‍Automating wealth creation on the blockchain; The PieDAO Story

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PieDAO - The Introduction

From the beginning of time, humans have been on a quest for a better life. This entails better environments, better lifestyle, better healthcare systems, name it. To create anything better, you need a good amount of funds (money) and to get funds, you need access to opportunities.

For a long time, access to great opportunities have been given to only a few people creating a really high barrier to entry for anyone who wants to get wealth. Now, cryptocurrencies have made wealth creation and management more accessible to people due to its decentralized and trustless nature. However, creating wealth on the blockchain needs a high amount of technical knowledge, active monitoring of industry trends and a high amount of money for transaction fees. For this purpose, PieDAO built products that would give anyone interested in creating wealth an opportunity to do so passively without necessarily having deep technical knowledge.  

How this is achieved is the community driven approach that PieDAO is built on. Just like many DAOs, PieDAO is governed by the community based on a token which gives people access to the community but different from many DAOs, membership is not just for HODLers but for people willing to stake their token for a period of time while being able to vote for the future of PieDAO. This gives all members of the community a true sense of ownership, inclusiveness and financial transparency.

The $DOUGH which is the governance token of the PieDAO is what connects every member together as it allows people all over the world to take decisions on products and strategies that affect the growth of the DAO.

PIEs

The core products in this DAO are a basket of assets known as PIEs. They are made specifically for people who are too busy to  follow up on the trends in the DeFi space and people with little or no starting capital. These PIEs are indices of ERC-20 tokens which are forged by combining underlying tokens to form an index.

The price of each PIE is either the average combined value of all underlying tokens making up the Net Asset Valuation (NAV) or the value of the token on centralized and decentralized exchanges which may go above or below the Net Asset Value. This price of any Pie listed on exchanges is known as the Market price.

There are two major categories of PIEs that are available in PieDAO, they are known as:

• Balancer Smart Pools
• PieVault

Balancer Smart Pools

As Automated Market Makers (AMMs), these tokens have a fixed percentage of yield which is rebalanced as users interact with the liquidity pool. Holders of smart pools earn yield from swapping fees generated as users buy and sell underlying tokens in a pool. Every Smart Pool Pie is charged a streaming fee of up to 0.7%.

The products that fall with the Balanced Smart Pools are highlighted below:

Balanced Crypto Pie (BCP)

In November 2020, a community forum post was made to develop the Balanced Crypto Pie (BCP) which is the broadest asset allocation in a single token. BCP is a combination of three major crypto products with each having an almost equal part of the Pie. They are:

• Wrapped Bitcoin ($WBTC): 33.33%
• Ethereum ($ETH): 33.33%
• PieDAO DeFi++ Index ($DEFI++): 33.34%

The PieDAO DeFi++ Index which is a Pie on its own however has thirteen (13) underlying tokens that make it up. The interesting thing about including the $DEFI++ is that it makes the $BCP a flexible index in that when tokens are added or removed from $DEFI++, they automatically are added or removed from the $BCP. Also, single tokens within PieDAO can still be added to $BCP if voted for at any time (e.g. PieDAO Data Economy Index).

PieDAO DeFi++ ($DEFI++)

The DEFI++ Index is a combination of large and small cap projects with a 70/30 percentage allocation to the large and small caps respectively. The large cap index is the DEFI+L while the small cap index is the DEFI+S. 

The concept here is to include market leaders and innovative projects in this pool. Projects span across various services in the DeFi space ranging from decentralized stablecoins (Maker), derivatives (Synthetix), price oracles (ChainLink) to layer two scaling solutions (LoopRing) and beyond. The underlying tokens are held safely in the PieDAO treasury rebalancing according to market price change in real time.

For PieDAO, diversification is the way to go for indices as they have historically shown to yield better returns for holders. 

DEFI+S

DeFi+S is an index that contains small cap DeFi products with six (6) underlying products including $BAL, $UMA, $LRC, $REN, $PNT and $MLN.

PieVault

PieVaults are yield farming and Meta Governance indices which allows $DOUGH holders to vote on underlying tokens as well as earn from them. Unlike the Balancer Smart Pool which are natives of Balancer, PieVaults are native to PieDAO.There two products in this category, they are:

• $PLAY
• $DEFI+L

PLAY

$PLAY gives its users the chance to hold an index that is based on tokens building the future of the Metaverse. PieDAO and NFTX have teamed up to expose $PLAY to the most comprehensive products in the NFT/Gaming space thereby producing a highly powerful index. There are fourteen (14) underlying tokens in $PLAY currently with the following composition:

• MANA: 18.53%
• ENJ: 18.53%
• SAND: 12.28%
• UOS: 10.05%
• RFOX: 9.06%
• AXS: 8.23%
• NFTX: 6.40%
• RARI: 4.42%
• ATRI: 4.31%
• GHST: 3.53%
• SOCKS: 1.68%
• MUST: 1.18%
• PUNK-BASIC: 0.90%
• MASK: 0.90%

DEFI+L

DEFI+L is the largest index within the PieDAO indices. It comprises only large cap products (basically blue chip) that have a high potential for massive growth in the DeFi space. It was migrated from smart pool to PieVault so that holders can earn yield on the underlying tokens that make up the index. The underlying tokens include:

• LINK: 23.92%
• MKR: 20.44%
• Aave: 14.68%
• YFI: 12.99%
• UNI: 11.35%
• COMP: 6.37%
• SNX: 6.10%
• SUSHI: 4.11%

Oven

PieDAO is interested in making the platform accessible to a wide range of people interested in DeFi. However, due to the high cost of gas fees in minting tokens in PieDAO, there is a challenge for many who have little capital but want to participate in buying or minting tokens. 

For this reason, PieDAO created a product known as the Oven where people can mint tokens by adding it to a pool where it is minted alongside other people’s token thereby sharing the cost of gas fees and bringing down the price by as much as 97%.

How it works is that you put $ETH into the oven and wait. Once it gets to 10 $ETH, the baking will begin and upon completion, you can then withdraw your Pie from the Oven. A minimum of 0.1 $ETH is required to send to the Oven

Governance in PieDAO

PieDAO being a decentralized organization, does not have a central body managing or controlling the process, products  and strategy. It is done by a community of $DOUGH holders. $DOUGH is the Governance token and everyone who holds it, has a right to propose ideas and vote decisions that will affect the growth of the DAO either positively or negatively.

Governance Mining

This is a concept that aids rewards for the community. Through mining, members of the community ($DOUGH holders) can stake their $DOUGH for rewards. When you stake your $DOUGH, it becomes veDOUGH and it shows your commitment to long term participation in the governance of the DAO and receiving rewards known as Rewards PIE. Rewards PIE are used to distribute revenue to veDOUGH holders in the PieDAO community. Revenue distribution is broken down into three (3), they are:

1. 60% is directly distributed to veDOUGH holders
2. 25% is used to compound the treasury principle
3. 15% is used to cover operational costs.

The condition for claiming rewards when staking $DOUGH include:

• veDOUGH holders who did at least one vote during the last 30 days are able claim their rewards.
• veDOUGH holders idle for >90 days have their rewards redistributed to everybody else.

Details of the discussion of this concept is found here.

Meta Governance

Meta Governance is a concept that Index protocols such as PieDAO are implementing to give their members more power. When a user holds the $DOUGH, the person is able to vote not just on PieDAO but also on the proposals by underlying tokens that the index is housing. However, for PieDAO, Meta Governance is only possible for PieVault since it’s based on PieDAO’s infrastructure. So an index protocol such as DEFI+L will fit into this category.

A committee was formed and the job of voting on underlying protocols was delegated to them so they can pretty much vote 24 hours before the end of the voting process on those protocols. Details on the proposal can be found here and the snapshot, here.

Pie Improvement Proposals

Pie Improvement Proposals (PIPs) are a decision making instrument within the DAO. If a decision is to be voted on, then it ought to have been written as a proposal so that members can vote. For a proposal to be successful, it has to go through the following process:

• Discuss an idea in the forum to know if it is worth going deep into and if it looks good by the interactions of members of the community then we move to PIP. It is usually high level without much details on the model.
• Write the Pie Improvement Proposal (PIP) which should contain more details including the model, the approach, the workings of the idea, concept or initiative.
• A snapshot poll is created and voting a PIP is how members pledge their support FOR or AGAINST a proposal by voting on the PIP. 
• Depending on the PIP, the voting may stop at Snapshot or proceed to Aragon if there will be deployment of treasury funds to the proposal.

More details on PIPs can be found here.

Voting for all Critical Decisions

Product Decisions

Core product decisions in PieDAO revolve around the voting process for all products that are currently available. One of them is $PLAY.

$PLAY was created to gain access into the Metaverse and crypto gaming world. A combination of virtual ownership and crypto looks like what the future is about. The community voted for this product to be created and it has gone on to explore more underlying tokens. The written proposal in the Forum can be found here and the snapshot, here.

Another decision taken was the creation of the Balanced Crypto Pie (BCP).

$BCP which is a combination of wrapped BTC, ETH and DEFI++ was voted for to be one of the PIEs to be created in PieDAO. A detailed information on the proposal is shared here and the snapshot vote, here.

Process Decisions

A major process decision is the institution of a voting framework in PieDAO. This proposal broke down the process every proposal will go through to be accepted and voted FOR or AGAINST. It also differentiates the improvement proposals from the generic proposals. To learn more about this process, kindly view here. The snapshot poll can also be found here.

Also, voting was historically meant for $DOUGH holders, However, a proposal was developed to change that to veDOUGH holders. That is, only people who stake their $DOUGH will be allowed to vote on the snapshot for any reason. More reasons for this decision are to deploy the staking contract, deploy the Rewards Pie, distribute DAO revenues to veDOUGH holders according to the revenues distribution breakdown. The full proposal is documented here while the snapshot poll is here.

Treasury Decisions

Formalizing the budget for operations and grants was one of the major treasury decisions made via voting. The treasury funds would be managed by the Multi-sig with the following functions:

• Determining and distributing protocol grants.
• Determining and distributing community grants.
• Facilitating business development and integrations.
• Identifying and engaging analytical firms.
• Determining and distributing legal + DAO consultation grants.
• Identifying and executing key hires.
• Engaging security firms.
• Continue executing costs related to infra and smart contracts like the Oven.
• Hire UI & front-end development.

The details on this proposal can be found on Snapshot here.

Hiring Decisions

A proposal for creating a community contribution initiative to hire two community leads for a 4 month trial period and the community voted to compensate them with 3000 $DOUGH per month. These leads would work part-time across different time zones and contribute to the growth of the community. To learn more about this decision, view the proposal here and the snapshot here.

PieDAO Treasury

PieDAO's treasury is managed by the multisig. The functions of the multisig has been stated earlier in treasury decisions. However, in order to maximize the funds in the treasury, there needed to be a team that would advise and help allocate funds to the right earning resources. A committee was setup to drive this and was called the Treasury Farming Committee.

Treasury Farming Committee

This committee is a group of independent professionals who provide suggestions to PieDAO on ways to allocate and utilize its treasury. The goals of the committee are:

1. Diversify: Maintaining an allocation that lowers the risk of concentrated exposure and ensures operations can continue during bearish market conditions.
2. Positive inflow: Ensure returns on treasury farming and protocol exceed the cost of operation and bring value to token holders governing the protocol.
3. Aim for perpetuity: Creating the condition to enable the DAO to operate forever.

Conclusion

PieDAO is building an entire ecosystem around DeFi, the Metaverse and NFTs combined via various indices available to anyone who is interested in building wealth on the Blockchain. Whether you are interested in large cap products or small cap products or gaming or NFTs or the Metaverse, there is a product available for you.

The awesome thing about PieDAO is its focus on the community and how they are coming together to not just use the products but to build them. As the DAO continues to expand, it is expected that more wonderful ideas will be discussed and more innovative products will be built.