Summary
DIP-3 is proposing to reallocate a percentage of future trading fees from liquidity pools on DODO. The fees collected will be utilized for two purposes: to buy back DODO tokens from the DODO-USDT liquidity pool on DODO and redistribute them to all vDODO holders, and to establish a multi-purpose community treasury.
Motivation
In DODO’s V2 Tokenomics, trading fee reallocation is one of the most critical token models. As DODO’s multichain deployment progresses and the DODO platform’s user base increases rapidly, the platform’s trading volume has been growing exponentially.
While the user base and the total trading volume of the DODO platform continue to increase, it is necessary to tie platform growth together with token value capture. Reallocating a percentage of trading fees to buy back DODO tokens and then redistribute them to vDODO holders, and establish a community treasury are remarkably beneficial to DODO’s token holders and the DODO platform’s growth in the long run.
Specification
There are three types of liquidity pools available on DODO DEX: DODO Classic Pool, DODO Vending Machine, and DODO Private Pool.
Although each liquidity pool’s trading fees on DODO are set and configured by its creator and may vary from one another, the default trading fee for a pair on DODO is 0.3%, with the exception of DODO Classic Pool’s single-sided liquidity pools, which have a default trading fee of 0.01%.
DIP-3 proposes that 80% of future trading fees on DODO will be distributed to liquidity providers (LPs), and 15% will be used for the buyback of DODO tokens (to then be distributed to vDODO holders as vDODO), and the remaining 5% will be used to fund a community treasury.
For example, assuming a liquidity pool has a trading fee of 0.3%. If DIP-3 is to be implemented, 0.24% of the total trading volume in the pool will be distributed to LPs as rewards, and 0.045% of the total trading volume will be used to buy back DODO Tokens (to then be distributed to vDODO holders as vDODO), and 0.015% of the total trading volume will be used to fund the community treasury.
Available Options
Approve: agree with the proposal of trading fees reallocation (80% to LPs, 15% for DODO tokens buyback, and 5% for the community treasury)
Reject: disagree with the proposal. LPs should continue to receive 100% of trading fees accrued from liquidity pools on DODO
This concludes DIP-3. Suggestions and comments from community members are always welcome and encouraged. A governance vote on the proposal with the aforementioned options will be created on Snapshot.
Governance Vote
Link: Snapshot
Voting Period: June 15, 2021 at 1:00PM to June 18, 2021 1:00PM SGT
Voting Method: Users with both DODO tokens and vDODO tokens can vote via Snapshot. 1 DODO represents 1 vote and 1 vDODO represents 100 votes. Casting votes will not incur any gas fee.
Vote for the proposal by clicking on the option that you agree with the most. Feel free to post your thoughts and alternative proposals to DODO’s community forum.
If the total number of votes reaches at least 2 million and “Approve” receives a majority of the votes, the DODO team will implement the proposal.
Note: If you have DODO tokens, make sure that they are in wallets on Ethereum mainnet (wallets on centralized exchanges or Binance Smart Chain will not give you votes).