[PIP-60] DOUGH Staking & Governance Mining

PIP: 60 Title: DOUGH Staking & Governance Mining Status: Discussed, PIP Stage Author(s): @alexintosh Created: Aug 27, 2021 Discussion: https://forum.piedao.org/t/pip-60-dough-staking-governance-mining/954

Summary

Proposal to approve and deploy DOUGH Staking & Governance mining program. DOUGH Staking creates a value accrual mechanism for token holders by promoting long-term alignment and rewards active participation in the DAO with cashflow.

Background

The PieDAO community has long discussed implementing single asset staking for DOUGH, as well as a mechanism for fee distribution.

The DOUGH staking design is shaped to add valuable utility, promote long-term alignment, and encourage participation in the decision-making process.

The proposed staking framework serves as a mechanism to distribute protocol fees as well as other revenues generated by the DAO.

Implementation

• Smart Contracts - DOUGH Staking.
• Deployment preview (Rinkeby)
• DOUGH Staking Subgraph

Specification

High-level concept:

• Governance Mining means revenues are shared with DOUGH stakers actively participating in governance.
• Long-term committed capital is more valuable than short-term committed capital, for this reason, long commitments are granted with extra incentives such as more voting power and a higher portion of rewards.
• veDOUGH holders (aka DOUGH Stakers) receive cash flow in a diverse basket of tokens knows as "Reward Pie".

veDOUGH

veDOUGH uses a lock-up weight system. The number of veDOUGH obtained by staking DOUGH is determined by two elements: The stakedAmount of DOUGH and the timeCommitment.

Locking DOUGH is allowed for a minimum of 6 months and a maximum of 36 months. The multiplier follows the curve: y=x/k*log(x)

After the lockup expires, the user can withdraw their stake and will not be able to vote anymore.

Anyone can call the eject function to push out an expired lockup and force-unstake the tokens for that address, as such anyone can make sure free riding is prevented.

Quorum requirement for veDOUGH In order to pass a PIP 5% of the total supply of veDOUGH has to vote of which 60% in favour of the proposal.

The Reward Pie

The Reward Pie is a regular PieVault where the function joinPool is disabled.

The RewardsPie is used to distribute the DAO's revenues. The underlying assets of the RewardsPie will not be used productively and are therefore enabled for meta-governance at any time.

Definition of revenues

1. Fees accrued in the Fee Pot, coming from either Pies or DOUGHpamine (~$118k).
2. Farmed tokens by the treasury . See Treasury Farming Committee.

(Optional) The DAO might decide to add to the Reward Pie rewards in DOUGH.

Revenues distribution breakdown

• 60% is directly distributed to veDOUGH holders
• 25% is used to compound the treasury principle
• 15% is used to cover operational costs.

Governance Mining

The veDOUGH contract had an embedded system to gate the claim of rewards. It does that by using a merkle root to verify that the address claiming is eligible to do so. This system allows for participation to be tracked offchain and therefore easily evolve over time.

Definition of active participation

• veDOUGH holders who did at least one vote during the last 30 days are able claim their rewards.
• veDOUGH holders idle for >90 days have their rewards redistributed to everybody else.

Resources

Long-term Alignment in Cryptonetworks & DAOs‌

Conclusions

By voting "Make it happen" you agree for the DAO to:

1. Deploy the staking & veDOUGH contracts (See: implementation section).
2. Deploy the Rewards Pie.
3. Distribute DAO Revenues to veDOUGH Holders according to "Revenues distribution breakdown".
4. Change the current snapshot strategy to only allow veDOUGH holders to vote.
5. Accept only PIPs that have the "Quorum requirement for veDOUGH"

By voting "Do nothing" you agree for the DAO to:

1. Keep the status quo and do nothing.

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