#1 | dYdX Operations subDAO Update 2024

Governance/DAO Discussions
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Summary

In the first couple of months of 2024 the Operations subDAO was able to launch the iOS app and prepare everything from an operational and legal perspective for the Android app launch, for more details on statistics and achievements read our latest blog.

The community has approved the change in the DOT’s trusteeship which was finalized this week. Finally, in early February, the dYdX Operations subDAO held its offsite, planning and prioritizing for 2024, and discussing the strategic direction of the subDAO.

iOS App

On the 2nd February 2024 we were able to deploy the dYdX Chain iOS application enabling the first mobile trading experience on the dYdX Chain. Since its launch, the application has been downloaded by more than two thousand people, which is steadily growing.

The application is particularly popular in the following markets: :czech_republic::denmark::estonia::finland::fr::de::india::jp::macedonia::new_zealand::portugal::romania::ru::singapore::es::switzerland::taiwan::ukraine::vietnam:

If you haven’t downloaded the App yet, this is the official link, you can easily log in by connecting the mobile application via QR code to the web frontend, watch the video below to learn how or visit the following link (for better quality).

Legal setup for Android App

As we were preparing for the launch of the Android application we noticed that Google Play Developer accounts are not available to Companies that are registered in the Cayman Islands.
For us, the best solution for this blocker was to incorporate a subsidiary in Panama, as it is a crypto-friendly jurisdiction and accepted by Google. The dYdX Operations Services Ltd. now has a wholly owned subsidiary in Panama called dYdX App Services Inc. which will be the deployer of the Android application.

The following diagram shows the current legal structure of the dYdX Operations subDAO

Structure Overview
Structure Overview1920×1549 65.8 KB

DOT trustee update

After the successful governance proposal 14 the change of the trusteeship of the DOT has been finalized with the execution of the instrument of appointment and retirement the updated Trustee list now (effective March 1st) is:

  • Areta.io (Web3 Studios GmbH)
  • Christoph Sonn
  • Joanna Pope Consulting Pty.
  • Shaun Musuka
  • Valentin Prossliner

Hiring

We are still looking for a Technical Associate ( Entry/Mid-Level SRE) if you have some of the experience we are looking for and want to join us please send an email to hiring@dydxopsdao.com.

2024 Priorities

In early February we held a number of internal workshops, stepping back as much as possible from the day-to-day operations and looking at the bigger picture. We identified areas of improvement for ourselves but also for the ecosystem, this is where we want to focus our efforts in 2024. We will share a strategy statement soon, exploring in more detail what our priorities in the upcoming 12 months will be.

Short-term Outlook

In the short term, we are working hard to enable a smooth update to v4 of the dYdX Chain code. We are looking forward to the Android application launch. Additionally, we are planning a revamp of the legal structure of the dYdX Operations subDAO disentangling the legal setup somewhat and streamlining the operations significantly, but we will share more on this in an upcoming DRC.

dYdX Ops subDAO

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Positive Progress from dYdX Ops subDAO

Great update! Highlights for me include:

  • iOS Launch Success: Impressive download numbers and global reach.
  • Android Preparation: Proactive solution to Google Play restrictions shows initiative.
  • Trusteeship Finalized: Strengthens DOT governance.
  • 2024 Vision: Looking forward to the strategy statement and focus on ecosystem improvements.

Questions:

  • iOS Metrics: Can you share retention rates and trader feedback?
  • Android Timeline: When can we expect the app release?

Overall, the subDAO is moving in the right direction. Keep up the great work!

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Couple questions, comments - statements. Mainly before posting a forum post I found this, but still need clarity.

What are the financials and expectations of the identified orgs here? I’m guessing the dydx DAO at the top isn’t a formally organized entity.

Structure Overview
Structure Overview1920×1549 65.8 KB

Background

I’m new to the DYDX product so I don’t feel my praise really does justice to the time y’all’ve been building iterations of this product, nor do I know what roadmap is laid out for the long-term strategy - other than, most are open to entertaining options.

I’ve read that you’re making the platform a general purpose smart contracting platform and adding additional features like vaults so on and so forth.

I don’t know what kind of legal structure DYDX or a community DAO operates under. I’d suggest a legal formation if it doesn’t already exist and adhere to compliance in whatever jurisdiction is fitting.

I’m guessing this is the wallet of the community pool because it has all the stDYDX. This should be receiving 2.5% of the USDC every six hours from Stride based on their proposal, but I don’t see any USDC in the holdings.
Portfolio

That said - just some general counsel and to present things from MakerDAO that I fundamentally recognize as strategies that are productive and innovative in building DeFi/TriFi synergies, and that has some parallel to DYDX.

MakerDAO:

MakerDAO had 10.5bn USD collateral pool that includes non-yield bearing USDC stablecoin, the DAO’s strategy was to earn positive returns and further strengthen the balance sheet. A company called Monetalis proposed to the Maker community a USD half-billion (500M) diversification into traditional assets.

Maker Endgame is underway.

As we ramp up for the Endgame launch season, here’s what’s on the horizon:

  • New Brand Identity: MakerDAO is unveiling a new brand identity that makes saving with stablecoins fun and simple. It promises easy access to innovative tokens without additional risk, embodying our core principles in a fresh, engaging way.

  • New SubDAOs: The introduction of new SubDAOs will mark an expansion in our ecosystem. These autonomous, flexible entities built on MakerDAO’s robust infrastructure will cater to various interests, allowing users to choose their preferred SubDAO and start farming its unique tokens.

  • New Tokens: A month after our brand reveal, two new tokens will be launched - NewStable and NewGovToken. NewStable aims for mass adoption, offering a new way to engage with our ecosystem, while NewGovToken provides upgraded governance features, allowing MKR holders to convert their tokens at a significant multiplier.

  • AI Tools: To streamline the governance process and enhance user interaction, we’re integrating advanced AI tools. These will simplify decision-making and allow members of all experience levels to contribute to the governance of SubDAOs.

  • Governance Participation Rewards: The Lockstake Engine will reward long-term governance participation. By locking MKR and NewGovToken, participants gain increased exposure to risks and rewards and a stronger influence over governance decisions. Additionally, 30% of all protocol surplus will be redistributed as NewStable rewards to active governance participants.

  • New Blockchain: Looking ahead, Phase 3 will introduce NewChain—a dedicated L1 blockchain designed to host our core tokenomics and governance mechanisms. This platform will support the scalability of the SubDAO ecosystem and facilitate the integration of real-world assets, DeFi, and inter-blockchain bridging.

  • NewBridge Launch: Alongside the Lockstake Engine, the first version of NewBridge will launch, seamlessly connecting NewStable, NewGovTokens, and other Maker Ecosystem tokens from Ethereum Mainnet to a major L2 network (TBD). This will significantly reduce transaction costs and enhance accessibility, paving the way for expanded token farming and usage.

This is just the beginning.

The future of MakerDAO and the vast potential of the Endgame strategy are poised to redefine our trajectory, aiming to scale the Dai supply to 100 billion and beyond.

Thoughts

I caught the MakerDAO 2022 press release when it was fresh off the press, and the current press shows they have a pretty solid roadmap.

Obviously the L1 chain has a lot of resemblance to DYDXs current pivot. There’s ways to grow the community pool and to also diversify it’s funds, 90% of fees are returned to users in DYDX tokens right now for one. Without increasing the fees - if 50% of those fees went to the community pool that would start building a community chest poised for growth.

Over 20M in fees to date. 10% goes to stakers in USDC and 90% returned back to traders in DYDX if I’m not mistaken.

Screenshot 2024-05-02 050430
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Weekly Fee Performance

Screenshot 2024-05-02 050050
Screenshot 2024-05-02 0500501149×463 51.8 KB

These analytics are all from datalens.

As far the whale wallets and maintaining long-term price integrity - post bullrun ect…if the owners of those wallets need working capital, just way over collateralized a stable-coin mint - like 300% or so - don’t dump them on the open market.

In this scenario at a $2.00 price to mint $1 - 1.5 DYDX tokens would be held in collateral for $1. This is a buffer to hedge agaist liquidations.

Burning tokens with a buy back program would over time increase the value of the over-collateralized assets - in turn providing an opportunity to adjust positions accordingly.

There is also the community owned stDYDX to the tune of $40M that can be over-collateralized in the same way. It’s should be apparent why price integrity and a healthy buffer would be important. Those funds being liquidated wouldn’t be ideal.

The risk on how the funds are used require a similar scrutiny. Using the same 300% over-collateralization that would be about $14M in investable capital. It’s not a $10.5bn community pool like MakerDAO, but it’s a start.

Summary

Community feed back and discussions that require attention

  • Legal structure for DAO operations
  • Feelers for fee alteration/distribution to community pool
  • Product ideas similar to MakerDAO
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I found the blog post that explains the legal structure clearly and in detail. Nice to see the professionalism. Legal Framework for Non-U.S. Trusts in DAOs | dYdX Foundation