As DAO is getting more and more attention there are duel-token models emerging in this ecosystem like POSDAO. Along the way, we realize that the governance token is taking too much responsibility more than securing the system. The heart of the decentralization is the token. Therefore it is time to think about a better way to utilize tokens’ functionalities in the DAO ecosystem.
Here is a new idea of the triple-token model for DAO in plain words without any deep theory or complex formulas:
Triple Token Design
GT - Governance Token(ERC20);
FT - Fuel Token(ERC20);
RT - Reputation Token(ERC721);
This will be the governance token to manage DAO’s activities through voting. Mostly the vote happens off-chain and the result is enforced on-chain afterward. There are many such tokens in the blockchain DAOs and we will not go more into this.
This token is the motivation factor for all participants to collaborate in DAO including contributors, community members, partners, and investors. It should be listed in as many exchanges as possible to enable owners to get incentivized via exchange. It will be distributed according to proposals governed by GT voting based on the contributions to the DAO.
This is a new role in DAO powered by NFT. A good reputation system will secure and empower DAO in a very efficient way. It is a challenge to build a reputation system while considering privacy and security. But with the help of NFT and Tokenscripts, it will be much easier to build a decentralized reputation system in a secure and private way. GT will govern the policies and standards that define certain levels of reputation. Also, it grants what privileges each level could have. And of cause GT has the right to revoke any RT through the defined voting governance process. With this token, the owners could have access to different resources in DAO based on the token level. They may have the right to join the corresponding disputes resolution board based on their RT levels. They will be able to receive higher FT by contributing to DAO - this will motivate contributors and community members to grow themselves with financial incentives together with DAO. Basically, this should be untransferrable but since it is transparent to the public the whole community would be able to monitor its behavior and therefore the normal NFT would be good enough if we build a community-run monitoring system.
GT & FT
GT initiates mint and distribution of FT based on the approved proposals. FT staking smart contract provides GT rewards - this means the community members are incentivized to join DAO governance by having their FT staked. Voting with GT will receive FT as the reward for governing DAO.
GT & RT
GT initiates mint and distribution of RT based on the approved proposals. RT owners will receive GT constantly based on approved proposals - this means reputable members of DAO are incentivized to join DAO governance and they are entitled UBI in GT.
FT & RT
A certain level of RT will be awarded to those who burn FT at a certain amount constantly defined by the approved proposal governed by GT. This is to recognize the members who help to stabilize FT markets which bring financial gains for contributors and members of DAO.
We will start to implement these tokens in part 2 and smart contracts connecting them in part 3.