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.

https://medium.com/truebit/exploring-the-iico-interactive-dapp-337e1d09fffe

https://people.cs.uchicago.edu/~teutsch/papers/ico.pdf

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.