In a previous article, we introduced an overview of the Kambria DAO model as a way for the community to co-own a technology.
|Co-owning technology via Kambria DAOs|
A DAO (Decentralized Autonomous Organization) is a community using blockchain to facilitate decentralized autonomy. The control is spread out among all community members who use governance tokens to vote on DAO’s rules or changes, voting power is equivalent to the number of tokens they possess. By this, we can empower the community with trust, transparency, and automation, and enable open-source solutions to be commercialized by their community.
Each Kambria DAO is started by a Dev Team submitting their proposal with a solution of technology they can develop and open for the community to co-own.
The community collectively buys into the solution by participating in the DAO. Then Dev Team starts to develop the solution and the development progress will be managed monthly.
The DAO as owners of the solution will decide and contribute to the commercialization of the solution, as well as get paid for their contribution.
Please check this page for a more detailed model and FAQs of Kambria DAOs.
This time, let’s look further at how to implement that model, using XDAO as a platform for DAO creation and management.
LP (Liquidity Provider) token
Understanding XDAO’s LP token
LP token is an ERC20 standard token representing a financial interest in the organization.
LP tokens are used to track individual contributions to the DAO treasury, as LP tokens held correspond proportionally to the share of liquidity in the DAO treasury.
By purchasing DAO LP tokens, you have a proportional part of the whole DAO assets:
DAO AUM / Circulating Supply of LP Tokens = Value of 1 LP Token
You can purchase DAO LP tokens via private offers or public offers. A private offer gives an opportunity to buy only a certain number of LP tokens to a certain user. The public offer allows an unlimited number of users to buy an unlimited number of tokens.
In case you want to withdraw your fund, you can burn your LP tokens and get all DAO assets proportional to the share. As a result of the burning, the shares in the DAO will be redistributed among the rest of the participants, and the one who burned his/her share will receive all selected tokens.
Kambria DAO’s fundraising approach with LP token
Variable supply would be more suitable for Kambria DAOs in the early phase, to allow possible changes and improvements until we reach the optimized model.
- We will run a round of Private offers for big investors and then create a Public offer for the community to participate.
- The average fund goal is $3M and the number of DAO LP tokens to be issued is 10M. So LP token price is 0.3$.
- The currency to buy LP tokens is KAT. The rate 1 LP = XX KAT would be determined by KAT price at the time the Public offer opens. For example, if KAT price is 0.03 then 1 LP = 10 KAT.
- We can start the Development phase when the fund raised passes 50% of the target.
As per common practices, withdrawals will be limited in the first two years to reduce risks in the solution development phase.
There are 2 mechanisms to do this:
- Disable LP burning: available option currently supported by XDAO.
- Vesting: in the XDAO development plan, or could be developed by the Kambria team as a module integration to the XDAO platform. Vesting quarterly for 2 years would be a standard process.
Note that XDAO supports multiple blockchains, but since a DAO can only be on one blockchain, we will choose to go with ETH or BSC for each DAO.
GT (Governance Token)
Understanding XDAO’s GT
GT is a non-transferable ERC20 token representing the member’s voting power in the DAO. They have no price, only voting power.
All wallets with GTs have access to DAO and can create any proposals. GTs are strictly tied to the wallets of DAO members.
The quorum determines how many tokens are needed to activate any vote in the DAO. Governance tokens in total represent 100%.
Governance tokens cannot be sent to another wallet by direct transfer. If a DAO member decides to leave the project, that DAO member needs to initiate a vote to transfer GT from his wallet to another.
Kambria DAO’s governance approach with GT token
Our considerations when designing a governance model for Kambria DAOs:
- Since Kambria DAOs are for businesses, from developing technology solutions to commercializing them, the governance model needs to balance the perspectives of members contributing money and members working for the DAOs.
- Have the mechanism to find the right representatives to make decisions for the DAOs.
- Allow to make decisions fast (and correctly).
- Allow Kambria as the Organizer / Architect to be able to orchestrate the development of the Kambria DAO model in the early stage, and gradually move backstage when the DAOs are in stable operation.
With that in mind, we would like to implement the governance model for Kambria DAOs as below:
1. Among DAO members who hold LP tokens, we will select representatives to join the DAO Council to make decisions for the DAO (GT holders).
2. The total of governance tokens of a DAO is 1000. But not all 1000 GTs will be minted at the DAO creation. Whenever a new member joins the Council, GTs are minted and issued to him/her accordingly.
3. Quorum is 70%: any vote in the DAO needs 70% GTs (of total GTs minted at that time) to activate.
4. 40% (400 GTs) will be allocated to big fund contributors ie. LP token holders.
- Every investor holding at least 5% LP tokens will join the DAO Council (max 20 members).
- The GTs they have will correspond to their LP tokens, with each 1% LP token owned equal to 4 GTs. For example, an investor contributing a 5% DAO fund will have 20 GTs.
- The GTs they have will be synced with their current LP tokens (automatically or manually every quarter). For example, if they burned a part of their LP tokens to withdraw a part of their fund, their GTs and voting power will be reduced accordingly.
5. 40% (400 GTs) will be allocated to active LP token holders in terms of their participation in DAO businesses.
- We will implement a point reward system for DAO members to accumulate points each time they participate in DAO activities (inherited from the Kambria Credit system on the Kambria platform).
- Top Active Members (with the most points accumulated in Year X, forming the group of Year X) will join the DAO Council for the 1-year term of Year X+1, with GTs transferred from the group of Year X-1.
- Each member of this group will have 4 GTs equally (max 100 members).
- Note that this group should be diversified by locals and expertise to be the country leaders of the DAO hubs (for local production and commercialization…), which could become subDAOs in the later phases.
6. 20% (200 GTs) will be allocated to Kambria as the Organizer / Architect to orchestrate the development of the Kambria DAO model in the early stage.
Development work management
As per Kambria DAO model, the development progress will be managed monthly:
- At the end of each month, the Dev Team submits the release and presents their report.
- Their work will be reviewed and approved by a Judge Committee of 5 DAO Council members which must have 2 Technical experts. If there are no Technical experts in the DAO Council yet, we will invite Guest Technical experts instead.
- Then the development fund will be distributed to the Dev Team accordingly.
Dev Team submits their work to the DAO, including source codes, demos, documents, and presentations.
The submissions will be packaged and tokenized as IP NFTs.
The Judge Committee reviews the submissions by providing feedback and scores, similar to the framework used in Kambria Challenges.
The Submission and Evaluation modules will be developed by the Kambria team to integrate into XDAO (similar to Starter Program’s features on Kambria platform).
Proposal submission and discussion
In the commercialization phase, the DAO community can submit proposals for marketing and business development initiatives on DAO’s Discord channel.
Not only DAO members but also external partners can submit proposals and join the open discussions.
Bidding and voting
We can call for more proposals from other teams to bid so that we could select the best team for the implementation.
Then the DAO Council will vote to execute the proposal and choose the team to do it.
Proposal implementation will be managed monthly similar to the development phase.
Or they will be managed by smart contracts with specific terms to be defined in the contracts, similar to traditional businesses.
Similar to traditional business contracts, DAO will create smart contracts for the products and services we provide.
We can track the financial transactions of the DAO via those smart contracts.
As per Kambria DAO model, Kambria DAO LP tokens are Revenue Sharing Tokens which will bring more benefits for DAO members due to:
- The clear relationship between DAO’s commercial success and the token value, and
- Pre-defined income stream to token holders in the sense that token holders will be rewarded instantly at the time of recording revenues.
To implement this model on XDAO:
- We can apply the modules of Dividends or Transaction automation that XDAO is developing.
- Or Kambria team will develop this module to integrate to XDAO, similar to the revenue sharing feature of Knowledge Base on the Kambria platform.
The implementation of the Kambria DAO model on XDAO will need some module integrations, but those are feasible. Kambria’s team will work on these module development and integrations, and we will share updates with the community along the way.
We understand that it would take some time and effort to improve and optimize the Kambria DAO model.
Join us to make this vision become reality. And if you have any questions or suggestions, come discuss them with us in the Kambria Discord community.