DAO's Mission
Overview of the ParaSwap DAO's purpose, means, and main development phases
The arrival of the PSP token marks a new milestone in the project's development. Indeed, a new set of actors โ€” PSP holders/governance participants โ€” are joining the ballet already made of the ParaSwap team, the market makers & various services ParaSwap integrates with or integrating it.
So how does this work?

I/ The proto-governance phase

The DAO's ultimate mission is to coordinate and sustain the network of peers required to run ParaSwap's infrastructure. This is a long-term mission, requiring additional technical developments.
To begin with, the DAO must first assemble and begin to coordinate.
During the proto-governance phase, early participants will define the governance structure and principles together.
Indeed, instead of the team imposing a governance structure on the community from the get-go, the process envisioned is more organic: we will formalize the governance processes and structure together.
To participate, join the Discord and attend the community calls. PSP holders and stakers can verify their ownership to join the holder-only channel.
The proto-governance process concludes once the base principles (constitution) and the proposal framework have been agreed upon.

II/ Tools and means of the DAO

Once assembled, the DAO will be able to vote proposals and handle its ongoing operations.

PSP Token (Ecosystem Reserve)

51% of the total PSP supply (~1B PSP tokens) has been reserved to help grow the ecosystem and the community, through the initial distribution, the ecosystem incentives, and budget for future ecosystem development.
51% of all the PSP are allocated to the Ecosytem Reserve, governed by the ParaSwap DAO
The DAO can allocate and adjust PSP budgets as deemed fit by the holders. However, the ecosystem reserve too is subject to vesting and lockups. The 51% of the total PSP supply of the Ecosystem Reserve will unlock over four years, as follows:
  • The first year after TGE: At first, 1.5% of the total supply is available, and an additional 1% will unvest linearly every month, amounting to a total of 13.5% of the PSP (270M PSP) manageable by the DAO during the first year.
  • For the next three years onwards, 10% (200M PSP) will be unlocked every year.
After the first four years, the DAO will be able to mint additional PSP tokens if deemed necessary to perform its duties, with a maximum cap set at 2% of the total PSP supply each year (40M PSP).
This is the maximum possible, and keep in mind that at this date, the DAO might be using that budget to incentivize peers running the decentralized network enabling ParaSwap services.

Adjusting the protocol parameters

Protocol parameters related to the PSP token or PSP staking can be modified by governance: for instance, the lock-up period for staking has been given the default value of two days. The DAO can decide to extend this.

Forming and funding executive committees

DAOs are well-suited for long-term thinking and planning, but some missions require a team, be it to reach a certain goal or handle continuous operations. The DAO can create, fund, and revoke budgets on executive committees.

III/ ParaSwap's need for decentralized speed

For a swap on any given pair, ParaSwap computes all/most potential routes to find the perfect mix leading to the best price. Yet, this path-finding process is very time-sensitive: Ethereum produces a new block every 15s on average, and each new block can bring changes to prices, therefore changing the optimal route.
Thus, the computation for the route optimization has to be done off-chain currently to provide a satisfying user experience.
To maximize ParaSwap's long-term efficiency and resiliency, we need a more decentralized and robust infrastructure to handle these computations. Solving this challenge is a mission both for the team and the DAO.
While a technical solution is required, and the team is already working on it, we know that implementing such a solution will require a network of peers providing the computing power required for the pathing computation in a timely fashion. This network will need to smoothly coordinate and this is where the DAO will ultimately shine.
Last modified 16d ago