I feel like funds given towards a specific task should only be spent on that task

I agree with this - and I'm not proposing spending, only staking. We'd get the funds back :)

(Yes, there is always a risk associated with a new DAO, but the code in question has been audited. We don't have to stake 100% of the funds.)

[lrettig]

Let's add this to the agenda for the next call and act fast afterwards if we have agreement

Gas prices are likely to shoot up quite high in the final day or two of the staking period - it would be better to make this decision earlier, if at all possible. Maybe we could do a vote on the Aragon DAO or something? :)

[wschwab]

I agree with this - and I'm not proposing spending, only staking. We'd get the funds back :)

I should've been more specific - I mean that I don't think the funds should be used in any way other than their allocated purpose. Staking, even if it will be returned, is not what the funds were explicitly given to the Cat Herders for. I personally feel like we're banking with other people's funds, even if it's for non-financial investments (using the funds to invest in reputation).

[timbeiko]

Gas prices are likely to shoot up quite high in the final day or two of the staking period - it would be better to make this decision earlier, if at all possible. Maybe we could do a vote on the Aragon DAO or something? :)

IMO it's probably better to pay a few dollars extra in gas over doing this in a rushed / non-consensus way. Clearly, at least @wschwab has concerns, and I think we want to align before taking that decision, even if it costs a few more gwei 😅

[brianventuro]

It would be extremely inappropriate to use funds that we contributed for the ProgPoW audit for anything but the ProgPoW audit. That is not money that we allocated to be used in testing your staking model.

[lookfirst]

Those funds are intended to pay for auditing that was supposed to already have started. There hasn't been clear communication at all about the status of the audit.

This idea borders on embezzlement of funds, which is totally inappropriate! Who cares if you get it back, this isn't your money to use for these purposes!

[sneg55]

I'm concerned about the ethics of staking funds specifically given for the audit. I feel like funds given towards a specific task should only be spent on that task.

+1. It sounds unfair that you are going to use the money raised for audit(while audit not even started)

[donamelo]

you have proven that the ethereum democracy is not existing. a group of technocrates doing what they want and calling it decentralised.

[jean-m-cyr]

you have proven that the ethereum democracy is not existing. a group of technocrates doing what they want and calling it decentralized.

Only additional proof... the technocracy has been fairly obvious for some time now! The main reason I've given up on ETH.

[ghost]

@lrettig - what is your link to DxDAO? Why this one, of the many experimental "investment" DAOs?

[lrettig]

No link! It's the only interesting dao I'm aware of that has staking happening now! Please let us know if there are others we've missed.

[ghost]

DyDx, Compound, MakerDAO, and Dharma quickly come to mind as smart-contract based platforms that allow interest to be earned for lending out cryptocurrency, and should fit your definition of a staking DAO. /r/ethtrader, I'm sure, has plenty of other money-earning schemes.

[lrettig]

Hi @consciousEntity, thanks for the feedback and ideas. I think you may be misunderstanding dxDAO -- please take a look at its whitepaper here: https://github.com/gnosis/dx-daostack/blob/master/dxdao-whitepaper-v1.pdf. It's not a for-profit project and no "interest" is paid. Staking/locking funds does not pay any interest or tokens, it just gives you a share of (non-transferrable) "reputation" that lets you participate in the DAO. The Cat Herders has no interest in "money-earning schemes."

[ghost]

@lrettig - Apologies, I had not looked into dxDAO in detail. Does this not highlight a fundamental weakness with this type of application - a treasurer-type entity (such as the trusted keyholders for a multisig) can earn significantly more "reputation" than their real-world status would imply, by misusing funds they are managing for other purposes (and which do not belong to them)?

[timbeiko]

From today's call, a decision was made to not stake using the ProgPow funds, but to try staking with the rest of the ECH funds, which had been donated to the Cat Herders without any specific mandate.

[lookfirst]

Where did the funds come from? Asking for a friend.

[timbeiko]

@lookfirst from Gitcoin donations, listed here: https://gitcoin.co/grants/30/ethereum-all-core-devs-community-project-managem-2?tab=contributors

[lrettig]

Just submitted a tx to the multisig to transfer 100 DAI from it to the Gnosis safe @DBrettRobertson and I set up: https://etherscan.io/tx/0x023b0e5b13c28713b9c03f93b24e1010fa2917266af1885c6fc327894ac369d6. Needs one more confirmation to process.

[lrettig]

@DBrettRobertson got this to work using a new Gnosis safe account (https://etherscan.io/address/0x05bff578e1c11657e0d8b859f1e848c2b92cd65c) that Brett and I set up. (Gnosis Safe does not support "team mode" yet so for now it appears the only way to share one is by sharing the private key.)

[timbeiko]

@lrettig should we close this issue?

[lrettig]

I think we need to claim the stake back!

[edsonayllon]

If you staked correctly (up-staked a passing proposal, or down-staked a failing proposal), you should be able to redeem using the current UI. It's the star symbol in the upper right corner. It should return any GEN staked, as well as reward you with reputation in the DAO.

---

Edit: Sorry, didn't see stake was made with a multisig contract. Here's the source code of the app dxDAO is on, which may be helpful for creating the multisig transaction: https://github.com/daostack/alchemy.

[timbeiko]

@lrettig can you create a multisig txn to reclaim the stake?

[lrettig]

Sure, I'll give it a shot

[timbeiko]

@lrettig friendly ping :-)

[lrettig]

I spent a while on this today. I was able to boot up the gnosis safe account, and use it to log into Alchemy:

However when I click on the star symbol, there's nothing to redeem:

@edsonayllon to be clear, we're not trying to redeem GEN from up- or down-staking a proposal. We sent DAI as part of the initial reputation generation event for dxDAO (here's the tx: https://etherscan.io/tx/0x115c71ecc2c9bf0868ef06e28292d25b6ad48d98389c839c05974363f4096625) and we need to claim that back. I don't see an interface to do that. Do you know how we can do this?

[lrettig]

It appears that the right interface for doing this is https://dxdao.daostack.io/stake-for-your-vote. However, this UI does not appear to recognize the Gnosis Safe browser extension, and I can't find any way to use the Gnosis Safe mobile app as a web3 browser:

[lrettig]

There are some more related docs here: https://github.com/gnosis/dx-docs/blob/master/source/dxDAO.md

[edsonayllon]

@lrettig Oh, ok. I asked the devs at DAOstack, and asked in the dxDAO chat. I'll post here if I get a response. Meanwhile, you can try using Gnosis Safe mobile app to connect on your desktop using Wallet Connect. https://walletconnect.org/ https://blog.gnosis.pm/the-gnosis-safe-now-has-a-wallet-connect-integration-61000b098657

[edsonayllon]

From Doug Kent, who led dxDAO development on DAOstack:

make sure you have enabled dxDAO as an app that Safe can talk to (in the Safe interface)

[edsonayllon]

You can contact Doug on Telegram (dkent) or Gitter (dkent600) with more questions, to sort this out.

Also, there's a group on Telegram for DAOstack that may be of some help, Doug is on there, along with others who may be more available. Message me on Gitter, and I'll add you to the group in Telegram.

[Souptacular]

Will approach this again after the holidays.