Polygon Ecosystem DAO - our ideas and benefits of community involvement

The first phase of DeFi summer on Polygon, we saw huge economic activity led by native Polygon projects like QuickSwap, AaveGotchi, Dfyn and Ethereum blue-chips like AAVE, Curve, Sushiswap, Balancer that chose Polygon to scale to the next million DeFi users. These projects brought along with them more than just TVL but their communities (the scarcest commodity in DeFi) and engaged in first of a kind low gas composability only on Polygon. We welcomed their communities with blockchain wide liquidity mining campaigns, assisted them with integrations with L1-L2 communication, helped market product launches across the 1M strong Polygon community. This synergy helped most projects to generate more revenue on their Polygon markets than Ethereum counterparts.

Our team recently did some analysis on Network effects in DeFi and came across an interesting metric popularised by Robert Metcalfe, one of the co-inventors of the Ethernet. According to him, a network’s value is proportional to the square of the number of nodes in the network, and in the case of Polygon DAU. Despite a crash in the market and a 60% percent fall in the price of $MATIC from its all time high (“ATH”), the value of the network continues to show a strong upward trend. The below diagram clearly shows the upward trajectory in network value.

With multiple top mobile wallet integrations and exchanges off-ramps onto the Polygon network in the works, growing the pie of onchain users is top priority. With partnerships like 0xDAO where Polygon and the 0xProject jointly announced a $10M DAO to fund projects that use 0x APIs on Polygon with a mission to onboard the next 1M users. Lending markets and big DEXs act like the bedrock of DeFi ecosystems and many dapps build on top of these platforms. By including them in our decision making process - we want to invite new projects to make use of our DeFi legos and thereby build new types of DeFi primitives on Polygon. Over time we have built a very large and dynamic community and we want to be able to leverage their strength and combined experience to be able to make the best decisions for the future of the Polygon Ecosystem and scale Ethereum together with our future products.

There are multiple models of engaging community and setting up governance but broadly they fall into 2 categories (although operationally they are fairly nuanced and have overlaps) -

  1. DAO model - All token holders (community members) vote on proposals that govern the DAO
    e.g. Compound, Badger, BarnBridge.
  2. Representative council model - Community elects/approves members from the wider DeFi ecosystem that then operate as working groups or committees.
    eg. SNX, MakerDAO, IndexCoop

We have been discussing the pros and cons of both these models extensively with above-mentioned projects and received valuable feedback. Operational, logistical and human resource costs involved in both models are quite different. Never has a network level DAO been successfully run that has incentives aligned with all its members. It certainly is a difficult task to go into a full DAO mode from day one. A DAO model from day one with inexperienced coordination misses the point about “separation of concerns”. (More on this later and how different working committees can work together to achieve this)

On the other hand, a committee of individuals/projects that have aligned interests to grow the Polygon DeFi ecosystem (more fees/yields for them) will govern and help incubate new projects here to increase composability on their markets. For instance a project building on AAVE’s Credit Delegation feature brings a novel capital efficient product that AMMs, smaller lending protocols with a good credit score could leverage to bootstrap their liquidity.

A yield aggregator like BadgerDAO whose primary objective is to bring native BTC into DeFi and build smart automated products, their interests are aligned if more yield generating sources for BTC are created in the ecosystem, more utilization of their synergistic partnership with Ren and their bridge, which generates them more fees. Totally possible when new projects are incubated/bootstrapped via this DAO which uses interest bearing ibBTC as collateral. And hence more they can contribute and invest in building innovative products for their community that increases overall TVL, contracts deployed (true DeFi metric of activity) and of course DEXs like QS and SushiSwap benefit from all of this as they are the eye of the storm raking in all the trading fees.

Composability numba go up !!

The ideas/projects could be as simple as creating audio/video walkthroughs of using Polygon dapps like QuickSwap and AAVE via Huobi Wallet/TWT, go a step further with RabbitHole (big fans !!). Or even development grants or liquidity mining boosts to bootstrap their native Polygon projects building the next great DeFi primitive across derivatives, fixed-yield, Social DeFi etc. creating a net positive for the ecosystem. One great example we saw of the community introducing and leading a project is IndexCoop’s recent Polygon Index. We were overwhelmed by the feedback and excitement around this product as the forum post quickly became the most active post in just 5 days. So I guess we do have people rooting for our success and we want to give them more avenues to channel this shared ambition.

On a secondary note, Polygon PoS chain sees most of the DeFi activities today. But with increasingly blurring of lines across DeFi, NFT and Gaming as seen by native projects like Cometh Games and AaveGotchi. Polygon SDK that allows you to build your chain either secure by your own validators or Polygon’s validators will be a game changer. Sports prediction platform SportX recently launched SX Network and will be going live very soon as the first Polygon project to do so. To scale your solutions on the SDK, requires multiple integrations with ChainLink, TheGraph, wallet integrations and on/offramps etc. These could be jointly funded by both projects via this DAO. Without leaking too much alpha here but anyone building tooling, integrations and projects on Layer2 [REDACTED] rollups also benefits from this DAO.

However this is easier said than done. Coordination mechanisms in DAOs are still being experimented upon. Active DAO membership is low despite introducing NFTs/PoAPs for active members. This is something the community can chime in with ideas, but we have a few as starting points - every committee member (individual or dapp) should “champion” at least 1 proposal in their tenure of 3 months in the council. Failing to which they are rescinded of their seat. They will be compensated during this tenure. As the Polygon ecosystem grows, the committee members have a front-seat opportunity over others to increase cross-collaboration for their products as mentioned above. Voting for elections of new members could be implemented in multiple ways like by using staked MATIC on PoS or via the DAO tokenholders. We encourage the community to start a healthy discussion around this.

With this DAO we welcome all active community members and DeFi projects to pitch in ideas to chalk out this idea to bring DeFi to the next million users.

A cursory demarcation of different working groups aka committees could look like this -

  1. Committee 1
    A Polygon native projects committee (of 3/5) that helps operationalise smaller grants of <$100k with a forum discussion and follow up call if necessary.
  2. Committee 2
    Polygon blue-chips like QuickSwap, Sushi, AAVE and infrastructure providers like ChainLink and theGraph to help formalise the process via forum discussion and a snapshot signalling vote from the community.
  3. Committee 3
    Onboarding web3 developers and building tooling to support Polygon with ChainLink, TheGraph, UMA, Covalent etc.

We would love to get your feedback on how to move ahead. Please drop your thoughts here in the comments, Polygon advocates and we would love to get the community’s ideas to scale going forward.

Also join our Telegram announcement channel to stay updated on the progress.

15 Likes

This is incredibly exciting. I am looking forward to seeing how this DAO grows and contributing however I can. I don’t have the answers on the larger governance questions in this post, but I am looking to get involved from a marketing standpoint and have some high level thoughts from other DAO experience:

  • I believe the integration of POAPs is a small way to help encourage discourse of proposals. Any community call or event can have a corresponding POAP to build community momentum

  • The hosting of virtual events, fireside chats, AMAs is another great way to showcase projects within the ecosystem and mesh the community tighter

  • Finally, for lower end marketing goals a bounty system is another way to incentive community members at a very small cost. This can be simple write ups / how tos, meme creation contests etc

4 Likes

Exciting times!

I think this may be obvious, but I believe it is critical that polygon’s image and mission be clarified for the retail market. Particularly in the US market there is a stubborn misconception that polygon is inconsistent in their relationship to ethereum and its security.

Here is how we win people over: UI. We need a beautiful native Chrome plug in web wallet. It needs to be able to connect to a credit card. It needs to seemlessly lead you to sushiswap and quickswap. It should have gaming app icons you can click on your phone/pc.

Until we reach perfection in user interface, the best approach in my opinion is still economic incentive rewards and making a coordinated Twitter media push to clearly explain how polygon is the future of ethereum. Let’s clearly explain that polygon is a full scale scalability solution with multiple mechanism options (soon with zk). We can’t just have mihailo doing all the legwork.
[shoutout to RaphaelSignal to doing a great job also] A coordinated push would be entail accounts that are open about their job occupation and patiently explain the truth about polygon whenever it comes up on major accounts.

Other ideas include in person meetups/conferences (in the US!) in addition to web ones.

Pumped for the future!

4 Likes

In person Nft art fairs funded by polygon could be very cool too.

4 Likes

Congratulations. Very excited to see the Dao grow and I look forward to contributing!

2 Likes

This is quite exciting and glad to be part of this initiative think we should avoid the type of governance and voting that is happening in other protocols. :+1: :clap:

1 Like

This man is a long term asset. Put a ring on it Polygon. :ring:

2 Likes

I strongly believe Polygon is coming around full circle with this. So exciting to be a part of it. :point_up:

3 Likes

This sure is solid feedback which is why exactly why the DAO was created. Would love to chat more and meet you IRL if you’re here in NY maybe at Messari event or MCON.

In anycase the Chrome plugin is interesting. So you suggest having an extension connected to wallet.matic.network with the features?

NFT NYC it is then !

I live in NYC, but do not currently have a ticket to Messari ($$$ :frowning: ). We can certainly arrange a meetup at any time.

For the plugin, what I am suggesting is essentially copying, but improving exactly what the metamask plugin is. Our plugin would be native to the polygon network and provide a far better UI/UX experience (the main criticism of metamask). The enhancements/alterations would be:

  • one click gas fee editing (or even create a setting where it automatically does suggested gas fee +/- 1/2/3…).
  • automatically add tokens when purchased to wallet
  • built in one or two click bridge to ethereum
  • easy RPC switching with multiple RPCs already added
  • NFT gallery wallet
  • portfolio analytics
  • eventually would have: easy fiat onboarding, seamless switching between polygon scaling solutions (ZK, PoS, Plasma, etc)

I could go on all day about how crypto design could be improved as a whole…

To my knowledge there hasn’t been a single NFT meetup in the world where its essentially an art fair.

I know it may seem counterintuitive to have a digital art fair in real life, but this is about brand building and creating network effects.

What I imagine is potentially a conference where there are discussions about the NFT space, but also a classic art fair where there are stalls of artists, but instead of paintings they have screens that you can scroll through their art and buy immediately with crypto (perhaps matic builds a camera QR purchasing feature in its above wallet plugin/app).

NYC to me makes the most sense to do it because of the high density of artists there already, but other cities could work too.

One other idea I had was to have a free online developer bootcamp that takes a total novice in programming and teaches them everything they need to know to create Dapps on the polygon network. I would take that class…

1 Like

I will be at NYC NFT and would love to meet up :+1:

We are Mask Network. We are looking forward to seeing how the DAO grows and exploring how we can contribute to it.

We actually have had in-depth cooperation with Polygon for a while. Our plug-in has integrated Quickswap, enabling users to trade assets more quickly and with near-zero gas fee. Recently, we have also started the Social DeFi Alliance with Polygon and other partners from DeFi Apps, ecosystem partners, and community & media partners. In the future, we will launch more social DeFi projects for social network users, promote the connection between Web2.0 and Web3.0, guide more top Internet social platform users to access DeFi, and, for the long term, we are dedicated to promoting the large-scale application of Web3.0.

We will continue the integration with Polygon to further develop the ecosystem and explore new possibilities for operations such as payments and decentralized trading.

4 Likes

Hi PolyGoons :wave:t3:

Yalor from RaidGuild chiming in here with @DamagedGoods and @sydneyLai on my squad, we have formed a micro DAO exploring exactly these types of new governance models. We would love to find out how to engage with this initiative and commit some of our brain power to helping you guys create the best possible outcomes for the community.

Between us we are well versed in the governance models that currently exist for DAO’s, Tokenomics, Utility, Community activation programs, and infrastructure around rewarding and allocating value within communities.

In reference to the above, we have run the grants program @ MetaCartel for over 2 years and we might be interested in helping allocate budget to teams that apply to build out infrastructure increasing the impact and the utility of the Polygon ecosystem.

Lastly regarding the DAO structure itself, have any decision been made here around the model that you are thinking of starting with, how to gather consensus, and move to on-chain voting, what type of quorums you will require, and so forth ?

If not, I think we are ready to engage in that process and lead/participate in some exploratory discussions to help guide the community towards some concrete next steps.

Overall we are delighted to see Polygon taking this step and we stand by ready to participate in making this DAO a reality.

~ Cheers @Yalormewn

3 Likes

Congrats on starting this!

1 Like

Wow - this is an incredible offer. I think the Polygon DAO should engage in testing some of the new governance models & learnings that @Yalor is referencing. As an active member in a number of communities, I agree that there are weakness areas in the current existing DAO structure that can be improved upon.

Very excited to see how we can work together to improve the Polygon ecosystem. An efficient DAO structure would be a huge positive force in driving that :+1:

1 Like

I think these are some great ideas and look forward to helping out with a lot of this as well. I’m happy to help facilitate in finding more community members to fill roles here as well and would love to be involved in the growth of this new project

4 Likes

Thanks, poopster!

I also have extensive experience in sponsorships & event organization. I would love to coordinate with anyone from the Polygon team on IRL events, conference sponsorships, speaking integrations etc.

2 Likes