🪐Community DAO v1.1

A next-generation decentralized organization that coordinates the resources of a community (human and capital) to sustainably deliver value for members.

Introduction

The invention of decentralized ledger technology and smart contract blockchains such as Ethereum has opened a whole new world of opportunities that made the recent DeFi (decentralized finance) boom possible.

DeFi takes the key components of the tasks done by banks, centralized exchanges, and insurers in the traditional finance sectors (TradFi), such as loans, trading, and margin — and puts it directly under the control of the owners themselves, eradicating the lack of transparency, high transaction fees and slow flow of capital.

Many problems exist with the current billion-dollar DeFi industry. Crypto yield farmers actively seek double-digit interest rates but risk having their digital wealth being stolen by scammers who can do so under the cover of anonymity because of the nature of the decentralized space. Also, because of the relatively low liquidity in DeFi markets as compared to TradFi markets, the volatility that can be experienced in DeFi markets correspondingly is higher, leading to large price fluctuations which can disincentivize investors in a project. Traditional DeFi projects seek to solve this problem through the process of incentivizing the market to provide liquidity to decentralized exchanges. Due to the current market environment with limited liquidity, projects have to incentivize liquidity providers to provide liquidity for their projects over their others in the space and to retain such liquidity in these liquidity pools.

The DeFi 2.0 solution was that of protocol-owned liquidity, where DeFi projects would own their own liquidity instead of relying on external providers, and this resolved the need to compete with other projects to retain liquidity from external providers. This process occurs via the bonding mechanism, where the protocol sells its native token (e.g. UTD) in exchange for an established cryptocurrency (e.g. BTC/ETH/stable coins) or a liquidity pool token (e.g. UTD/USDC pair). The buyer is incentivized to buy these tokens from the protocol as they are typically priced at a discount to the current market price. However, these bonds are usually vested over a period of time. All these inflows from bonding then flow into the DeFi project’s treasury, which will primarily serve the goal of backing tokens, so that these tokens have an intrinsic value and thus a level of support for the price of the token on the market.

Shortcomings of preceding DeFi 2.0 projects can stem from the underlying protocol tokens losing value due to poor treasury management or having non-doxxed founding members who may not have had the relevant experience to manage such large projects, nor the responsibility to protect the treasury due to the veil of anonymity in this space. This has led to prior advocates of anonymity in the blockchain world to switch their stance, and now demand for DAO project founders and committee members to be doxxed and held accountable for credibility, especially when large treasury values are at stake.

Community DAO seeks to usher in the next generation of DeFi 3.0 via its core protocol, which is underpinned by three unique propositions - the Allies Program, Rewards & Utility Program, and Treasury management – along with strong enablers. With this, Community DAO aims to overcome the shortcomings of its prede cessors, and build a long-term, sustainable protocol.

Community DAO was founded by an experienced, versatile team with wide-ranging experiences - spanning blockchain, economics, finance, and more. This provides a strong foundation for the protocol’s build, while maintaining an end vision of having a completely DAO-led protocol.

We also seek to overcome the large price volatility in the prices of the native tokens, by introducing innovative new tokenomics to our native token model, which would incentivize token holders to voluntarily pledge their tokens to our protocol, and a burning mechanism for our tokens in order to reduce the overall token supply.

During the current time of unprecedented uncertainty and volatility in both the DeFi and TradFi markets, we believe that the way forward is through the sustainable growth of a DeFi community where the stakeholders are held equally accountable. Over the long run, we envision that all stakeholders will benefit from this model of prudent on-chain governance and decentralized ownership.