Author:#

@Jango @Mr. Goldstein

Proposal date:#

2021-12-14

What is the goal of this proposal?#

The goal of this proposal is to strengthen JBX membership. It does this by

• increasing the cost of entering the DAO up front and over time
• distributing JBX to builders within the DAO
• decreasing the automatic distribution to specific reserved token members
• creating more incentive for JBX members who want to leave to do so.

Provide a comprehensive summary of your proposal.#

At its current state the JuiceboxDAO protocol has 3 key levers that could be adjusted to alter the Mechanism: Discount Rate, Reserve Rate, and Bonding Curve.

While all three levers impact the mechanism of the JBX token, every lever has a different impact on the mechanism with various orders of magnitude.

Thus far, the JuiceboxDAO has been focused on building and advancing the Juicebox ecosystem by furthering the distribution of the JBX token and incentivizing new builders. Any and all mechanism changes should be focused on continuing that trajectory.

Even though the Juicebox protocol enables the DAO members to create multiple changes to the mechanism every funding cycle, we suggest rolling such changes gradually and not all at once. We propose adjusting the existing reserve rate from 35% to 50% and distributing 20,000,000 JBX to the discord community through tip.cc.

To better explain the rationale behind the options that were considered, the following will outline the impacts and considerations of potential mechanism adjustments that were considered:

• Discount Rate - the most permanent and aggressive adjustment
  • Potential change - adjust the discount rate to 20% (or more) from its current value of 10%.
  • Impact
    • Immediately and irreversibly changes the JBX issuance per ETH contributed
    • JBX issuance rate per ETH will decrease much faster each funding cycle
    • Over time, this will increase the amount of ETH that must be contributed to the treasury to mint each additional JBX
    • Accrues value to the JBX token vs. the JuiceboxDAO treasury
  • Potential Risks
    • JBX is becoming less accessible at a faster rate, even for contributors to the project
    • Contributors will receive less JBX when they pay fees and contribute ETH to the treasury
    • DAO operating on the Juicebox protocol will accrue fewer JBX to distribute to its builders
    • Might make the network less attractive to future contributors or people who are building projects
  • Conclusion
    • Adjusting the discount rate creates a permanent and irreversible impact on the JBX token and accrues more value to the JBX token vs. the JuiceboxDAO
    • At the current, young, state of the Juicebox protocol long term value accrual to the JuiceboxDAO ecosystem should be prioritized over accruing short term value accrual to the JBX token
• Reserve Rate - temporary adjustment to issuance rate (selected option)
  • Potential change - adjust the Reserve Rate to 50% from its current value of 35%. Allocate 75% of the reserved tokens to the to the DAO (dao.jbx.eth), and 25% split evenly between DAO delegates (currently the 6 on the reserved list: jango.eth, peri.eth, exekias.eth, nnnnicholas.eth, wagmi studios, and canu dao)
  • Impact
    • Immediately reduce distributed JBX issuance per ETH contributed
    • Increase issuance for the DAO itself. Total issuance will remain the same
    • Further empower the DAO with additional treasury contribution thus empowering network support among builders
    • Decrease JBX allocation to jango.eth, peri.eth, exekias.eth, nnnnicholas.eth, wagmi studios, and canu dao
  • Risks
    • Unless distributed to builders, the JuiceboxDAO will accrue tokens that are not used or distributed among members → more "dead" tokens
    • Disincentivizing contribution to the JuiceboxDAO treasury
    • Maintaining the similar JBX inflation rate while reducing the contributor issuance rate can make the JBX token less attractive
  • Conclusion
    • Increasing the reserve rate can both strengthen the Juicebox DAO through treasury growth while creating a positive impact on the JBX:ETH ratio
    • As long as the focus of the JuiceboxDAO is on building and advancing the ecosystem, mechanism changes that cater to that (such as this one) should be prioritized
• Bonding Curve - adjust the bonding curve from 60% to 95%
  • Impact
    • At 60%, the DAO is currently offering 1 ETH back from the treasury for each 679,652 JBX burned. At 95%, this will be 1 ETH for about 459,219 JBX burned.
    • Increases the floor price of JBX and improves correlation to the JBX AMM price
    • Reduce JBX token inflation by incentivizing token holders to burn JBX in return for ETH
  • Risks
    • Reduction in JuiceboxDAO treasury due to increased redemptions
  • Conclusion
    • Increased treasury redemption should be offered when it provides the most value to token holders
    • The JuiceboxDAO is still young and has not sufficiently explored all opportunities to utilize its treasury, thus should continue exploring opportunities to utilize the treasury to advance the protocol ecosystem.
• Additional one time change: Reallocate 20,000,000 JBX from the JuiceboxDAO treasury to distribute throughout the discord using tip.cc.
  • Methodology
    • The funds should initially be split evenly between the current delegates on the reserved list — jango.eth, peripheralist.eth, exekias.eth, nnnnicholas.eth, a rep from wagmi studios, and a rep from canudao.
    • The delegates must distribute the funds entirely to at least 2 people, who are then encouraged to keep some and pass the rest along either upfront or over time in recognition of people's work. The delegates can receive JBX second hand in recognition of their own contributions.
  • Impact
    • Strengthen the membership weight of those in the DAO who have been working on the protocol getting it to where it is.
    • Moves JBX out of the treasury and into the hands of Juicebox ecosystem builders
  • Risks
    • The DAO will have fewer JBX at its disposal. It'll have to wait until more JBX is minted through treasury contributions (or fees) to accrue more
    • People might be temped to hoard JBX or tip only their friends

What changes should be made to the reserved rate?#

35% ⇒ 50%.

• 75.04% to dao.jbx.eth
• 4.16% to jango.eth
• 4.16% to peri.eth
• 4.16% to exekias.eth
• 4.16% to nnnnicholas.eth
• 4.16% to canu dao
• 4.16% to wagmi studios

What changes should be made to the reconfiguration ballot?#

N/A

What is the expected short term impact and longer term impact of enacting the changes being proposed?#

See the "impact" bullets for each change.

What potential tradeoffs should we be monitoring over time if the proposal were to be adopted?#

See the "risks" bullets for each change.

For this proposal to reach its full potential, what other help might be needed from the DAO?#

Everyone in the DAO needs to do their part to try to distribute JBX to people who are stewarding the DAO's efforts.

Sponsors:#

List others from the community who can be spokespeople for this proposal.