Introducing DORA: All Tokenomics that you should know
In this article, we will introduce Dora Factory network’s native token, Dorayaki (DORA) to you.
As you may know, Dorayaki is the favorite snack of Doraemon. It’s a dessert with red bean filling between two slices of sweet fluffy pancakes.
Dora Factory produces Dorayaki, and Dorayaki is the fuel of all DAO ventures that perform on-chain governance.
Dora Factory is governed by DORA holders. DORA will be the utility token that binds the network together. Users and holders of DORA can stake, mine and pay DORA tokens. Developers who build will be rewarded with DORA tokens.
The initial total supply of DORA is 10,000,000.
Before we get to the distribution details, let’s walk through the utility of DORA token in the network:
Every DAO is created by staking 100 DORA tokens on-chain. When the DAO is terminated, staked DORA tokens will be released. Later, when the number of DAOs grows and the value of DORA changes, a fixed staking price might be necessary when a DAO is created. This can be achieved by implementing a price oracle with an off-chain worker, or simply using an existing oracle service provided by some other parachain.
Validator Staking, Mining and Inflation
Dora Factory will first be a POA network, and transfer into an NPoS network when deployed on Kusama. Validators and nominators maintain the parachain by verifying transactions and producing blocks. As a result of that, validators and nominators are rewarded with tokens from inflation. Besides inflation, transaction fees will be distributed to validators and nominators, network fees (tax) collected from users and DAOs will be paid proportionally across all addresses that staked DORAs.
The inflation is 1,000,000 DORAs per year until a super majority of the community votes otherwise. Therefore, unlike Polkadot itself, this is a linear inflation starting from 10% in the first year. Inflation rate is decreasing every year. Among the tokens generated from inflation every year, 2% will go to a Dora Factory Treasury, the rest of DORAs generated from inflation will be distributed to the nominators and validators.
Network Fees (Tax)
Pallets can charge fees. DAOs will have to “burn” DORA tokens (or pay fees) to use pallets (there can be free pallets!). Network Fees paid by DAOs are taxed by Dora Factory. The tax will be proportionally distributed to all staking addresses.
The network rewards validators, pallet developers and venture builders. Validators are rewarded from inflation as well as tax collected from DAOs. Non-validator DORA stakers are rewarded by network tax. Developers are rewarded by pallet income.
A small transaction fee will be imposed on all transactions on the parachain. The Transaction fees collected will be distributed to nominators and validators.
Unlike Internet SaaS platforms, Dora Factory is governed by the community of DORA holders instead of a company.
There are two governance bodies. The Governance DAO and the Council. The governance DAO is a DAO of all DORA holders. The council is the core development team that is responsible for the project’s roadmap until sudo is removed.
The Governance DAO is a DAO produced by Dora Factory. After Dora Factory’s mainnet launch, the governance DAO will be presented on Dora Factory’s client frontend. All DORA holders are members of the DAO, and all staking addresses can vote on issues (we call them “DORA Voters”). There are several situations where governance comes into play.
Approve Major Parachain Mainnet Upgrade
Any major upgrade of the parachain mainnet (parachain consensus, governance rules, mining & staking rules) needs a ⅔ majority vote from DORA Voters.
Approve Community Grants
There will be ongoing quadratic funding grant rounds to support new ideas to improve the infrastructure and creating new pallets on Dora Factory. Community can donate to projects they deem important with DORA and a matching fund will be distributed to the projects based on the quadratic funding scheme. The community grant will be hosted on HackerLink.
Every community quadratic funding grant needs to be approved by a simple majority vote from DORA Voters.
In addition to the governance DAO, Dora Factory has a Council, which is responsible for implementing the roadmap and executing key operations.
The Council also has power to make minor changes and upgrades to the infrastructure, and add pallets based on the procedure of adding pallets.
Pallets can be developed either by Dora Factory developers or any community developer (group) from any place. Mobilizing the developer community to invent DAO pallets is critical to Dora Factory. On Polkadot, pallets can be developed and tested freely on local substrate nodes. When a pallet is added to the parachain, its security must be ensured.
A pallet (either developed by Dora Factory core dev team, or by community developers) needs to go through a thorough testing and a security audit before it can be submitted to the Dora Factory testnet. The pallet will reside on the testnet for a certain period of time before it can be compiled into Dora Factory’s Polkadot Parachain. This process is facilitated by the council.
The council also controls an open grant which supports new ideas, schemes and algorithms of on-chain governance, essential DAO pallets, important toolkits. In order to make a decision to issue an open grant, a simple majority must be reached among the councillors.
There will be certain features and improvements proposed by users or core developers. An open bounty program will be hosted on HackerLink. Both core DORAs and community projects can issue a bounty. Every bounty is linked to a GitHub issue so that workflows can be managed on GitHub. Many types of cryptos can be used for bounty payments.
Smaller features and improvements that are not within the scope of open grants might be posted as bounties.
Sudo and Election
The councillors will be appointed by Dora Factory Foundation until Sudo is removed. When Sudo is removed, councillors will be elected by DORA Voters. The rules of election will be then hard coded into a governance pallet and be added to the Governance DAO. At that time, Dora Factory will enter DAO governance.
Dora Factory’s native token is DORA. DORA empowers the DAO-as-a-Service infrastructure. There will be two stages of DORA token.
In the first stage, Dora Factory will issue a standard ERC20 token, DORA. The ERC20 DORA token will be used in various Dora Factory products. The total supply of ERC20 DORA token will be fixed.
After the Dora Factory mainnet is launched, ERC20 DORA tokens will be converted to the mainnet native token, and it enters the second stage. In this stage, network staking and network rewards will start, and there will be a linear inflation of 1,000,000 DORA tokens every year, which will be used to reward network validators and community developer grants. (note: this will only happen after mainnet is launched).
The supply and allocation plan for DORA is designed as such:
- Initial total supply: 10,000,000 DORA
- The distribution plan for the tokens is as shown in the tables below.
There will be roughly 18% of DORA liquidated into secondary market after the Token Generation Event.
The above token distribution plan may be subject to changes via community governance in the future.