🏛️Encryptify DAO

Privacy needs decentralization

We strongly believe in decentralization, the power of online communities, and the benefits of DAO governance. In web3 protocols, decentralization is key to becoming resilient, this is especially important for projects within the privacy space.

While there are many advantages to this approach, there are also disadvantages. DAO governance can lead to vulnerabilities, like Sybil attacks, and generally slows down the decision-making process, which is especially hindering in the starting phases of a protocol.

We believe a DAO requires a strong core of early contributors, giving direction and building the foundation of a protocol. However, including community and outside contributors early is equally important as it allows for forming strong, driven, and purposeful communities.

That's why we want this to be an inspirational and aspiring blend of a solid core team and an active contributing community, leading the path to a fully DAO-governed protocol.

The hybrid DAO

For the starting phase of Encryptify, we are implementing a hybrid DAO approach.

A very important aspect for us is to allow community members and token holders to form the organization's direction early on and give them ample opportunities for contribution. We also want to reward these contributions properly.

At the same time, we would like to allow the core contributors to move forward with building the protocol's foundation swiftly, giving them the right amount of control they need over the organization's operations.

Our implementation

OG Community NFTs

While there is no token yet, these NFTs allow early community members to participate actively in forming the organization's direction and get rewarded through benefits and perks. Holders get access to gated content and discussion channels, voting rights, access to dedicated presale rounds, and early access to prototypes or newly developed protocol features. All proceeds from the NFT mints go towards a community treasury, solely dedicated to rewarding community contributions and funding the Community Rewards Program. Read more about the OG Community NFTs

Community Treasury & Community Rewards Program

To reward active community contributions, the Encryptify DAO maintains a community treasury. This treasury is initially funded by all OG NFT mints and royalties on secondary NFT sales. All funds go towards the Community Rewards Program, which pays active community contributors in ETH. Read more about the Community Rewards Program

41% of total supply allocated to the Foundation/DAO

This major part of the token supply allocated to the Foundation/DAO is controlled by DAO governance (Encryptify Token holders). The main use is intended to be for funding ecosystem-related expenses (like protocol or ecosystem incentives) but is ultimately not limited to that.

35% of total supply distributed and sold in presale funding rounds

To give general token holders majority of voting power, 35% of the total supply is sold in presale funding rounds. During these presale rounds, Encryptify favors a wide distribution and avoids selling large amounts of tokens to single individuals or oganizations.

24% of total supply allocated to Core Contributors & Advisors

Core Contributors & Advisors receive 24% of the total supply, giving them reasonable voting power without allowing them to outvote general holders.

Governance procedures during the hybrid DAO phase

To allow the core contributors to build out the foundation of the protocol in a swift manner and avoid road-blocks due to a potentially large inflow of governance proposals and slow approval processes, during the hybrid DAO phase, the following procedures will be implemented:

  • The usage and allocation of the initially unlocked Foundation/DAO token share (14% at TGE) do not require governance approval. However, the core contributors must communicate the usage and allocation of these tokens before TGE. They must be used for their original purpose of ecosystem-related expenses only (like staking rewards, airdrops, rewarding protocols that integrate with Encryptify) and can not be used to fund operational expenses (like development costs, marketing, salaries, infrastructure costs, and other related expenses), with the exception of providing initial liquidity.

  • The usage and allocation of all future Foundation/DAO token share unlocks require governance approval.

  • During the hybrid DAO phase, only core contributors can bring in governance proposals related to using and allocating the Foundation/DAO token share. The core contributors can, of course, not move forward with their proposal without full governance approval.

Last updated