Objective of the eSports DAO

To create a DAO (Distributed Autonomous Organization) whose purpose is to maximize the value of its member tokens by funding, and oversee the operations of, an eSports organisation that returns a percentage of their revenue to the DAO.

Structure of the eSports DAO

Overview

The eSports DAO is based on the specifications for a DAO governed by a prediction market (i.e. futarchy) outlined by Ralph Merkle in his draft paper DAOs, Democracy and Governance and uses a modified version of Robin Hanson’s futarchy, as detailed in Shall We Vote on Values, But Bet on Beliefs?. Governed by futarchy built on top of the Gnosis prediction market, The eSports DAO will implement those decisions which are both within it’s scope and will maximize the value of its member tokens.

Scope

The eSports DAO’s scope will be to provide funding and oversight to an eSports organisation that it elects to represent it in the global eSports arena.

Goal

While staying in scope, the eSports DAO will at all times seek to maximize the future value of its membership tokens through whatever means it sees fit.

Member Tokens

The eSports DAO will be made up of 1431 member tokens which conform to ethereum’s ERC20 token standard and are divisible to 17 decimal places. The tokens themselves, rather than the token holder, are considered members of this DAO. Membership tokens represent a relative claim to any ETH held by the eSports DAO and can be burned at any time in order to pay out the token’s relative portion of the DAO’s ETH to whomever is holding the member token.

Proposals

Any member token may submit a proposal to the eSports DAO with an optional ETH deposit. Should a proposal pass, any ETH deposited will be returned to its sender. However, should a proposal fail, any ETH deposited will be transferred to the eSports DAO’s ETH holdings. All proposals have four necessary features:

Effective date — This is the adoption date plus the time for implementation. Implementation strategy — This is a text describing the details of the proposal. Cost — This is the cost of the proposal, denominated in ETH. Recipient Address — This is the address of the entity tasked with carrying out the proposal.

Once submitted, there are two possibilities, the proposal is either accepted or the proposal is rejected. Upon submission, three binary markets are created on the Gnosis prediction market:

PS: Proposal in scope. [yes/no] — Decides whether or not a given proposal is within the defined scope of the eSports DAO. PV: Proposal will increase the value of member tokens. [yes/no] — Predicts whether or not the proposal would increase the value of member tokens PP: Proposal will pass. [yes/no] — Predicts whether or not both of the other markets will resolve to yes.

If, for a period of 1 week, the value of PPyes > PPno, then the proposal will be accepted, the deposit returned to the proposer, and the defined amount of ETH transferred to the recipient address. Otherwise, the proposal will be rejected and the deposit will be transferred to the DAO’s holdings.

DAO Improvement Proposal (eDIP)

A second type of proposal exists, with the specific purpose of making changes to the eSports DAO itself. It functions in much the same way as a regular proposal, with a few exceptions. The cost and recipient addresses fields are replaced by a field with a new contract address. Should the proposal pass, the DAO will migrate to the new contract, thus enabling the new/improved functionality specified in the proposal.

Security Market

At all times there will be an active market for whether or not the ETH held in the eSports DAO is secure. If at any point the market indicates that the DAO’s ETH holdings are unsafe (by pricing unsafe higher than safe), all functions with the exception of the eDIP function will be suspended until the market indicates the DAO’s ETH is safe.

Bootstrapping the eSports DAO

Once the codebase has reached a point where all of the basic functions have been implemented and has had sufficient time to be publicly audited, the first phase of The eSports DAO’s life cycle will begin. This bootstrapping process will start with token distribution. Immediately following the community’s decision on which instance of the contract to use, there will be a 2 week period in which ETH can be contributed to the eSports DAO and no cap on the total ETH that can be contributed. At the conclusion of the 2 week contribution period, the 1431 tokens will be distributed to the contributing addresses relative to their portion of the total ETH contributed. Any ether sent to The eSports DAO’s address after the 2 week period will simply be considered a donation, and will not return any tokens.

Once this is complete, the eSports DAO will be a fully autonomous entity governed solely by propositions made on the Gnosis prediction market.

Where to After Bootstrapping?

Once bootstrapping is complete, the DAO should move on to its everyday task; increasing the value of it member tokens. Other than the specifications above, there is no pre-defined structure that proposals must take. A logical first step would be for the eSports DAO to hire an eSports Organisation to act on its behalf in the real world. However, the structure of that proposal, and indeed the structure of any future proposal, is entirely up to the proposer. Whether or not a proposal is implemented is entirely dependent on the prediction market.

Credit for this mostly goes to Auryn Macmillan!