XBE Finance

What is a DAO?

A decentralized autonomous organization (DAO) is a software running on a blockchain that offers users a built-in model for the collective management of its code. DAOs are essentially community-led entities with no central authority. A DAO is governed entirely by its individual members who collectively make critical decisions about the future of the project, such as technical upgrades and treasury allocations. Each individual member of the DAO oversees the protocol at some level, which differs from traditional organizations managed by boards, committees and executives.

How do DAO’s work?

To understand DAOs, you first need to understand the technology behind them. Most DAOs rely on blockchain technology and smart contracts, which are collections of code that run on the blockchain. A blockchain is a decentralized, digital ledger which is commonly known to publicly document transactions of different cryptocurrencies. For DAOs, the blockchain can act as a backbone, keeping the structure and rules of each on-chain. In traditional organizations, there’s typically a hierarchy. A formal board of directors, executives or upper management determine the structure and have the power to make changes. DAOs, on the other hand, are decentralized, which means they aren’t governed by one person or entity. The rules and governance of each DAO is coded in smart contracts on the blockchain and cannot be changed unless voted upon by the DAO’s members. Instead of a select few having the majority of say, members of each DAO can vote on decisions together, typically on equal footing. Sometimes, in larger DAOs, teams may form to tackle different aspects of the organization with leaders that have been voted in. That way, not every single member is needed to vote on every nuance. The most important aspect of DAOs is transparency. Every decision within the DAO is pitched, discussed, voted on and documented publicly.

DAO structure

Each DAO is structured differently, but usually, when joining a DAO, you agree to the code in place. It isn’t easy to change that code, and any changes typically require a vote between members.
For XBE’s sake, the DAO will have 5 Multisig members, which means that 3 out of the 5 members will need to sign off community votes in order for them to be enacted. In order for the community to vote, they will need to obtain XBE tokens and lock them for veXBE (vote escrowed XBE). veXBE will allow for the community to vote on proposals that will then need to be signed off by the multisig users. By holding these tokens, members are typically able to own equity in the DAO and help shape the DAO’s future. Anyone that has veXBE will be able to vote on proposals. After the vote has concluded and the results are in, the multisig signers will then need to sign off the proposal so that it can then be enacted.

How to get involved?

To be a community member/contributor within the XBE DAO, you will need to have XBE tokens that you will then need to lock up. The longer you lock up for, the more veXBE you will receive. By locking your tokens, you will be earning XBE rewards at a boosted earning rate (ie. If you lock for the full term of 100 weeks, you will earn XBE rewards at max boost otherwise known as the maximum earning rate). In line with this earning structure, you will also receive veXBE which will allow you to vote on governance proposals, and make you eligible for airdrops of L2 tokens in the future. Our next imminent airdrop being XBF tokens (Fantom governance token). Users can also apply to become a Multisig signer. Any community member will be able to volunteer for the role of multisig by submitting their nomination to [email protected], and the final vetted list of candidates will be made available for community vote in a coming proposal.

Why DAOs?

One of the key takeaways within a DAO is transparency. The details of each proposal are readily available, voting history is continuously recorded, and even the voting records of particular token holders can be observed. DAOs often call upon the community to build out interesting ideas through these protocols, and individuals with an entrepreneurial mind can freely submit proposals to help lead the future development of a protocol. XBE aims to be a community driven protocol that is fully decentralised. We aim to allow each of us to be on an equal footing enabling for everyone to contribute to the protocol in some sort of way. The best part is that you can choose your level of participation, as long as quorum is met and that there is sufficient veXBE voted on a proposal, that proposal will go through.