What's up for vote at DIMO March 2023?
Imagine the company behind a product you love allowed you to vote to change the way the product or aspects around that product work. You could vote to tell Uber you want a new referral program or to increase the safety requirements around rides. You could vote against the proposals from the company if you felt they were bad for users. Pretty great right?
Well you can do that with DIMO, a decentralized user-governed protocol. As a DIMO user, you can vote on any proposal that materially impacts the relationship between the user and the products in the DIMO ecosystem. While much of the work to create those proposals has been carried out by the DIMO Foundation, any person or group with a sufficient number of tokens between them can submit one for voting. For now, sit back and read a quick summary of the changes that are up for vote, starting today!
Removing the marketplace “dollar peg” and making the marketplace pay in $DIMO
If you have not yet been deep in DIMO tokenomics, this may sound unfamiliar or strange. Let’s start with the first question you’re probably thinking: Dollar peg?
DIMO tokenomics have never attempted to peg $DIMO to the value of $1 in the market. However, before the token was available on the open market and had a readily available price, the DIMO Foundation needed a way to calculate the amount $DIMO that would be required when a 3rd party wanted to pay for data on the DIMO network. A $1 “peg” made things simple, but since the token now has a price, that peg for marketplace transactions is useless.
The introduction to DIP-3 amendment 1 summarizes it well:
This amendment removes the peg for converting fiat or other crypto into $DIMO when marketplace rewards are generated for users. If passed, the DIMO Foundation would 1) provide this service by converting using the market price for $DIMO as determined by popular price oracles and 2) would be able to use its best judgment to limit or deny this service, or to use a higher price for $DIMO if, for example, it determines there isn't sufficient actual volume or genuine price discovery to give legitimacy to the market price.
What’s the outcome? Companies that show up to consume DIMO user data, either in bulk or to purchase one user’s data at a time in transactions, must pay in $DIMO to consume that data. There are a variety of ways this can happen, and in many cases, companies like Digital Infrastructure Inc. will help to abstract away the token requirement so that companies building on DIMO can avoid the complexity of holding tokens in custody, balance sheets, etc.
If you’ve been waiting to understand more fully how the demand for the token is created, this is an important first step. Future writing will dive into how this works in more detail as well. The important thing is, there is a simple model for developers and businesses to utilize the $DIMO token in paying for data access.
Wait, since when are there amendments?
If you have been involved with the governance process of other open source projects, you may be used to the idea of “improvement proposals,” but new to the idea of amendments. These are relatively new, and in fact one of the proposals up for vote allows the community to govern the project in this way.
DIP-1 amendment 1 actually edits the governance rules to allow amendments, which makes for a much simpler and easier governance process.
Referrals are returning!
One of the brand new proposals on the docket involves bringing back one of the top requested features: referrals. DIMO had a referral program in early 2022, but it was deprecated in favor of eventually re-building it on-chain so that it could be more directly linked to the rest of the rewards infrastructure.
DIP-7 creates a referral program that gives 50 $DIMO to a user each time they refer other users, and gives 50 $DIMO to the user that gets referred. If passed, the DIMO Mobile team will build referrals into the app in the next 1-2 months. If you’ve been waiting to refer your friends and family or just strangers on the internet, the milestone is near!
Market Making and Sellable Tokens
Continuing to fund the development of the DIMO protocol requires a multi-sided strategy to bring income into the DIMO Foundation. When you couple trading activities — not by the Foundation itself but by third parties and the free market — and the ability to sell tokens from the treasury, the Foundation can generate income using its supply.
Tokens were already earmarked for market making in DIP-6, but in DIP-6 amendment 1 some of those tokens are being repurposed to make them available for the foundation to sell them instead. It’s a relatively small percentage of the treasury, but the foundation will continue to use all the tools it can to ensure the longevity of DIMO.
Staking vs. Bonding
Perhaps the most minor of the proposals as it is a semantic change is DIP-4 & 5 amendment 1. It relabels the term "staking" to "bonding" when describing how ecosystem partners lock their tokens in order to receive a license. After many, many discussions with community members, we learned that "staking" was a confusing term.
The Motivation section of the amendment should be clear to most people:
Many are confused by the term "staking" as used in DIP-4 and DIP-5. "Staking" in the context of blockchain projects usually refers to an activity whereby users lock up tokens for the purposes of earning a yield.
In DIP-4 and DIP-5, "staking" refers to hardware manufacturers, node operators, and client publishers putting up tokens as a security deposit as a condition of receiving a license. There is no yield for staking.
Your participation is encouraged
If you haven’t, it’s unfortunately too late to vote in this round, but we encourage you to do so now so you’re ready for the next proposal.
DIMO is building a safer, more open, and zero emission mobility future using innovative incentivization mechanisms.