# Abstract Blockchain technologies and cryptocurrencies are experiencing exponential growth. Within a decade, the market will transform from singular emerging technologies, such as smart contracts, into a mature ecosystem. Growth on this scale needs management. A new type of cooperative organization has arisen to meet this management challenge, decentralized autonomous organizations (DAOs). DAOs use blockchains and its tokens to allow decentralized groups to operate transparently, with less bureaucracy and cost. But, the software that supports these capabilities is limited or does not exist yet. Paideia is a DAO management toolset built for the Ergo and Cardano blockchains. Paideia makes it easy for anyone to create a DAO, manage proposals and voting, and spend from a treasury. Ergo and Cardano provide unique technical capabilities for DAO management software not available on other blockchains due to the eUTXO model. These unique capabilities can be combined with other DAO software features to support many use cases: existing DAOs, startups, investment groups, fundraising organizations, social clubs and others. The more capable DAO software becomes, the more sophisticated the types of social organization it will enable. Paideia aims to push the development of DAO software in new directions: governance and tokenomics pre-sets, member reputation scores, staking and liquidity options, and in other ways. With the right software and blockchain as a service functionality, DAOs will flourish. They will be a key social organization leveraging blockchains to solve real-world problems. # Disclaimer As of the date of publication, this document does not constitute advice nor a recommendation by the Paideia team, its officers, directors, managers, employees, agents, advisers or consultants, or any other person to any recipient of this document on the merits of purchasing, otherwise acquiring, or holding Paideia Tokens or any other cryptocurrency or token. The purchase and holding of cryptocurrencies and tokens carries substantial risks and may involve special risks that could lead to a loss of all or a substantial portion of any money invested. Do not purchase tokens unless you are prepared to lose the entire amount allocated to the purchase. Paideia Tokens, if and when they are created and made available, should not be acquired for speculative or investment purposes with the expectation of making a profit or immediate re-sale. They should be acquired only if you fully understand the intended functionality of the Paideia Tokens, and you intend to use the Paideia Tokens for those purposes only, and it is legal for you to do so. No promises of future utility or performance or value are or will be made with respect to Paideia Tokens, including no promise any Paideia networks will be launched, no promise of inherent value, no promise of any payments, and no guarantee that Paideia Tokens will hold any particular value. Paideia Tokens are not designed and will not be structured or sold as securities. Paideia Tokens will hold no rights and confer no interests in the equity of the Paideia business or any future Paideia platform. Paideia Tokens are designed and intended for future use on the public Ergo and Cardano platforms for the purposes of governance and staking to support the continued use of the platform. The documentation presented (docs.paideia.im) is not a prospectus or disclosure document and is not an offer to sell, nor the solicitation of any offer to buy any investment or financial instrument or other product in any jurisdiction and should not be treated or relied upon as one. Any distribution of this documentation must be of the complete website and all its sub-pages including the abstract and this disclaimer and the accompanying boilerplate in its entirety. All information in this documentation that is forward looking is speculative in nature and may change in response to numerous outside forces, including technological innovations, regulatory factors, and/or currency fluctuations, including but not limited to the market value of cryptocurrencies. This documentation is for information purposes only and will be subject to change. The Paideia team cannot guarantee the accuracy of the statements made or conclusions reached in this documentation. The Paideia team does not make and expressly disclaims all representations and warranties (whether express or implied by statute or otherwise) whatsoever, including but not limited to: any representations or warranties relating to merchantability, fitness for a particular purpose, suitability, wage, title or non-infringement; that the contents of this documentation are accurate and free from any errors; and that such contents do not infringe any third party rights. The Paideia DAO, Paideia team, and operators shall have no liability for damages of any kind arising out of the use, reference to or reliance on the contents of this documentation, even if advised of the possibility of such damages arising. The Paideia team believes that the information reproduced in this documentation is accurate and that the estimates and assumptions contained herein are reasonable. However, there are no assurances as to the accuracy or completeness of any included information. No regulatory authority has examined or approved any of the information set out in this documentation. The publication, distribution or dissemination of this documentation does not imply compliance with applicable laws or regulatory requirements. The Paideia DAO operates globally, not under the jurisdiction of any single governmental organization, and no majority has been established in any specific jurisdiction. # Introduction Paideia is a web 3 software suite of DAO management tools which allows anyone to create a DAO, distribute tokens, discuss proposals, and participate in the democratic process required to manage a shared treasury. Currently Paideia is being built on the Ergo and Cardano blockchains, due to their eUTXO structure which we feel has several advantages over EVM-based smart contracts. Paideia will empower new projects and co-operatives to start up quickly and allow them to raise funds and leverage them with fewer roadblocks than other similar toolsets, in a fair and secure way. In addition, the tools will help various other groups share funding; software development teams, game guilds, startups, and investment groups will be able to allocate funds with full transparency to all members, and control the distribution of decision making power. ## Why Blockchain Blockchain is a relatively new technology that is giving rise to new forms of social organization previously not possible. Utilizing cryptocurrency technologies offers an algorithm-based mechanism for governance. By moving transaction logic for governance decisions to an immutable blockchain, some level of corruption can be mitigated. Decisions can be secured by smart contracts, rather than by placing trust in individuals. Specific benefits of Blockchain applied to DAO governance are: 1. Physical decentralization of data, eliminating the risks of single point failure and many forms of cyber attacks. 2. The distributed ledger naturally allows for easy to disclose and transparent information. 3. The peer to peer and append-only transactions linked to previous transactions provides a reduction of bureaucracy, discretionary power, and corruption. 4. It provides cost savings over archaic forms of governance thanks to the elimination of intermediary costs or risk of data entry errors. ## The Cardano & Ergo Advantage We believe a DAO should exist on a blockchain with a strong foundation and fundamentals. A DAO should be inexpensive to operate, simple to use, secure and decentralized. It should resist government intervention and be accessible to anyone in the world, regardless of prohibitive local laws or social status. Without these features, a DAO can be manipulated by those who don’t agree with the DAO’s intentions. Certain individuals can be blocked from participating, based on their perceived caste, some other trivial social status, or an arbitrary law that may be in place to protect the interests of the ultra-wealthy. If a DAO exists on a blockchain that does not have 100% up-time, the treasury could be inaccessible. If the blockchain doesn’t have strong fundamentals, and resistance to manipulation, or has an insecure protocol, then actors with bad intent can manipulate the activities of the DAO or extract funds through malicious means, even when those means are touted as legal, moral, or right by certain individuals. Both Cardano and Ergo offer the following advantages: * They are built on the eUTXO model, which has far superior security assurances when compared to the accounting model of EVM chains. Smart contract behavior can be tested with more certainty, and transaction behavior is known before the user submits. There are far fewer surprises on an eUTXO blockchain. * The protocols have 100% up-time. * Both are inexpensive to operate; there are no gas fees like on EVM-based blockchains. Ergo provides the following: * The PoW protocol Ergo utilizes is well tested to be secure and to decentralize control. * It was fair launched, with no pre-mine, meaning there are no concentrations of power * It provides technology such as NIPoPoWs, which allow users to run light clients. A DAO member can interact with smart contracts using their own node on their own device, even a cellphone. Light clients on other blockchains do not allow full node access, and in some cases have blocked users based on geo location. \[[1](https://www.coindesk.com/policy/2022/03/03/metamask-infura-block-certain-areas-amid-crypto-sanctions-fury/)] * There are built in security features which are more robust than Bitcoin’s, called Sigma protocols. \[[2](https://ergoplatform.org/en/blog/2020_03_16_ergo_sigma/)] Cardano provides the following: * Plutus is built on Haskell and can offer true auditability with legitimate academic proofs of smart contract behavior. * Cardano has a significantly decentralized PoS protocol, and users are financially incentivized to support and promote the network. The financial incentives also discourage centralization of power, which is important for a blockchain. # Executive Summary People have been struggling with governance for centuries. We are often selfish creatures, but our success as a species is based on the fact that we can cooperate to achieve common goals. One of the difficulties is that wealth generated from these shared endeavors is not always distributed equitably amongst the individuals involved. With distributed systems, corruption, censorship, theft, and other pitfalls can prevent each stakeholder from getting their fair share of the proceeds. Blockchain has stepped in to disrupt financial markets by decentralizing control of asset storage, distribution, and remittance, but there is still room to take it another step further. People need a fair, secure, corruption and censorship resistant way to manage shared funds. The Solution: Paideia, an eUTXO-based DAO management toolset. Paideia will make it easy for anyone to initiate and manage shared treasuries through voting. The platform will provide a robust UI, backed by secure smart contracts that handle on-chain vote tallies, and will automate fund distribution. Paideia is for anyone who needs to manage a treasury as a group. Some examples of entities that will benefit from Paideia include: * Governance DAOs * Startups * Developer teams * Projects looking to raise funds * Investment groups that pool their resources toward a common endeavor * P2E gaming guilds * Anyone else leveraging a shared treasury to create or do something on-chain ## Business Model Paideia will generate revenue through blockchain as a service solutions. Initiating a DAO, distributing tokens, and upgrading to more complicated services will impose minor fees. All fees will be low enough that they will not have a noticeable impact on the user’s experience with the system, but high enough to cover expenses and fund continued development and growth. Fees will be shared between the Paideia DAO treasury and Paideia token holders who stake on the platform. # Quick Facts **Project Type:** DAO Toolset **Token name:** Paideia **Blockchain:** Ergo & Cardano **TGE:** April 1, 2022 on Ergo. TBD on Cardano **Governance:** Optimistic DAO, quadratic voting **Total token supply:** 200M on Ergo. TBD on Cardano **Planned Products:** Governance, Voting, Treasury Management, Token Issuance, Staking, DIDs # Corporate Summary ## Mission Our mission is to give people the power, knowledge, and motivation to change the way they govern and participate in democratic organizations. We will help people experiment with different methods of governance and work together to create a better future, whatever they envision. Using our tools, individuals who don’t have fair access to financial systems may take control and compete in a society that is imbalanced and stacked against them, without needing the approval of the wealthy or elite. Anyone who wants to engage in a democratic organization with a shared financial treasury can do so using Paideia. The tools we create will allow anyone to initiate and manage a DAO with no prior knowledge or experience, empowering groups of individuals to pool their wealth and put it toward a common aim. Through Paideia, DAOs will be able to: * Distribute governance tokens * Raise funds * Manage their treasury * Track member reputation * Provide liquidity * Initiate and manage staking contracts * Create proposals on expenditures or governance * Have a forum for stakeholders to discuss all ideas and proposals * Easily deploy their funds to achieve their goals * Experiment with different types of automated algorithmic democratic processes ## Values Our core values include: * Maintain open and transparent communication with the community. * Behave in a trustworthy way at all times * Provide equitable access to anyone on the globe, regardless of class, wealth, upbringing, or any other irrelevant metric. * Provide education and empowerment. * Create safe, trustworthy smart-contracts that cannot be tampered with by any malicious actors. * Give communities a space to communicate and share ideas. ## Management Team Paideia will be initially managed by the development team. As the project evolves, the Paideia DAO will transition into a fully self-governing entity, and any management roles that remain will be filled by qualified individuals selected by the DAO. These decisions will be made by DAO votes, to maintain decentralized governance of the project. # Market Analysis ## The Cryptocurrency Market The cryptocurrency market has been growing since the first bitcoin block was mined. Though there have been ups and downs in price, adoption is ever increasing, and there are no signs that this is slowing down. With institutional investors coming on board in the West, and heavy adoption across emerging markets, crypto appears to have a strong future. As of 2021, there was an estimated global crypto ownership of 3.9%, with more than 300M users.\[[1](https://triple-a.io/crypto-ownership/)] By the end of that same year, the total market cap had reached a high of $2.5T, closing out at $2.0T. \[[2](https://www.coingecko.com/buzz/2021-yearly-cryptocurrency-report)] Some reports from 2020 estimated a CAGR between 11.1% and 30% over the next several years, though their estimations seem to have been too conservative based on today’s numbers. \[[3](https://www.globenewswire.com/news-release/2021/04/12/2208331/0/en/At-30-CAGR-CryptoCurrency-Market-Cap-Size-Value-Surges-to-Record-5-190-62-Million-by-2026-Says-Facts-Factors.html), [4](https://www.globenewswire.com/news-release/2021/10/25/2319609/0/en/Cryptocurrency-Market-Rising-at-a-CAGR-of-11-1-to-Reach-USD-1902-5-Million-by-2028.html)] Chainalysis states that by the end of Q2 2021, global crypto adoption had grown by over 2300% since Q3 2019, and over 881% in one year. \[[5](https://go.chainalysis.com/2021-geography-of-crypto.html)] The reasons for increased adoption differ depending on geographic location. > In emerging markets, many turn to cryptocurrency to preserve their savings in the face of currency devaluation, send and receive remittances, and carry out business transactions; in North America, Western Europe, and Eastern Asia, by contrast, adoption over the last year has been driven largely by institutional investment. \[[5](https://go.chainalysis.com/2021-geography-of-crypto.html)] Owners Demographics as of early 2021 were as follows: \[[1](https://triple-a.io/crypto-ownership/)] * 79% male, 21% female * 58% are aged under 34 * 82% have a Bachelor’s degree or higher * 36% have an annual income over US$100k Walmart is getting into the space, Google has created a blockchain division, the U.S. government is starting to get serious about the digital dollar. All of this points to the fact that this is a nascent technology that will be as ubiquitous as the Internet, probably within a decade. Paideia intends to be ahead of that growth curve. ## Potential Market Growth Cardano grew from just over 100k wallets to just under 1M in 2021 \[[6](https://datastudio.google.com/reporting/3136c55b-635e-4f46-8e4b-b8ab54f2d460/page/r2LQC)], without any defi, and no smart contract support, which it now has. Ergo reached 100k wallets in Q1 of 2022 \[[7]()], and since then the ecosystem has produced a significant number of functional DeFi tools. On one single day, the official Ergo wallet had 13000 downloads \[[8](https://mobile.twitter.com/ergoplatformorg/status/1484198999930384388)]. A similar growth trajectory as Cardano would indicate an exponential increase in use and investment in Ergo in 2023. \ \ Cardano is also still growing quickly. According to Messari \[[9](https://messari.io/report/state-of-cardano-q1-2023)]: > * **ADA’s market cap rose by 54% QoQ from $8.6 billion to $13.2 billion.** This increase moved Cardano from the 9th to the 7th largest network by market cap. > * **TVL increased 172% QoQ from $50.8 million to $138.3 million.** This increase is driven by both established protocols, such as MinSwap, and newer protocols, such as Liqwid Finance. > * **Indigo’s IUSD and Djed’s DJED stablecoins drove total stablecoin value up 261% QoQ.** These stablecoins and their adoption were also a catalyst for the overall TVL increase. At the time of writing, Ergo has a market cap of $166M. If Ergo were to capture even 1% of Ethereum’s market share, that would place it at a market cap of $3.15B, which is an 18x growth in value. ## User Base Cryptocurrency has broad market segments, as anyone who has access to a cell phone or computer can use crypto in some way in their day-to-day lives. Some of the market segments include day-traders, long-term investors, miners, developers, gamers, shopkeepers (someone who sells goods or services for crypto), and fund managers. The platform will be marketed not just to developers, but also to individuals who are less technically minded but who want to create an organization. Paideia will be designed so that the end-user does not need to know how the blockchain works or why it was chosen as the underlying technology behind the platform. ### Primary Users The primary user of Paideia who will create a DAO will be someone looking to launch a crypto project, and raise funds from the community to aid in the development of that project. Often this will be someone who has some development experience, but that’s not necessarily always true. The typical user will likely be entrepreneurial, and will be focused on marketing and building their project. If they needed to focus on writing code to manage their DAO and distribute their tokens, it would take time away from their own project. The Paideia toolset will remove this barrier to entry, allowing users to focus on marketing and developing their products. In addition, creators and entrepreneurs will appreciate the low fees, as starting a comparable project using Ethereum based DAO toolsets costs upwards of $1500 in gas fees before you even distribute the tokens. The primary user who will vote and discuss proposals in Paideia will be crypto speculators of any kind, whether they are long-term investors or day-traders or anything in between, if they are interested in investing in a project that launches with a DAO behind it, they will be the primary target user for Paideia. These users will appreciate the ability to discuss proposals directly on the platform, and the ease of submitting votes to the blockchain with minimal fees. ### Secondary Users In addition to these primary users, we have identified some secondary users that will be able to take advantage of Paideia’s tools: Organizations of any kind that want to share governance with a group, including people who haven’t used blockchain before, if the barriers to entry remain low. For example, a hobby club that wants to rent a collective space could pool their funds using the Paideia toolset and vote on expenditures. Startups that have VC funding and need a simple way to manage it could submit their funds and create a voting token for the executive team, allowing different directors to propose fund uses. For example, a marketing director could request some funds for a marketing campaign, outlining all the details, and this could be voted on by the approved directors. Then, the funds would be released and the invoices could be shared directly on the Paideia platform. Developer groups that need to share raised funds could use the toolset to manage their funds, making a proposal for things like hosting services, software purchases necessary for group development, etc. Projects that want to kickstart funding from the community, and potentially need a tool to discover the fair market price could use Paideia’s interactive token offering system where price discovery would take place based on market demand. Investment groups that want to pool resources to invest in higher staking tiers or meet minimum investment requirements that they cannot meet as individuals could use the toolset to send funds to those blockchain projects, ensuring all stakeholders received their fair dues. The proposals could reserve funds and pay out based on smart contracts. This would mean the group would not need to rely on an individual to manage a shared wallet, and would prevent any individual from taking the pooled funds for themselves. P2E gaming guilds could pool resources to buy an expensive character or upgrade in a game. If they work shifts to earn funds, they could manage the distribution of those resources with the Paideia platform. # User Acquisition ## Social Media Paideia will utilize various social platforms such as Twitter, Telegram, and Discord, to expand our community, creating a space for people to learn from one another and get the latest info about the project. Community updates, tutorials, and AMAs will be shared. The team will share consistent blog posts on Medium and the Paideia website outlining the development progress. ## Strategic Partners Current strategic partners include: * The Ergo Foundation * Spectrum Finance * Ergopad There are more partnerships planned which help build cross-chain platforms to allow DAOs on Paideia to hold not just Ergo-based assets, but others as well. Paideia will not be seeking VC funding, in favor of a fair and broad distribution among the community. Paideia is backed by the community, and the community will have an opportunity to influence the direction of the project via voting. ## Marketing It is important to market Paideia outside the crypto community, in order to capture a larger audience. The purpose of these tools is to eventually allow anyone to create a DAO, whether or not they are familiar with blockchain in general. In order to increase community outreach, Paideia will be advertised through different platforms using various marketing strategies. The focus is on advertising our project through blockchain related blogs for each region with a broad scope of article types, focused on different market segments beyond just the technical-minded crypto enthusiast. Furthermore, we will be working with influencers for the mass adoption of Paideia, to help bring awareness and encourage entrepreneurs to consider using the toolset. Our marketing campaign will also include giveaways, bounties, contests, AMA's, as well as participation and collaborations with other projects. Platforms such as Twitter, Reddit, Medium, YouTube will be used to spread awareness of the use case of our project. On the other side, every project that makes use of our tools will have a space to share their project information, and there are plans to increase the community outreach tools built directly into the Paideia toolset. We will continue to make use of community feedback through social media and surveys in order to get familiar with the thoughts and ideas of the people who use Paideia. Ongoing surveys and market research will be conducted, and the data will help grow the project in a direction that’s useful to the users. # Product Market Fit
ProblemSolution
Ethereum gas fees make simple tasks extremely costlyErgo & Cardano both have no gas fees and low transaction fees
The wealthy have more votes in many DAO systems, which means they will always vote for proposals that benefit them over others. This gets worse over time as wealth is accumulated faster due to these decisions.Paideia offers voting mechanisms which attempt to mitigate the wealth advantage, such as quadratic voting and optimistic governance. In quadratic voting, a calculation weighs votes from smaller wallets higher per token than a single vote cast by a larger wallet.
Inability for non technical users to form a DAO.Paideia allows for users from any background to create and manage a DAO. This means that they don’t need to have any developers on their team. Funds can be shared by any group of people.
Lack of trust between the investors and project teams.Paideia is providing tools such as transparent vesting or locking contracts, which can build a trust-based bridge between investors and builders. Transparent fundraising, tokenomics, and vesting schedules, all secured by audited smart contracts will prevent rug-pulls and allow investors to have a say in financial decisions.
Sometimes types of investments are out of reach for some investors due to a minimum investment number.Paideia is offering tools that allow investors to pool their funds, and the smart contracts ensure that no individual can take those funds for themselves. The treasury wallet can interact with any smart contract that an individual’s wallet can.
Some entrepreneurs cannot launch their projects due to a lack of resources such as money, connections, or an inability to write the necessary code to interact with the blockchain. They still may have a good idea, and would be able to execute if there were fewer barriers.We empower entrepreneurs by providing them tools and opportunities to start building their project. Paideia has fundraising tools that make it easy to share the idea and see if there is community interest.
Lack of knowledge among the communityPaideia will create educational videos and documentation to help new users learn about the software available and the blockchain in general.
With many projects, tokens are distributed manually, which leaves room for error or manipulation, schedule changes, and lack of transparency.The toolset will provide a tokenomics process that is locked in at the outset. Tokens will be distributed through smart contract secured vesting periods and emission schedules that cannot be changed after the fact.
# Feature Sheet ## Basic Features * Governance Management: choose the style of governance and create the necessary tokens to share voting rights * Proposals: Those with the appropriate rights can create proposals to change DAO features and settings, or spend funds * Voting: the voting structure can be selected from available options, and each proposal can be voted on by token holders * Token creation/issuance: all tokens can be generated by the platform and distributed using the optional mechanisms (direct sale FCFS, interactive token offering a.k.a. dutch auction, airdrops) * Tokenomics generation: you can control how many tokens are distributed or withheld for specific groups, what their vesting schedules will be, and generate graphs and tables to share with users * Staking tools: if you want to allow users to stake their tokens, Paideia can provide a space to do so * User reputation: users can give validation information, build a reputation, and get bonuses for using the platform * DAO customisation: upload a logo, choose from color themes, and select how your DAO is presented to the world. * Treasury management: allowing proposals which include staking the treasury, providing liquidity to earn LP revenue, and other smart contract interactions can be done through the DAO management panel like any other proposal ## Record Keeping * DAO decisions must be tracked and summarized * Graphs will display expenditures, potential ROI per proposal when possible * Some proposals can have milestones tracked on chain and execution tracking. This would be required for things like the refundable ICO feature. ## Proposal pre-sets * Payouts: add or import csv for payee details. Run your payroll or pay to a group, based on DAO decisions. * Automated Recurring Payouts: Schedule payouts at a predefined time. This contract can be voted in place by DAO members, then canceled by DAO proposals as well. * Yield Management: Options to earn interest by providing liquidity or other treasury management options which can be proposed to the DAO. * Token Buyback option - the DAO can vote to buy back tokens at specific market rates on specific DEXs. ## Vote Delegation DAO members who don't have enough time to focus on voting, but would like to maintain ownership of their tokens should have a way to delegate their votes to other users. This feature will be including at some point after MVP when resources are available, but it is a highly requested feature and will be prioritized. # Governance structures When users initiate a DAO, they will be asked to choose from some structural pre-sets. DAOs can encounter issues with scalability and resilience, and there are different approaches to solve these problems. Highest resilience is not very scalable. The extreme example is an absolute majority voting mechanism: every member must vote on every decision, and at least 51% in favor would be a passing outcome. Requiring too much attention from a large number of DAO members makes the system unscalable which is why organizations typically become less effective at decision making as they grow. Having everyone vote on every decision is slow and doesn't always follow a logical path or vision. As a DAO grows in size (number of agents), and scope (which comes with more fund allocation decisions), the DAO decision-making system must scale to allow for a higher number of effective decisions in a given period of time. The problem is, focusing only on scalability is not very resilient. When very few members get to represent the larger majority's decisions, there is a high chance those decisions won’t align well with the opinion of the majority. Requiring too little input from the majority creates a potential for a lack of resiliency to faulty decisions. Since not everyone can give their full attention to every vote, scalable resilience is when the DAO decisions closely resemble the global opinion of all members, but where votes do not require attention from everyone. To try and find balance between these trade-offs, Paideia will offer various governance structures. When Paideia is first released (the MVP on Ergo), the base governance option will be either standard voting with quorum. The platform will add more options as funding allows. ## Optimistic Governance Optimistic governance is a system where only whitelisted individuals can create proposals, and all proposals will be passed by default unless challenged by token holders. If a proposal is challenged, there will be a vote available to all DAO members to determine whether the proposal passes or not. This system is highly scalable because there can be a small number of individuals who create proposals, and as long as those proposals are not unreasonable, the majority voters will likely not challenge them. Anything unchallenged passes automatically, so a vote is not required. This is why its very scalable. It maintains some level of resilience because anyone in the DAO can challenge a proposal. One drawback can be that if a malicious actor holds a whitelist position, they could submit many proposals to try to sneak through one that is not in the best interest of the DAO. It is difficult for everyone to monitor all proposals. So to mitigate that, each proposal submitted by whitelisted individuals requires them to pay a collateral. If the proposal goes through unchallenged, the collateral is returned to the proposer. However, if someone wishes to challenge a proposal, they must put up an equal collateral. The outcome of the vote determines who gets to keep the collateral, and the losing side's collateral is distributed to voters. This means that a malicious voter can't just block all proposals for the fun of it, since they must put up their own money to do so. It also means a malicious proposer will be financially disincentivized to submit proposals that likely won't pass. ## Holographic Consensus Originally proposed by Ralph C. Merkle, this form of governance attempts to eliminate several of the known drawbacks found in the modern democratic voting process. \[[1](http://merkle.com/papers/DAOdemocracyDraft.pdf)] Because this system is significantly more complex than the others, it will not be offered in the first iteration of Paideia, but will be added later as the details are worked out. Holographic consensus connects a prediction market to the democratic process, and rather than having individuals vote on proposals, it allows them to rate their satisfaction with the decisions based on how they feel those decisions affect their individual welfare. The system can be rather complicated to explain, and thus is beyond the scope of this document. A future document explaining Holographic Consensus will be produced and shared with the community prior to this functionality being added to the Paideia platform. # Voting Mechanisms ## Token-based quorum voting The default voting system will be token-based quorum voting. A quorum means a minimum number of available votes are required to pass. IE if a quorum is set to 50%, and there are 100 total votes, then at least 50 votes must be cast or the proposal automatically fails. Once the quorum threshold is reached, the decision with the most votes wins. This type of voting mechanism can be difficult to get right, because if you reduce the quorum percentage to increase scalability, requiring fewer voters to pass proposals, resiliency is reduced by making it too easy to push through malicious or just ill-conceived proposals. Paideia will have balanced default values, but DAOs can adjust these through proposals after inception if they find their settings aren’t working well. ## Quadratic voting Quadratic voting uses a calculation to optimize voting power so that if, for example, 10 voters have 1 vote each, that will count for more than if 1 voter submits 10 votes. This works well for DAOs to prevent wealthy whales from controlling all the decisions. > \[The] number of contributors matters more than \[the] amount funded. This pushes power to the edges, away from whales & other central power brokers, \[which] creates more democracy in public goods funding decisions! 🦄 \[[1](https://wtfisqf.com/)] Quadratic voting is a setting that can be chosen at DAO initiation, or added later through a proposal. ## Single choice voting Voters can allocate their entire voting power to one choice. This is the default and typical voting mechanism. ## Additional Voting systems ### Approval voting Voters may select multiple choices, and their voting power is spread equally between each choice. ### Ranked choice voting (IRV) In IRV, voters rank their favorite option as first choice and then indicate their second and additional back-up choices in order of preference. Votes are counted in a series of rounds to ensure that as few votes as possible are wasted. In each round, one of two things happen: either a winner is found, in which case all votes in excess of the requirement to win will be redistributed to each voter’s second choice, or no winner is found and the lowest voted choice is removed, in which case those voter’s votes are redistributed to the next choice on their list. The *election threshold* (how many votes required for victory) is determined mathematically based on the guarantee that that selection can’t lose. > Eg: three options to be selected would make the winning threshold 25%, since if one option had more than 25% of the vote, it’s impossible for three other options to get more votes than it, because that would add up to more than 100% of the votes. With four options, it’s 20%, and 17% for 5, and so on. Any options that exceed the election threshold will be elected that round. Any votes above that threshold go to the totals of the next option on those voters' lists. If no option has more votes than that threshold, the one with the fewest votes is removed and the next option on those voters' lists is used in the next round of counting. How does this work for a DAO? One example would be if we had a specific budget in mind, and a few choices to spend it on. For instance, perhaps there is $10k in the treasury and we'd like to spend $5000 on marketing, $5000 on development, and $5000 on redistribution to DAO members. You could setup ranked choice voting, and each voter could rank their favorites. The top 2 would receive the funds. With Paideia, there will always be a "No" vote as well. If you'd rather the DAO not spend those funds on any of those options, or you think the numbers don't make sense, you can say that in the discussion and vote down the proposal entirely. ![](/files/lJI3VWfy6Rlv4fsMqjC6) ### Weighted voting Each voter may choose how to spread voting power across any number of choices. This voting method was first introduced by Float Protocol with (a fork of Snapshot). # Token Issuance Mechanisms There are multiple ways to raise funds and issue tokens in the crypto space. We propose to allow DAOs the option of using various pre-built tools to issue tokens to the community. DAO managers will also be able to design their tokenomics on the platform. They can use a form to determine what tokens are distributed through private or public presales, how many are airdropped, if some are reserved for staking rewards. They can also reserve some for various treasury allocations, team tokens, or advisor issuances. Each category can be set up with a different vesting schedule, and then Paideia will generate graphs and tables to outline the tokenomics structure in a visual way. Once the tokenomics have been determined, a DAO management team can choose to release the tokens in various ways: ## Direct Sale (FCFS) This mechanism uses a signup form where users will pledge to donate to the project in exchange for tokens. Once approved, a contribution form will be available and users will be able to send specific cryptocurrencies in exchange for issued tokens. The DAO can determine the vesting period and other parameters. ## Interactive Token Offerings Similar to a “Dutch Auction,” this method will allow users to set a min and max market cap that they are willing to purchase tokens for. Using an algorithm, price will be determined once equilibrium is reached, and those that bid the highest will have the first opportunity to acquire tokens at the determined value. This will be modeled after the IICO dApp created by Truebit. ## Airdrops A DAO can provide funds to any number of users through airdrops. The list can be added manually or a .csv file can be uploaded. ## Refundable ICO This will give DAOs the option of allowing refunds. There can be different parameters such as time-frame, milestones, etc. One example would be a DAO that is formed to build some software. Deliverables can be determined before-hand with quarterly milestones, and each quarter the DAO is issued the appropriate funds. If a token holder does not feel the DAO is meeting their obligations, they will have an option to refund the remainder of their tokens for the initial purchase price. This would have the effect of self correcting prices on the open market. For example, if a token was sold for 10 cents, and the market value has dropped to 9 cents on decentralized exchanges, most users will opt to refund their tokens. The ones that choose to rebuy at the lower rate of 9 cents for an arbitrage opportunity will push the price up until it reaches parity with the initial purchase price of 10 cents. If the DAO is truly failing at its obligations, users will not buy back in, regardless of arbitrage opportunity. If the DAO is succeeding, the price will balance out and the DAO will be able to continue their work. # Tokenomics This project will have a token for the IDO. The PAI token will be required to use the platform. Generating a DAO and using the features will come with an associated fee shared with the Paideia DAO and Paideia token stakers. This is a community run and community built project. All development will be open source and anyone can contribute to the code-base. There will be a max supply of 200M Paideia tokens distributed as follows:
NameNumber of Tokens% of Total SupplyTGE IssuanceEmission Frequency1st Emission Date (MONTHS from TGE)Emission Length (MONTHS)
ErgoPad Stakers28,000,00014%0%Daily012
Seed Round36,000,00018%0%Daily09
Strategic Round20,000,00010%0%Daily06
Liquidity (Locked)16,000,0008%100%-00
Marketing20,000,00010%50%Monthly124
Staking Rewards40,000,00020%0%Daily048
Airdrops2,000,0001%100%-00
DAO Reserve16,000,0008%10%Quarterly016
Advisors6,000,0003%5%Monthly36
Team16,000,0008%5%Monthly612
![Chart](/files/u5uULfoYPoG7UFCCQpoK) ![Chart](/files/u1tFR70bDQsjKbKVkogt) ### # Roadmap ### 2022 #### Q1 * Begin UX development, producing prototypes to show the community - Completed * Complete the white paper - Completed * Create social media accounts, and begin community outreach - Completed * Fund-raise rounds - Completed * Begin work on smart contracts and project back-end code - Completed * Begin work on front-end along-side the UX team - Completed #### Q2 * Continue work on front-end code and start launching alpha testing of some features with the back-end team - Completed * TGE and IDO - Completed * Staking begins - Completed #### Q3 * Front- and Back-end consolidation: Teams will collaborate to create the necessary API endpoints and get the front-end functioning - Completed #### Q4 * Web 2 Launch - Completed ### 2023 & beyond * Public MVP Release * Add additional governance structures and voting mechanisms * Allow DAOs to interact with smart contracts (by vote) * Cardano smart contract development and implementation begins * Stand-alone tools: Paideia smart contracts work whether the website is functioning or not. End-users need software that they can run to interact with their DAOs that doesn't rely on any third-party web server.