The district0x Power Plant

Fueling a network of decentralized marketplaces

As long as the universe has existed, there has been energy. It is one of the true constants and necessities of existence. From food, to fire, to electricity, to nuclear fusion, to tidal turbines, energy takes many different forms and new sources are consistently discovered. Learning how to better harness and utilize the energy available to us has been arguably the single biggest driver of human progress.

Often overlooked as a source of energy, are network effects. Network effects are a phenomenon by which communities and ecosystems become more powerful as they increase in size and activity. They create barriers to exit for participants and barriers to entry for potential rivals. The usage of platforms that maximize their network effects leads to a virtuous cycle that increases their utility offered to all other participants.

With the rise of Ethereum we have seen the increasing use of tokens within protocols and platforms, designed to incentivize contributors and call users to action, compounding the multiplicative nature of network effects on usage. For examples of this in action, look to the uptick in activity on the Numerai platform since the introduction of the Numeraire token and to the overwhelming success of Status Genesis Block program in growing their community, now with more than 11,000 members in their Slack.

Drawing inspiration from Status, we recently launched our Community Advisor Program to incentivize participation in our Slack channel and quickly witnessed a more engaged community start to take shape. The initial results were so encouraging that we moved to launch our second community incentive program ahead of schedule, implementing our district proposal process which has led to numerous submissions thus far.

If one thing has become clear to us, it’s that tokens have the potential to act as fuel for bootstrapping a network and building an ecosystem around a platform.

district0x Power Plant

Today we present the district0x Power Plant, a proposal for converting funds received during our contribution period into energy to fuel the expansion of the district0x Network and advance the infrastructure it’s built upon while providing stability and liquidity to the market in our formative early days.

The district0x Power Plant is inspired by the Slack Fund, intended to support teams who are bolstering our ecosystem by developing auxiliary modules, deploying new districts, and ultimately attracting more users to the network.

In the event that the contribution period soft cap is reached, we intend to allocate 10% of funds received to the district0x Power Plant, scaling up to 40% of contributions in a maximum funding scenario of $50M raised. Prior to deployment of auxiliary modules and the district creation interface (12–18 months) we propose allocating funds as follows:

Stability Reservoir

Leading up to the launch of auxiliary modules and the district creation interface, developers will be limited in ways they can contribute outside of helping to refine the d0xINFRA framework. During this time we propose making use of a stability reservoir, which will allow district0x Network Token holders to convert their DNT back to ETH at the initial issuance rate.

We believe this measure will allow us to provide immediate liquidity to our community and grant them a way of recouping their contribution should they be unhappy with the progress of the project. It also provides a means of keeping DNT in the hands of those most likely to contribute towards the growth of the network, allowing us to acquire tokens at a fair rate to be used to incentivize future activity on the platform.

Upon release of auxiliary modules and the district creation interface, any ETH remaining in the stability reservoir will be earmarked for funding the development of modules and districts that stand to benefit all network participants. More details regarding the funding process for auxiliary modules and new districts will be provided at a later date.

Ecosystem Support

One of the primary reasons we’ve chosen to build on Ethereum is the potential for interoperability with other projects and the ability to make use of the technology they are developing.

Aragon is a perfect example of a project that is essential to our success, we have a vested interest in seeing them execute on their goals. As the importance of scaling starts to come into the limelight, we are inclined to help fund the development of solutions such as TrueBit and the Raiden Network.

We intend to directly support teams who are adding value to the Ethereum network, participating in funding rounds and helping to provide the capital necessary to move the ecosystem forward.

district0x University

The driving force behind the Ethereum ecosystem has always been its developers. We are fortunate to be in a space filled with so many great minds working towards shared goals. That being said, we can never have enough talented coders powering the network.

The district0x University is a proposed 8-week long virtual crash course for all things Ethereum, seeking to onboard talented developers to a world of blockchains and decentralized applications. Participants will receive a grant to fund their time spent in the program.

Community Incentives

As covered earlier, our Community Advisor Program and district proposal process are two simple initiatives that have already proven to be useful in sparking activity and growing our community. We are committed to making use of similar measures moving forward, continuously seeking ways to reward participation and create a vibrant and thriving network.

Infrastructure Grants

The Ethereum community has high expectation of its service providers, and despite a rapid increase in users, they seemingly always manage to deliver. Projects such as MyEtherWallet and Etherscan are essential to the network, yet rarely receive the credit or support they deserve for all of their hard work each and every day. We think this needs to change.

We intend to donate 2% of all funds earmarked for the district0x Power Plant in the form of infrastructure grants to teams who provide us with the tools we need to effectively utilize the Ethereum network.

A Call for Feedback

With the management of funds post-crowdsale being a hot topic these days, we anticipate this proposal will be met with some critique. In fact we hope it is, so we can work to improve it.

We reiterate, this is a proposal which will be refined over the coming weeks. We welcome you to join us on Slack to share your thoughts on the district0x Power Plant and offer any suggestions you may have to ensure the district0x Network develops into a valuable ecosystem for all.