GameDAO Pinky Paper

Abstract

GameDAO is an experimental crowd-coordination and -fundraising cooperative running on zero.io, a Polkadot / substrate based interoperable relay chain for video games.

GameDAO is an experimental crowd-coordination and -funding cooperative running on zero.io, a Polkadot / substrate based interoperable relay chain for video games.

While the platform as a whole focusses on ease-of-use of finance and governance protocols (e.g. grants or lending), there are more complex scenarios which in turn require a deeper understanding and additional preparation in advance (e.g. equity).

These protocols are operated to create a low barrier, community governed fundraising platform to involve funding contributors in project coordination to increase mutual trust due to shared interests and increased transparency. This allows for early stage marketproof as well as loyalty through ownership. Furthermore this contributes to individual freedom and the development of more sustainable business models of video games.

By utilisation of innovative coordination methods, like quadratic voting and creation of loan protocols featuring alternative collaterals, like NFT, GameDAO will become the protocol directly connecting creators, players, publishers and investors.

Membership

Individuals looking for a GameDAO membership providing contribution and earning opportunity, without the ability to create a campaign, can simply do this by staking $PLAY in the respective pool.

Creators seeking to create and coordinate campaigns through GameDAO gain their membership by:

Individual invitation through a member
Project promotion through community scouting
Acceptance of an application

Becoming a member of GameDAO requires the deposit of $PLAY tokens into the staking pool. The deposited tokens act as a security deposit and result in earning $GAME over time.

Deposited $PLAY can be removed at any point in time. If the deposited $PLAY balance passes the lower collateral limit for $GAME, the holder will lose its membership privileges until the required balance is restored.

Therefore, while $GAME tokens might be traded at secondary facilities, membership requires the currently set equivalent ratio of $PLAY as a collateral deposit to keep the membership alive.

Everybody can become a member, but active seats in GameDAO council are limited to forty-two (42). Seat holders are council members with advanced capability and responsibility, e.g. giving testimony about a successful milestone delivery.

Voting and Coordination

Holding $GAME empowers the holder, depending on the amount, to:

Join ongoing fundraising campaigns
Initiate a campaign for their own interest
Participate in designated governance of projects where they participated as a contributor of funds
Participate in and initiate public motions

In general, GameDAO utilises Quadratic Voting: In Quadratic Voting, each participant is given a number of credits that can be used to vote for a motion. However, the cost of casting more than one vote for a motion is quadratic, not linear. Therefore the marginal cost of each additional vote is far higher than of the previous vote.

If a member does not hold any $GAME token, they can maintain their access to the platform, but will lose all before mentioned powers.

Staking

Users desiring to participate in GameDAO need to stake a minimum of assets. This operation exposes trust into the platform and will be rewarded with $GAME token. The ratio of staked asset to earned $GAME may be determined through a bonding curve.

Collateral

Users aiming to invoke a protocol always need to provide a reasonable collateral. This can be provided as:

Deposit in platform currency (PLAY, DOT, KSM)
Deposit of ERC20 based assets
Deposit of Non Fungible Token

This allows for high value collectables to be utilised as collateral in creation of a lending pool, if a price can be determined.

GameDAO Council can support cases, when a collateral is not sufficient in relation to e.g. a campaign’s aimed fundraising cap, Treasury assets to satisfy the collateral requirements.

Collaterals can be accompanied by respective insurance, reducing the amount provided by a depositor but incurring cost for the delta between the amount provided and amount covered by an insurance party.

$GAME

GAME Token enables its holders to exercise certain functions on the legal body and coordination processes. The supply of tokens will determine their price. A bonding curve will enable price discovery upon invocation of GAME Token.

Identity

Every active participant in GameDAO needs to provide initial identity information to create an ecosystem wide decentralised identity (DID). This allows for platform operation in a legal manner, provides transparency and guarantees for the GameDAO community.

The identity system is bound to ZERO as a network layer, which provides identity and payment flow for all participants.

Identity is cryptographically abstracted away to make it inefficient to reveal private data of a user without its consent.

In certain cases, users are required to reveal their identity to proceed in e.g. monetary transactions (KYC/AML) or audits when participating in certain protocol execution.

Identity comes with additional features for the ecosystems connected to ZERO, namely trust, reputation and experience metrics, which are powered by:

Provision of social identifiers strengthening the Trust (T) level of an identity
Continuous contribution of activity into their experience levels (XP)
Social feedback of other ecosystem participants, contributing to the reputation (REP) of an identity

These all together, T, XP, REP and the opaque identity provide increased trust and protection of the user base, enabling barrier free interaction, in case of GameDAO for coordination and fundraising.

Payment

GameDAO and its network layer ZERO utilise payment ramps to ease the adoption and continuous use of products like GameDAO. To achieve this in the best way possible, research showed that for risk averse participants, taking higher risk in crypto related transactions is a drawback and therefore a hindrance in widespread acceptance of crypto based payments.

ZERO provides a solution to this by establishment of a stabilised payment means, $PLAY, initially collateralised by EUR and in the future by multiple stable payment means, like DAI, or even BTC or ETH, depending on acceptable risk factors.

GameDAO users therefore use ZERO’s platform currency $PLAY to settle all payment needs across the ecosystem. Every $PLAY token in existence is therefore backed by a certain amount of assets to maintain a stable price.

Treasury

GameDAO earns transaction fees, paid in $PLAY, through operation and utilisation of the platform. These fees are collected in the GameDAO treasury. These funds can be utilised based on community proposals and votings to support further development of protocols and fundraising campaigns. Therefore these fees are serving a common purpose, sustainably powering the platform and community initiatives.

Fundraising with GameDAO

Roughly GameDAO splits the process of fundraising into two phases.

Fundraising Phase

The Fundraising Phase consists of few steps:

Setup Account + Identity
Select Fundraising + Coordination Protocol
GameDAO Council Approval
Launch

During Fundraising, creators will promote their campaign and collect supporters with their funding. If a campaign reaches the desired minimum cap, it is considered successful.

Funds provided by contributors are locked until the end of the campaign. Depending on the campaign’s outcome, funds will either be returned to the contributors (unsuccessful) or stored in a campaign escrow, to be processed by the coordination protocol.

Coordination Phase

Reaching the coordination phase means a campaign was successful, which is a remarkable testimony for the creator, as this reflects trust in the capabilities and idea of creator and product by the council and, more important, by the community.

Depending on the protocol ( Grant, Prepaid, Loan, Share ) the raised funds can be released in various ways, giving supporters different types of guarantees and influence opportunities along the process of creating the project.

Campaigns can be created with or without Governance, but at least one of the four baseline protocols, Grant, Prepaid, Loans or Share, will define the way funds are released to the creator.

Without Governance

Grants pay immediately to the creator.
Prepaid campaigns release payments on an automagic time schedule, defined by the creator on invocation of the protocol.
Loans will release immediately to the creator, based on the loans’ terms.
Shares will immediately release, but may imply further regulatory requirements.

Further discussion in the Protocols section below.

With Governance

All participants of a campaign will automatically become part of the coordination DAO to propose and approve votings:

Upon campaign creation, the creator can propose either milestones or deliverables which in turn release funds, when the coordination DAO, consisting of contributors and representatives of the GameDAO council as supervisors, approve.

Any participant of the coordination DAO can create proposals to interact with the campaign creators in a transparent and coordinated fashion.

Campaigns featuring Governance, provide coordinated exit from a campaign during coordination phase, when deliverables or milestone quality do not meet the expectations of the DAO members (“rage quit”), resulting in resolution of the protocol and return of the remaining funds to the contributors, based on their fractional contribution.

This results in measurable quality and guarantees for contributors and better outcomes of funded campaigns.

Further discussion in the Protocols section below.

Protocols

Grant

Grants are coordinated donations by the community, honouring a roughly defined project idea and its creators.

With Governance, successful campaigns store their balance in a treasury, where the release of funds is partially automated or moderated by the coordination DAO members upon request of the creator.

Prepaid

A prepaid campaign is a product being paid for in advance resulting in the right to use the final product, like a game license, provided as a unique token to the supporter.

After successfully delivering defined milestones, the contributors receive their token plus predefined additional perks.

Lending

Lending and Borrowing are one of the DeFi superpowers growing into maturity during the last years. GameDAO will establish a solid framework merging traditional fundraising and borrowing of funds, including the ability to use alternative valuables, like NFT, as collateral assets.

During Fundraising, the creator either directly collects contributors agreeing to the creators terms for a lending pool or taps an existing pool with existing conditions. These conditions consist of factors like collateral ratio, APR and can be collateralised by the creator with IP of his product being created.

Upon completion, funds are transferred immediately into the creators collateral balance. Creator can utilise up to the currently defined (by the pool or in his proposal) percentage of his collateral. Loan cost will be deducted daily until the Loan is paid back in full.

Shares are a future outlook and require additional legal work to make this fly. Besides fulfilment of regulatory requirements, depending on the funding volume, additional requirements may apply.

Please watch out for further discussion on our Medium and public announcement with further details.

Governance

Governance provides additional means of control and influence to its empowered members. To incentivise participation, being an active member results in various perks and rewards:

Voting releases $GAME and increases XP, REP.
Creating motions releases $GAME, increase REP when successful and increase XP, decrease REP when rejected.
Votes can be delegated.
Votes can be acquired at cost of $GAME/$PLAY.

Eligible members may be rewarded with additional token provided by a campaign / project.

Example: A project raised their desired cap and chose to continue with a Prepaid campaign with coordination. The project’s creator wants to withdraw the raised funding in 4 milestones. Upon the first milestone, 25% of eligible voters participate in an approval voting and 55% of the participants vote to agree on delivered product. The desired amount will be transferred to the project creator.

GameDAO Setup

GameDAO aims to set up a cooperative in the European Union as this legal body resembles the idea of a DAO in the best way. This could preferably happen in a country with innovative approaches to setup and operation of such a body, e.g. the Fürstentum Liechtenstein.

Many challenge the idea of why a DAO would need a legal, centralised body. From our understanding, cooperatives and DAO resemble each other. Providing protocols serving a common good will result in legal barriers to overcome — or to live on a blockchain, without any touchpoint to the old world.

This is a major drawback for adoption of this idea, as we aim to evolve from an experiment into an operational entity, on and off chain, bridging two worlds which belong together in a future we want to contribute to.

Fundraising

The GameDAO Team is considering a fundraising campaign to cover setup, development and operational cost of GameDAO until the experiment reaches maturity and can be taken over by the community.

This requires provision of funds by contributors, the same way we offer fundraising and coordination for future users, contributors and creators of GameDAO.

Further Information can be found soon on the GameDAO website.

Final Remarks

Execution of an experiment or idea like GameDAO is always standing on the shoulders of giants and walking on the edge of many intersecting aspects. GameDAO will become a sustainable player by support of the community, not only by funding, but mainly by providing expertise and by applying it.

Support us and let’s create better fundraising and business models together: If you want to contribute or support our efforts, write to us or join our Discord.

Thanks for the great inspiration by initiatives like RadicalXChange, TokenEngineering and all the projects pushing the Polkadot and Kusama ecosystem and an interoperable future!

Glossary

Overview of terms used in the abstract:

Asset-Referenced Token, European Commission, MiCA

Bonding Curve, The token bonding curve is an emerging crypto economic primitive: protocol based incentive systems that enable coordination of network participants to achieve shared goals. Tokens incentivize players in an economic game towards an outcome that are mutually beneficial.

DAI, a stablecoin cryptocurrency which aims to keep its value as close to one United States dollar (USD) as possible through an automated system of smart contracts on the Ethereum blockchain.

DeFi, Decentralised Finance, DeFi platforms allow people to lend or borrow funds from others, speculate on price movements on a range of assets using derivatives, trade cryptocurrencies, insure against risks, and earn interest in savings-like accounts.

Ethereum, The ERC-20 (Ethereum Request for Comments 20) Token Standard allows for fungible tokens on the Ethereum blockchain.

GAME Token, Governance token, farmed for staking PLAY in GameDAO.

NFT, A non-fungible token (NFT) is a unit of data stored on a digital ledger, called a blockchain, that certifies a digital asset to be unique and therefore not interchangeable.

PLAY Token, Stable currency pegged token on Zero Network.

Quadratic Voting, a collective decision-making procedure which involves individuals allocating votes to express the degree of their preferences, rather than just the direction of their preferences. Further Reading on Hackernoon

RadicalxChange, is a global movement for next-generation political economies. It advances plurality, equality, community, and decentralisation through upgrades of democracy, markets, the data economy, the commons, and identity.

Token Engineering, is a cross-disciplinary field that draws from established practices in systems, electrical, robotics & controls engineering, and more.

ZERO Network, Relaychain built with Parity Polkadot / substrate.

Disclaimer

This document is not financial advice and not considered final and subject to change without further notice. If you want to learn more or contribute improvements, please reach out to us.

The GameDAO Pinky Paper