[DAO:45db0f5] Decentraland X Powered by Decentraland

Hey @ckbubbles , I think that this comment was taken out of context. This was a commitment by the team in saying that we would personally seed $64k in liquidity to kickstart the DEX as a show of our commitment to the growth and distribution of the DEX. I think if you take some time to dive deeper into our proposal and the value we are trying to bring to the sustainable growth of the DAO and treasury, you may feel inclined to change your mind. Happy to grab a chat and discuss further if there are any outstanding questions that you feel additional clarity would be helpful on. Thank you for the feedback.

The more I see u chat the more you lose credibility :man_shrugging:t2:

Hi all - I don’t think the math is adding up here.

Uniswap and other platforms have much larger liquidity because they have the most competitive fees, the idea that we would skim fees off the top means that we would not attract any significant LP providers and users would end up paying significantly more due to slippage.

It also opens us up to IL issues if we are to put the DAO or foundation funds into it, and is likely not worth the risk compared to using hardened and available platforms.

Decentraland X Powered by Decentraland

This proposal is now in status: REJECTED.

Voting Results:

  • Yes 52% 5,210,493 VP (70 votes)
  • No 43% 4,407,120 VP (22 votes)
  • Abstain 5% 607,429 VP (19 votes)

Decentraland X Powered by Decentraland

This proposal is now in status: PASSED.

Voting Results:

  • Yes 52% 5,210,493 VP (70 votes)
  • No 43% 4,407,120 VP (22 votes)
  • Abstain 5% 607,429 VP (19 votes)

I have taken a thorough look at your proposal for the Decentraland DEX, and honestly, I am coming across a few roadblocks. The first one, and it is a substantial one, is the lack of sufficient technical details and security precautions. This makes me question if we are perhaps overestimating our capabilities, do you see what I mean?

And, about that budget breakdown, my friend? I find it a bit perplexing, I must admit. Could you possibly simplify it for me?

In the Discord you mentioned a PR team but you did not include them in your proposal so that raises many questions about this subject In terms of your team’s experience, it is quite hazy for me. Could you illuminate a bit on their background, what they have done before, especially with decentralized exchanges? Trust is built on understanding & transperency, right?

Speaking of trust, how is the governance of this DEX going to be carried out? Who is going to make the decisions? It is like a puzzle without a solution at the moment. Can you clarify that for me?

Also, just pondering here, but banking our revenue expectations solely on trading volume… does that not seem like we are putting all our hopes in one place?

And hey, I do not see any strategies for managing potential risks. It is not like I am predicting doom, but it always pays to have a plan B, right? It is always better to be safe than sorry!

Lastly, I can not find anything solid on user acquisition and marketing. We need a plan to spread the word about the DEX. Any thoughts on that?

1 Like

Dear Community,

The Grant Support Squad was created to support the grantees in achieving their goals and taking care of the DAO treasury.

After thoroughly reviewing this project, The Squad wants to communicate that we recommend revoking the vesting contract of this project.

According to our governance process, our recommendation will be analyzed by the Revocations Committee, the only body responsible for revoking grants. This triggers an automatic pause of Grant’s vesting contract, executed by the DAO Committee.

The arguments that opened this case are the following:

Timeline:

  • The proposal passed the threshold.
  • The onboarding process started.
    • The Grant Support Squad analyzes if the Grant complies with the Grant program requirements.
    • The Grant Support Squad went through the comments on the Forum and Discord to identify if a community member raised a concern regarding the project.
    • HP submitted a governance proposal to revoke the grant
    • A member of the community submitted a formal request to raise concerns regarding the project.
    • The Grant Support Squad has consulted with our advisors’ consultant. In this case, Agus Mendez from the Protocol Squad team -security advisor- and Henri de Royare, Heavy user Exchange - Buen Bit exchange.

Analysis.

The proposal for the Decentraland DEX lacks essential details regarding liquidity provision, open-source publication, documentation, and security which are crucial for the project’s success.

Based on the information provided in the proposal for the Decentraland DEX, the specific details regarding liquidity provision are not explicitly mentioned. The proposal focuses on the development of the DEX, its features, and the potential benefits it can bring to the Decentraland ecosystem and $MANA holders.

While the proposal does highlight the goal of attracting liquidity providers and mentions that the DEX will provide key trading pairs and competitive trading fees, it does not provide a detailed plan or strategy for liquidity provision.

In fact, if the core contract functionality of the project allocates 60% of all swap fees directly to the Decentraland treasury (as they mentioned), why would this be more beneficial than Uniswap or other DEX that pay more than the percentage mentioned of the fees to the liquidity providers? The project imposes no benefit over existing pools and UI provided by Uniswap, 1inch, 0x, and other DEX platforms.

Without further information, it is unclear how this fee allocation model would attract liquidity and incentivize trading on the Decentraland DEX.

To ensure a successful DEX, liquidity provision is crucial. It involves incentivizing liquidity providers to deposit tokens into the liquidity pools to facilitate trading. Strategies for liquidity provision may include offering incentives and rewards or implementing mechanisms like liquidity mining programs, but none of this was explained.

This grant was requested under the Category Platform, which has the followings Requirements and performance metrics:

  • Requirements.

  • Build in the public, publishing open source code and documentation.

  • Performance metrics

    • The number of contributions made to the main repository of code.
    • Publish the tool or application to the production environment and provide usage metrics.

The concept of this category is to bring value to the Decentraland Protocol.

This proposal aims to create a tool to swap MANA over the SDK. However, this would trigger a big security problem because the translations could compromise users’ wallets and assets, because Native swap operations are, by design, not available on the SDK of Decentraland to protect the user’s funds. While greatly increasing the risk of fraud and losses for the community.

To mitigate that, they proposed auditing the smart contract created, but information regarding how they will perform this action is lacking. Also, the requested budget wouldn´t cover this action´s cost.

Something to highlight. The grantee mentioned that they would use a modified Uniswap V2 Core contract (open source) which receives no updates since the team is currently developing the V3 of the set of contracts and app.

Also, the project doesn’t explicitly mention how they will publish the code and the architecture documentation.

Last but not least, the proposal has another interesting point to mention. They Promise revenue to the DAO treasury, so it looks like the accelerator category would be more suitable for the project and not the category selected.

In conclusion, the proposal for the Decentraland DEX lacks details about a strategic plan for liquidity provision, open-source publication, architectural documentation, and security measures, necessary confidence in the project’s success and long-term sustainability.

For the reasons exposed, In line with governance procedures, we will elevate this case to the Revocations Committee (@dax @MetaDoge @maryana), recommending revoke the vesting contract. This recommendation will temporarily pause the grant’s vesting contract, which the DAO Committee will execute (@HPrivakos @Tobik ). This pause will allow time for the Committee to make an informed decision.

Regards.

3 Likes

Hi @alexm, I’m writing here on behalf of the revocations committee. We’ve had an initial discussion regarding this grant and we need the following information from you to make a decision. Please respond within 30 days to the following questions in a reply to this post:

  1. Please justify your choice of the Platform category (as opposed to the Accelerator category suggested by the Grant Support Squad).

  2. Please specify how you will publish the code and architecture documentation as this is a requirement for the category you have chosen.

  3. Please confirm that the SDK discussed in the grant proposal is your own SDK and not the Decentraland SDK. Please also describe how you plan to secure the SDK and provide information regarding an audit of your submission.

  4. Please complete this review with a detailed plan on how you will provision liquidity for DCLx. This plan should address the community’s concerns over how your proposal will accomplish liquidity and a sustainable exchange model.

If you have questions or need clarification, please of course reach out!

3 Likes

Decentraland X Powered by Decentraland

This proposal has been ENACTED by a DAO Committee Member (0x88013d7ed946dd8292268a6ff69165a97a89a639)

Vesting Contract Address: 0xe7C76E2DD9530AEdCfb51fcb5997494401E205b7

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Randomly saw a tweet on Twitter about Solidity.io and remembered that I had seen a proposal from them here, I hope this grant gets revoked.

https://twitter.com/davidtejeras/status/1670076866001084418

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first time mf comes to dao and secures bag after fn other projects. Love to see it from the clowns of the populace and committees.

It was revoked. Revoke grant "Decentraland X Powered by Decentraland"

Was it? Because what you linked to looks like this:

Hey @jar0d , here is the link to the vesting contract that was assigned to the proposal, here you will be able to see it was revoked. Hope this helps

https://vesting.decentraland.org/#/0xe7c76e2dd9530aedcfb51fcb5997494401e205b7

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Nice. That’s lovely news. Thanks.

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It was revoked because the revocation committee is on the case, not because of my proposal which is only at Draft stage. @jar0d @Peanutbutta

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I figured, since the date lined up with Dax asking those still ignored questions above.

I think we can safely say Alex isn’t gonna come back given his recent PR.

Good job team.

Hey @dax , thank you for your message. Below are the answers to your questions, please let me know if you have any further questions or if the revocations committee would like to have a meeting to discuss any items in further detail.

  1. The decision around opting for the platform category was based upon our desire to opensource all code developed for the Decentraland dex product. As stated in our proposal, “all code will be open-sourced to the desired specifications of the Decentraland DAO in order to maintain security, decentralization, and transparency for the community.” We hope to connect with DAO admins to discuss the best way to do this, and allow collaboration and transparency for the product.
  2. All code will be hosted in two public repositories. This will include the dex, including the frontend code, smart contracts (with deployment scripts), and SDK. These pieces will allow anyone to deploy their own copy of the dex, host an offline interface, or integrate with the included SDK. All code will be licensed under the MIT free software license. Alongside the repository, there will be a gitbook describing each front-end flow. This will be useful for new users to understand how to perform specific actions for example swapping or adding liquidity. Short explanations of what these actions do will also be provided. All smart contracts will be documented in Natspec and included documentation on each method inside of all contracts. This will include expected inputs and their types, expected outputs and types, a short description of the method, and potential use cases. Each method inside of the SDK will be documented inside of a public gitbook explaining what the function does expected input and output as well as a description of use cases these use cases will also be pointed towards the first party dex where users of the SDK can see how the sdk is implemented, for example how to fetch quotes.
  3. The SDK will be used solely for use with the proposed dex this will separate NPM package allowing developers and creators to integrate with the on-chain first-party dex. This package will have native integration with eth-connect to enable the best integration with Decentraland scenes. The sdk will be open source for easy maintainability, Asystem of access control, version controls, and alongside standard software composition analysis tools will lay the foundation for a continuously secure SDK. A platform audit will be conducted by CertiK prior to launch.
  4. In our role drafting this proposal, we were well aware of the requirements for liquidity in order for the DEX to be able to function properly. As we communicated many times in discord, it would have been disingenuous for us to promise an exact amount of liquidity that would be able to be raised by the DEX. Our objective with this DEX was to minimize the amount of cost and lift required for the community, so we did not make a request of the DAO itself to fund the liquidity for the DEX, we instead opted to approach this through a strategic marketing effort as we outlined in several discord messages.

As I mentioned on May 31st “As the default swap across the DCL ecosystem we expect to receive a significant amount of organic traction around the launch, we will also do a marketing push both internally in our network of investors, vcs, and LPs, and publicly via Twitter, our PR team, and other avenues. We will also encourage DCL community members and $MANA holders to consider providing liquidity on the DEX. We have also explored aggregation as a fallback plan in the event that liquidity raised is insufficient, however we feel confident in the ability to attract liquidity. Decentraland also has lots of opportunity for onboarding of first-time liquidity providers through gamification in the DCL ecosystem through creative integration of the SDK integrated with native blockchain provider libraries.” On top of this point, on May 22,I personally committed to providing $64,000 in liquidity on the DEX as a sign of good faith prior even to our grant being approved as a sign of good faith. “I am happy to commit to personally putting $64,000 in liquidity into the DEX as a show of good faith if folks would like me to.”

Liquidity will have to come from many sources and will be an ongoing objective. We understand the undertaking that is required to make this a success and we hope to receive support from DCl as we work to make this product a success. We appreciate your consideration and hope to have your support.

1 Like

At this point, you need to speak to the tweet about your shitty code costing people 10s of thousands of dollars.

I mean, honestly, wtf are you even doing here? Come on.

Hi Community,

Our team, the Revocation Committee received a request from the Grant Support Squad to discuss this case and make a decision in regards to the proposal “Decentraland X Powered by Decentraland”:

As a result of discussion and the final vote, we suggest that this grant should be revoked.

Revocation Committee snapshot vote result:

https://snapshot.org/#/revocationscommittee.eth/proposal/0xade418abb47ec99a90d98ad6e0aa7ae4c85de13bb54dc863f0639608f9f138eb

Reasoning for revocation:

This proposal has various points worth scrutiny.

  • Category choosing
  • Feasibility (liquidity raising)
  • Security Risk
  • Community sentiment

Those points are well discussed in the forum and the combination of these points raise enough concern, in our opinion, to revoke this grant.

Reasoning against revocation:

The wrong category argument, from my perspective, is not strong enough to revoke this grant. The only requirements, at the time of writing, is that the code for such a project be open source, which the author of this grant proposal committed to. Furthermore, I very much disagree with the precedent it sets to revoke a grant that was voted in by the community based on what in my opinion amounts to little more than the possibility of what could go wrong.

Further recommendations:

  • We recommend the GSS update the platform category documentation to have more meaningful rules, such as security considerations and expectations.
  • We recommend the grantee to attempt the bidding/tendering process with full documentation as to how a DEX could be achieved, accounting for security and liquidity.

Thank you!

Revocation Committee