MarketDAO

Table of Contents

1. Introduction
2. Getting Started
   • Connecting Your Wallet
   • Understanding the Dashboard
3. Governance Tokens
   • Acquiring Governance Tokens
   • Checking Your Balance
4. Creating Proposals
   • Resolution Proposals
   • Treasury Proposals
   • Mint Proposals
   • Token Price Proposals
5. Supporting Proposals
6. Participating in Elections
   • Understanding the Election Process
   • Voting on Proposals
   • Trading Voting Tokens
7. Viewing Proposal History
8. FAQ

Introduction

MarketDAO is a governance framework that brings market forces to group decisions. The key innovation is that voting rights can be bought and sold during elections, allowing market forces to influence governance outcomes. This user guide will walk you through all aspects of participating in MarketDAO governance.

Getting Started

Deploying a MarketDAO Instance

To use MarketDAO, you’ll need to deploy your own instance:

1. Clone the repository from https://github.com/evronm/marketDAO
2. Follow the deployment instructions in the Technical Reference
3. Use the included frontend to interact with your deployed contracts

Note: The repository includes a frontend application that is compatible with the current contracts. This user guide describes the features and workflow using that frontend.

Understanding the Dashboard

After connecting your wallet, you’ll see the Dashboard, which displays:

• DAO Information - Name, your token balance, total token supply, token price, etc.
• Token Purchase - Interface to buy governance tokens
• Navigation Tabs - Access to Proposals, Elections, and History sections

Governance Tokens

Governance tokens (Token ID 0) are the foundation of MarketDAO participation. They allow you to:

• Create and support proposals
• Claim voting tokens during elections
• Participate in DAO governance

Acquiring Governance Tokens

There are two ways to acquire governance tokens:

1. Direct Purchase: On the Dashboard, enter the amount of tokens you wish to purchase and click “Purchase”. The cost will be calculated based on the current token price.

2. Secondary Markets: Governance tokens can be bought and sold on supported ERC1155 marketplaces. Look for the “Buy/Sell on Rarible” link on the Dashboard for direct access.

Note: If the token price is set to 0, direct purchases are disabled.

Token Vesting

Governance tokens acquired through direct purchase are subject to a vesting period:

• Vesting Period: Purchased tokens are locked for a configured number of blocks
• Unlocking: Tokens gradually become available for governance as they vest
• Governance Rights: Only vested (unlocked) tokens can be used to support proposals or claim voting tokens
• Trading: You can transfer governance tokens at any time, but the vesting schedule transfers with them

This vesting mechanism protects the DAO from hostile takeover attempts where an attacker might try to purchase a large number of tokens and immediately vote themselves control of the treasury.

Checking Your Balance

Your governance token balance is displayed prominently on the Dashboard under “Your Token Balance”.

Creating Proposals

MarketDAO supports four types of proposals. To create a proposal:

1. Navigate to the Dashboard
2. Scroll to the “Create Proposal” section
3. Select the proposal type
4. Fill in the required information
5. Click the “Create” button for your chosen proposal type

Resolution Proposals

Resolution proposals are text-only governance decisions.

Required information:

• Description: A clear explanation of what is being proposed

Treasury Proposals

Treasury proposals transfer assets from the DAO treasury to a specified recipient.

Required information:

• Description: Purpose of the transfer
• Recipient Address: Wallet address that will receive the assets
• Amount: Quantity to transfer
• Token Type: ETH, ERC20, ERC721, or ERC1155
• Token Address: Contract address (for token types other than ETH)
• Token ID: Specific token ID (for ERC721 or ERC1155)

Mint Proposals

Mint proposals create new governance tokens for a specified recipient.

Required information:

• Description: Purpose of the token minting
• Recipient Address: Wallet address that will receive the new tokens
• Amount: Number of governance tokens to mint

Note: Mint proposals will only work if token minting is allowed in the DAO configuration.

Token Price Proposals

Token price proposals change the price of governance tokens for direct purchase.

Required information:

• Description: Justification for the price change
• New Price (in ETH): The proposed token price (set to 0 to disable direct sales)

Supporting Proposals

For a proposal to trigger an election, it needs to reach the support threshold. To support a proposal:

1. Navigate to the “Proposals” tab
2. Find the proposal you wish to support
3. Enter the amount of support to add (this is limited by your governance token holdings)
4. Click “Add Support”
5. Confirm the transaction in your wallet
6. Once the support threshold is reached, the proposal will automatically trigger an election

Participating in Elections

When a proposal reaches the support threshold, an election is triggered. This is where MarketDAO’s unique market-driven governance comes into play.

Understanding the Election Process

The election process follows these steps:

1. Claim Period: When an election starts, governance token holders can claim voting tokens (Token ID corresponding to the proposal ID) equal to their vested governance token balance
2. Trading Period: During the election, voting tokens can be freely bought and sold
3. Voting Period: Voting tokens can be used to cast votes by sending them to YES or NO addresses
4. Result Determination: At the end of the election period, the proposal passes if the YES votes exceed NO votes and the quorum threshold is met

Claiming Voting Tokens

MarketDAO uses a “lazy minting” approach to reduce gas costs:

1. Navigate to the “Elections” tab to view active elections
2. For each election, you’ll see a “Claim Voting Tokens” button if you haven’t claimed yet
3. Click the button to claim your voting tokens (you’ll receive tokens equal to your vested governance token balance)
4. Confirm the transaction in your wallet
5. Once claimed, you can vote with your tokens or trade them on supported marketplaces

Why lazy minting? Instead of automatically distributing voting tokens to all governance token holders when an election starts (which would cost significant gas), tokens are only minted when holders actively claim them. This means:

• Proposal creators don’t pay massive gas fees to distribute tokens
• Only participants who actually want to vote pay gas to claim their tokens
• Non-participating token holders don’t waste gas on tokens they won’t use

Voting on Proposals

To vote on an active proposal:

1. Navigate to the “Elections” tab
2. Find the active election you wish to vote on
3. Select “Vote YES” or “Vote NO”
4. Enter the number of voting tokens to use
5. Click “Cast Vote”
6. Confirm the transaction in your wallet

Trading Voting Tokens

The ability to trade voting tokens is what makes MarketDAO unique. To trade voting tokens:

1. Navigate to the “Elections” tab
2. Find the election with voting tokens you want to trade
3. Click on “Trade Tokens”
4. You’ll be redirected to the marketplace where you can list your tokens for sale or purchase tokens from others

Note: You can also use other compatible marketplaces that support ERC1155 tokens.

Viewing Proposal History

To view past proposals and elections:

1. Navigate to the “History” tab
2. Browse through the list of past proposals
3. Click on any proposal to view details including support levels, voting results, and transaction history

FAQ

Q: What happens to my purchased governance tokens during the vesting period? A: During the vesting period, you own the tokens and can transfer them, but you cannot use them for governance (supporting proposals or claiming voting tokens) until they vest. The vesting schedule transfers with the tokens if you sell them.

Q: Do I have to claim voting tokens for every election? A: Yes, voting tokens must be claimed separately for each election. You can only claim once per election, and the amount you receive equals your vested governance token balance at the time of claim.

Q: What if I don’t claim my voting tokens? A: If you don’t claim your voting tokens, you won’t be able to vote in that election. However, your vested governance tokens are still counted in quorum and majority calculations, so unclaimed tokens don’t affect the validity of the election results.

Q: Can I get my governance tokens back after voting? A: No, once governance tokens are used to create or support proposals, they remain locked until the proposal process completes.

Q: What happens if I sell my voting tokens during an election? A: When you sell voting tokens, you’re effectively transferring your voting power to the buyer. The buyer can then use those tokens to vote or sell them to others.

Q: Why would someone buy my voting tokens? A: People may buy voting tokens if they feel strongly about the outcome of a proposal. This creates a market-based assessment of the proposal’s importance to different stakeholders.

Q: What happens if the quorum isn’t reached? A: If the quorum threshold isn’t met by the end of the election period, the proposal fails regardless of the YES/NO vote balance.

Q: Can proposals be canceled? A: Once created, proposals cannot be canceled. They will either fail to reach the support threshold and expire, or they will proceed to an election and be decided by voting.