BIP-14: Updated Parameters and Initiatives

This proposal is authored by Ben of Bybit Link to original forum post

Context

This proposal has been inspired by community feedback regarding: 1) the pathway for decentralization of $BIT holdings and reduction of total supply; and 2) a focus on building and user adoption.

Proposal

Parameter Updates

1. The Contribution Asset Mix shall be changed to 100% $BIT starting 2022 September 16th.
2. Contributed $BIT shall be burnt (by sending directly to the nominated burn address).
3. Target Daily Purchase Amount (TDPA) shall be paused from 2022 September 16th.

New Initiatives

4. Bybit shall bootstrap the R&D and go-to-market of BitNetwork (temporary name).

Additional Information

Commentary on Parameter Updates

Based on strategic needs, the parameters (Contribution Asset Mix, Burn, and TDPA) can be dynamically adjusted via proposal for strategic needs. Factors to consider include:

Burn and Decentralization Decentralization of $BIT holdings is required for the long-term security of BitNetwork, and governance function of BitDAO. We can kick start this process by Bybit contributing and burning $BIT.

Use of Funds The current BitDAO treasury holds ~$1bln of non-$BIT assets, and 3bln+ $BIT units — which is sufficient to fund existing ecosystem partners (e.g. Game7 and zkSync / zkDAO, etc.) as well as a handful of new large initiatives. Going forward, we recommend that BitDAO is highly selective with new initiatives, by applying a “flywheel for growth” mentality, and prioritizing synergies with BitDAO ecosystem partners from a user and technology perspective.

More on BitDAO x Infra

As a follow-up to the original forum post

BitNetwork (temporary name for BitDAO Protocol) will be a suite of Ethereum scaling solutions including an optimistic rollup and zk rollup built using an iterative modular chain approach, and supported by BitDAO’s native token $BIT. More details will be provided shortly.

It is designed to bolster support for high throughput decentralized applications (dApps) — from decentralized derivatives exchanges (DEXs) and gaming, to operations of decentralized autonomous organizations (DAOs).

Immediate go-to-market advantages include synergies with BitDAO ecosystem; and synergies with Bybit users, distribution networks, relationships, and exchange onramps. To accelerate the timelines for BitNetwork, Bybit will commit people and resources to bootstrapping: global R&D efforts (including core protocol development, protocol research, user portals, developer portals); and go-to-market efforts (grants, accelerators, ecofunds).

$BIT, BitDAO, and BitNetwork

$BIT will represent: the protocol value of BitNetwork, value and governance control over the existing BitDAO treasury and initiatives, exposure to BitDAO ecosystem partners, the Bybit contribution, and continued use cases across on-chain and off-chain platforms.

We predict that the circulating supply of $BIT will decrease over time through the following mechanisms: contribution and burn, direct treasury burn, the tokenomic design of BitNetwork, and utility integrated into BitDAO ecosystem partners.

The focus on “build” will allow BitDAO to participate in the fastest growing sectors such as ETH scaling, zero knowledge technologies, Web3 applications, etc. This direction coupled with significant reduction in the supply of $BIT will have many advantages for $BIT holders.