Thread by @0xRafi

1/ $EGT @ElasticDAO (elasticdao.org). A super innovative approach to governance, an elastic token backed by $ETH reserves, some brilliant game theory, and an amazing team including former @SushiSwap devs..

This is the most excited I’ve been about a project in a while..

2/ @ElasticDAO is a platform to manage decentralised organisations and make governance fairer.
Projects will be able to launch their DAOs and governance tokens through the platform, and ElasticDAO itself is the first of them all, with $EGT as its governance token.

3/ IMO, ElasticDAO’s solution to governance achieves three main goals. It is whale proof, it is free-rider proof, and it is very much a “skin in the game” approach where token holders are directly incentivised to participate and contribute to the project’s success.

4/ This is because $EGT tokens are directly backed by the projects $ETH treasury. Anyone unhappy with where the project is going, can exit by redeeming and burning their $EGT in exchange for their share in the $ETH treasury (there is currently 2,814 ETH in the treasury)

5/ On one hand, this incentivises voters to only vote for expenses that will be beneficial and bring value to the project over the long term, since these expenses will be taking $ETH out of the treasury and decreasing the amounts backing each $EGT.

6/ On the other hand, in case of an attempted hostile take-over by whales buying a large part of the supply to take control of governance, token holders will always be able to redeem/burn their tokens and exit with their share of the treasury as a last line of defense.

7/ And here is where it gets really interesting: when a new participant wants to enter the DAO, they can either purchase $EGT on exchanges (so buying voting power from someone else) or mint new $EGT through @ElasticDAO's platform by paying $ETH that will go to the treasury.

8/ For each new participant minting tokens, the price in $ETH and the number of tokens necessary to reach “full voting power” increases a little, and all existing $EGT holders get rebased up, so that they maintain the same proportional voting power they already had.

9/ So assuming that in the previous token mint the amount of full voting power was 200 $EGT and cost 60 ETH, on the following mint, full voting power may be 206 $EGT and cost 65 ETH, and all existing $EGT holders will be rebased up on a 206/200 basis, so nobody gets diluted.

10/ The numbers above are made up, but the 'moon' maths behind this is made so that for each new mint of full voting power, everyone gets rebased up to avoid dilution, and the amount of ETH backing each $EGT token increases by 3%.

11/ Now to the actual voting side of things. For each governance vote, voters are rewarded with a positive rebase (currently set to 5% but this may be changed through governance), and if the vote doesn’t reach the minimum quorum, non-voters are punished through a negative rebase.

12/ Any wallet containing an amount of $EGT above full voting power (currently at 369 $EGT) will have their votes counted only up to that amount, and will only get the 5% reward calculated on that amount.

13/ The result of this is that both whales holding more than full voting power and free-riders that don’t contribute to governance end up getting diluted, while active governance participants keep getting rebased up until they eventually reach full voting power.

14/ Frankly, I have been going through these mechanics in my head for days and any way you look at it this is simply brilliant. It manages to solve some of the biggest issues in project governance, while still being a great profitable investment for active governance participants

15/ As mentioned earlier, ElasticDAO will be a platform for other projects to launch their DAOs and gov tokens on. This is where the project will be able to generate revenue, which will go to the project’s treasury and back the value of $EGT, so the virtuous cycle continues.

16/ There is also much more to come in terms of governance solutions. The team has already created modules that will allow for auto execution of smart contracts through governance, and will soon implement on-chain voting on ETH L2 (voting happens through @SnapshotLabs for now).

17/ Another module coming soon will leverage @Superfluid_HQ to create a solution for DAOs to distribute streaming salary to their team members, and many other amazing ideas are being discussed. The first snapshot vote (and then first voting rewards) goes live tonight at 9pm UTC.

18/ The team behind all this includes 4 devs, 2 designers, 1 marketing and a lot of help from contributors of other projects, so ElasticDAO contributors have collectively worked on projects including @SushiSwap, @PieDAO_DeFi, @harvest_finance, @NFTX_, @AlchemixFi and others.

19/ In particular, part of the core team were members of the @SushiSwap team who decided to leave the project during the Chef Nomi drama, and got to work during the following 6 months creating a better and fairer governance solution.

20/ The team is constantly streaming their coding sessions on discord, and is probably the most helpful and available team I have ever seen on a crypto project. This good-will feeds back into the community, who are super active in discussing all aspects of the project.

21/ It’s difficult to do the usual token allocation and metric analysis for a fair launch + rebase project, but current supply of $EGT is 34,882 which at $460 per token gives us a $16M MCap. That is, until the next minting and rebase!

22/ In short I couldn’t be more bullish, and the future looks bright for ElasticDAO.
I have already seen other projects starting to approach the team about launching their DAOs on the platform, the treasury is already holding 2,814 ETH, and the project is not even a week old!

23/ A few links to help you dig deeper:
- Project documentation: docs.elasticdao.org
- Medium: medium.com/elasticdao
- Dune Analytics: duneanalytics.com/SimonC/Elastic…
- Discord: discord.com/invite/JhsCVAf