# Table of Contents - [Introduction | DeXe Protocol Whitepaper](#introduction-dexe-protocol-whitepaper) - [Positioning | DeXe Protocol Whitepaper](#positioning-dexe-protocol-whitepaper) - [Vision | DeXe Protocol Whitepaper](#vision-dexe-protocol-whitepaper) - [Mission | DeXe Protocol Whitepaper](#mission-dexe-protocol-whitepaper) - [Delegated governance | DeXe Protocol Whitepaper](#delegated-governance-dexe-protocol-whitepaper) - [User Roles | DeXe Protocol Whitepaper](#user-roles-dexe-protocol-whitepaper) - [On-chain voting | DeXe Protocol Whitepaper](#on-chain-voting-dexe-protocol-whitepaper) - [Proposal Circuit | DeXe Protocol Whitepaper](#proposal-circuit-dexe-protocol-whitepaper) - [DeXe Protocol Overview | DeXe Protocol Whitepaper](#dexe-protocol-overview-dexe-protocol-whitepaper) - [Rewards Distribution | DeXe Protocol Whitepaper](#rewards-distribution-dexe-protocol-whitepaper) - [Voting logic | DeXe Protocol Whitepaper](#voting-logic-dexe-protocol-whitepaper) - [Meritocratic Governance | DeXe Protocol Whitepaper](#meritocratic-governance-dexe-protocol-whitepaper) - [Conceptual Objectives | DeXe Protocol Whitepaper](#conceptual-objectives-dexe-protocol-whitepaper) - [Off-chain voting | DeXe Protocol Whitepaper](#off-chain-voting-dexe-protocol-whitepaper) - [Tech architecture | DeXe Protocol Whitepaper](#tech-architecture-dexe-protocol-whitepaper) - [Voting Models | DeXe Protocol Whitepaper](#voting-models-dexe-protocol-whitepaper) - [Conclusion | DeXe Protocol Whitepaper](#conclusion-dexe-protocol-whitepaper) - [DeXe Protocol DAO | DeXe Protocol Whitepaper](#dexe-protocol-dao-dexe-protocol-whitepaper) - [Legal Structure | DeXe Protocol Whitepaper](#legal-structure-dexe-protocol-whitepaper) - [Mathematical Logic | DeXe Protocol Whitepaper](#mathematical-logic-dexe-protocol-whitepaper) - [Token & Treasury | DeXe Protocol Whitepaper](#token-treasury-dexe-protocol-whitepaper) - [Validator's voting | DeXe Protocol Whitepaper](#validator-s-voting-dexe-protocol-whitepaper) --- # Introduction | DeXe Protocol Whitepaper ![](https://whitepaper.dexe.network/~gitbook/image?url=https%3A%2F%2F3671592714-files.gitbook.io%2F%7E%2Ffiles%2Fv0%2Fb%2Fgitbook-x-prod.appspot.com%2Fo%2Fspaces%252Fy3BU6XjkMvE5ZpghiFRu%252Fuploads%252FRmWsEfPoWqdoIArwTXxr%252FDALL%25C2%25B7E%25202023-11-08%252012.06.17%2520-%2520A%2520spacious%252C%2520ancient%2520cave%2520illuminated%2520by%2520soft%252C%2520natural%2520light%2520filtering%2520through%2520the%2520entrance.%2520The%2520cave%27s%2520walls%2520are%2520adorned%2520with%2520philosophical%2520symbols%252C%2520s.png%3Falt%3Dmedia%26token%3D33d1147d-3e7a-4c2d-b187-486b6103a9a2&width=768&dpr=3&quality=100&sign=bddfa409&sv=2) The dawn of decentralized autonomous organizations (individually ”DAOs”) brings to mind Plato's Cave. Early concepts were just like those elusive shadows flickering on the Сave’s walls — lacking depth and barely capturing the rich potential of decentralized governance. Meanwhile, the very communities behind these DAOs remind us of the Cave's inhabitants. Locked into seeing only the shaded outlines, they often miss the profound depth behind the ideas, mistakenly thinking that what they see is the entire concept. Therefore, the initial DAO models faced a range of conceptual and technical vulnerabilities, sometimes leading to system failures and exploitation. The early attempts to build DAOs (e.g. The DAO) undoubtedly were a vital experience for future developments, even if they didn't quite hit the mark. Like any great endeavour, the challenges faced and lessons learned pave the way for innovation and success. However, the impulse for decentralization and its potential to change the world has driven technological advances, shaped minds, transformed markets and, finally, the world. This momentum gave rise to a new phase in the evolution of DAOs, introducing many tools to integrate DAO principles into organizational structures. Yet, existing solutions still haven't delivered the ergonomic means to establish a fully decentralized and autonomous organization. Among critical challenges in the market for existing DAO tools and the organizations themselves, we can identify the following: 1. **Lack of Decentralized Treasury Management Tools:** Even when creating a DAO, you still need a multi-sig wallet with a certain number of signatories, which distorts the very idea of decentralization and concentrates power in the hands of the founders. 2. **Plutocracy:** Despite the decentralized nature of DAOs, significant decisions in most organizations still follow the will of large stakeholders — founders, their teams, and investors. Many organizations rely solely on ownership-based governance models, centralizing power around the narrow circle of interested parties, which fundamentally misrepresents the essence of DAOs and creates manipulation risks. For DAOs to genuinely embody decentralization, we must establish mechanisms encouraging participation and influence from a broader spectrum of competitive contributors. By doing so, we can ensure that decisions are made collectively and are not highly influenced by a narrow circle of key stakeholders. 3. **Incentive Imbalance:** In current structures, DAO members must not only spend time studying proposals and making decisions but also cover commission costs. At the same time, the benefits of the organization's activities can be accessed by all members regardless of their involvement and the outcomes of their efforts. Such a model devalues initiative and demotivates individuals. 4. **Low Activity:** As a result, most organization members remain insufficiently motivated and engaged. Initiative and contribution go unrewarded, and a quorum for decision-making is only achieved with the participation of a narrow circle of interested parties. 5. **Lack of Infrastructure:** Although there are many solutions in the market, we still lack a comprehensive infrastructure that contains mechanisms for constructing complex organizational structures, discussions, on-chain and off-chain voting, incentivization mechanisms, decentralized treasury management tools, the ability to integrate proprietary contracts, and autonomously execute DAO decisions, and so on. Given the abovementioned challenges, most existing DAOs are better described as decentralized autonomous organizations with centralized governance (DAOCG). Current tools hardly allow for the creation of a genuine DAO. Many organizations continue to resemble those faded shadows on the wall of Plato's Cave, living in a distorted illusion of what they perceive to be a DAO. Otherwise, projects and organizations that recognized this fundamental flaw had no choice but to build their own DAO infrastructure and allocate substantial resources to maintain it. [NextMissionchevron-right](https://whitepaper.dexe.network/introduction/mission) Last updated 2 years ago --- # Positioning | DeXe Protocol Whitepaper ![](https://whitepaper.dexe.network/~gitbook/image?url=https%3A%2F%2F3671592714-files.gitbook.io%2F%7E%2Ffiles%2Fv0%2Fb%2Fgitbook-x-prod.appspot.com%2Fo%2Fspaces%252Fy3BU6XjkMvE5ZpghiFRu%252Fuploads%252FJ9cgdNA1lYaX7OJqasrZ%252FDALL%25C2%25B7E%25202023-11-07%252018.23.40%2520-%2520Inside%2520an%2520airy%2520and%2520luminous%2520ancient%2520Greek%2520cave%252C%2520a%2520group%2520of%2520philosophers%252C%2520clad%2520in%2520white%2520robes%252C%2520are%2520gathered%2520in%2520a%2520circle%252C%2520engaged%2520in%2520a%2520deep%2520discussion.%2520.png%3Falt%3Dmedia%26token%3D53c46449-6331-47cb-a13f-c7a6d3111433&width=768&dpr=3&quality=100&sign=6b58bb4e&sv=2) Just as those in Plato's Cave discovered a world beyond shadows, we at DeXe Protocol DAO want to pull DAOs into a brighter, balanced, and genuinely decentralized future. Transparency, Community, and Motivation — those are the pillars of DeXe Protocol DAO and of our approach to DAO building/governance: **Transparency** is like the most flawless logic; it allows one to see the matter's essence and offers new perspectives. **Community** is like a dialogue where every voice is important, and every opinion contributes valuable input. **Motivation** comes from the recognition of the value contributed. Proper knowledge and expertise must be recognized and rewarded for a DAO to grow and succeed. Those who recognize such expertise must also be rewarded for doing so. Thus, everyone is motivated to actively and usefully contribute to the DAO. [PreviousVisionchevron-left](https://whitepaper.dexe.network/introduction/vision) [NextDeXe Protocol Overviewchevron-right](https://whitepaper.dexe.network/dexe-protocol-overview) Last updated 2 years ago --- # Vision | DeXe Protocol Whitepaper Drawing from the timeless wisdom of Plato's Cave, the Protocol strives to redefine what DAOs can be, pushing them beyond the superficial and into the essence of decentralized governance. Here's the future we're passionately building towards: **Genuine Decentralization:** Today's DAOs often lean towards centralized controls, especially when managing treasuries. The DAO of the Protocol entirely redesigned this approach. We're paving a path where the DAO manages its treasury, driven by innovative automation and transparent proposal execution mechanics. We're stepping away from the few people holding multi-sig authority. **Meritocracy vs Plutocracy:** In our vision, the number of tokens doesn't fully dictate power. Instead, we've crafted a system where increased holdings have diminishing returns on voting power, ensuring no single entity can dominate. Furthermore, we amplify the voices of validated experts (who can be delegated with votes from the community and treasury) but keep them in check with duty. At the DAO of the Protocol (”DeXe Protocol DAO”), it's not just about wealth; it's about merit and value, ensuring that competence trumps power, enabling a system where genuine contribution and expertise rule over plutocracy. The Protocol continuously develops infrastructure for building more efficient and functional governance models and provides other DAOs with a flexible environment for setting up their governance models following their needs. **Incentivization Models:** Every member of a DAO should feel that their time and efforts matter. That's why we envision a setup where every contribution counts and active participation brings fruits. However, it creates another layer of conceptual measures to ensure that DAOs aren't exploited. **Seamless Infrastructure:** Our vision goes beyond mere tools. DeXe Protocol DAO meticulously crafted a library of smart contracts founded on years of research, market analysis, and a deep understanding of our and others' needs, brought to life after countless development hours. The Protocol ensures that DAOs have everything they need to function efficiently and innovatively. [PreviousMissionchevron-left](https://whitepaper.dexe.network/introduction/mission) [NextPositioningchevron-right](https://whitepaper.dexe.network/introduction/positioning) Last updated 2 years ago --- # Mission | DeXe Protocol Whitepaper ![](https://whitepaper.dexe.network/~gitbook/image?url=https%3A%2F%2F3671592714-files.gitbook.io%2F%7E%2Ffiles%2Fv0%2Fb%2Fgitbook-x-prod.appspot.com%2Fo%2Fspaces%252Fy3BU6XjkMvE5ZpghiFRu%252Fuploads%252FESDJDFBhU0ajtDY02yYY%252FDALL%25C2%25B7E%25202023-11-07%252018.23.03%2520-%2520Visualize%2520a%2520scene%2520inspired%2520by%2520Plato%27s%2520Cave%2520allegory%252C%2520blending%2520antique%2520and%2520futuristic%2520elements.%2520In%2520the%2520foreground%252C%2520a%2520group%2520of%2520diverse%2520individuals%252C%2520men%2520.png%3Falt%3Dmedia%26token%3Db1b3b914-9e6d-43d8-862f-753870320ce5&width=768&dpr=3&quality=100&sign=fdc83520&sv=2) Much like the enlightened philosophers in Plato's Cave, the Protocol aims to step beyond mere shadows and bring DAOs into the full light of day. We've seen the limitations and weaknesses in early DAO structures and are here to offer a transformative solution. Our mission is to provide infrastructure that truly fulfils the power of decentralized governance. We don't just want to emulate the old models; we aim to improve, refine, and revolutionize them. In doing so, we're challenging the old guards of centralized control and plutocracy. At DeXe Protocol (the ”Protocol”), we're set on creating equitable governance where every voice matters, collaboration is key, and governance is genuinely decentralized. We're not just building a tool but paving a new way forward for DAOs, ensuring that the future is inclusive, efficient, sustainable and transparent. Let's move past the shadows and bring DAOs and collaborative communities into the light. [PreviousIntroductionchevron-left](https://whitepaper.dexe.network/) [NextVisionchevron-right](https://whitepaper.dexe.network/introduction/vision) Last updated 2 years ago --- # Delegated governance | DeXe Protocol Whitepaper Members can delegate governance tokens to any member of their DAO. It lets them transfer decision-making power to other DAO members or experts, allowing them to withdraw their tokens anytime. When delegating, tokens are locked in a smart contract, and only their owner can revoke them. For delegated tokens, the voting power is recalculated according to the formulas of those to whom they are delegated. For instance, if a nonlinear function is used, ordinary DAO members and experts may have different calculations for voting power. In this case, DAO members can delegate their tokens to experts with higher voting power coefficients to use them more effectively. At the same time, users can withdraw their tokens at any moment, even during active voting in which the delegated tokens are participating. The voting results will be automatically recalculated. However, withdrawing tokens during active voting can increase gas fees since the results must be recalculated. The delegation system allows you to save time and gas costs by transferring your voting power to a trusted DAO member or expert. The DAO can also delegate tokens from its Treasury, which allows more tokens to be used in actual governance and attracts authoritative and competent parties to the organization. This feature is essential in the design of next-generation DAOs, as it can significantly increase the base quorums for decision-making. Currently, most DAOs use low quorums that a group of large stakeholders, such as the team or investors, easily achieves. At the same time, a significant portion of tokens remains inactive in the Treasury. It undermines the original essence of DAOs as decentralized organizations and demotivates ordinary DAO members, as they feel they need direct support from major stakeholders to influence voting outcomes. Thanks to the DeXe Protocol's transparent delegation tool, DAOs can distribute some of the Treasury tokens among competent experts, advisors, or other friendly DAOs. It can increase quorums from the current nominal 5% to a fair 50+%. With such quorums, the organization's activity can become truly decentralized, unbiased, and transparent. In combination with precise incentive mechanisms, such structures can achieve much greater efficiency in their operations. [PreviousUser Roleschevron-left](https://whitepaper.dexe.network/dexe-protocol-overview/user-roles) [NextVoting logicchevron-right](https://whitepaper.dexe.network/voting-logic) Last updated 2 years ago --- # User Roles | DeXe Protocol Whitepaper ### [hashtag](https://whitepaper.dexe.network/dexe-protocol-overview/user-roles#member) Member Anyone holding governance tokens of a DAO is a DAO member. Members are involved in voting, discussions, and proposal creation; they can also delegate their tokens to other members or experts. The minimum number of tokens or votes needed to create proposals or participate in voting is determined by each DAO individually. ### [hashtag](https://whitepaper.dexe.network/dexe-protocol-overview/user-roles#validator) Validator Security is one of the major problems in current DAOs, with an entire industry of bad actors trying to overtake the DAO and steal its treasury via malicious proposals. That's why those DAOs who want an additional layer of security can add a group of Validators on top of the regular voting mechanism. Validators have a separate vote on a proposal after it passes the general voting. Both Validators and the DAO can autonomously appoint additional or remove existing ones. However, when the DAO votes to exclude one, several, or all Validators, the second round of Validator voting is not applied. Therefore, Validators can monitor the organization's activities and block malicious initiatives. However, the DAO's decision can always terminate their authority. They have their own governance token and can also have their internal proposals and voting. Validator powers are limited to the parameters previously approved by proposals and voting of the overall DAO. Validators can also cover the basic needs of the DAO by processing operational expenses, like servers, domains, or other fees. To do this, the organization can set a monthly limit on available funds that Validators can withdraw from the treasury without requiring additional approval from the DAO. This activity remains transparent thanks to the blockchain and avoids unnecessary bureaucratic obstacles, allowing operational processes to continue smoothly. ### [hashtag](https://whitepaper.dexe.network/dexe-protocol-overview/user-roles#experts) Experts An Expert is a person or DAO trusted by the community of another DAO who is granted this status through a proposal and voting process. After a successful vote, such an entity receives a non-transferable NFT that verifies its status on-chain. There are two types of experts: A **Local Expert** is appointed within a specific DAO, and their authority is limited to that DAO. These experts can be delegated tokens from the treasury of the respective DAO. A **Global Expert** is appointed through a particular proposal in the DeXe Protocol DAO. This type of expert can be delegated tokens from any DAO within the Protocol, as the governing DAO of the DeXe Protocol recognizes their expertise and status. However, the DeXe Protocol DAO can also appoint Local Experts within its structure. An Expert's status and the delegated tokens can be revoked. DAO members create corresponding proposals for revoking delegated from the treasury tokens or removing an expert. In such proposals, the expert can't vote with tokens delegated by the DAO. However, they can still vote with their own tokens or those delegated from the private balances of DAO members. [PreviousDeXe Protocol Overviewchevron-left](https://whitepaper.dexe.network/dexe-protocol-overview) [NextDelegated governancechevron-right](https://whitepaper.dexe.network/dexe-protocol-overview/delegated-governance) Last updated 2 years ago * [Member](https://whitepaper.dexe.network/dexe-protocol-overview/user-roles#member) * [Validator](https://whitepaper.dexe.network/dexe-protocol-overview/user-roles#validator) * [Experts](https://whitepaper.dexe.network/dexe-protocol-overview/user-roles#experts) --- # On-chain voting | DeXe Protocol Whitepaper On-chain proposals refer to a voting mechanism where the results are recorded on the blockchain and trigger the execution of a transaction performing the function specified by the type of proposal. This could involve various actions such as assigning roles within the DAO, transferring funds from the treasury, executing custom contracts, etc. This ensures that decisions made through voting are executed transparently and securely, following the predetermined rules of the DAO. In on-chain voting, users always have the option to vote either "for" or "against" a given proposal. To acknowledge a proposal, the total "for" or "against" votes must meet a predetermined quorum. Once the quorum is reached, the majority of votes either "for" or "against" decides if the proposal is accepted or rejected. The required % of DAO’s governance token total supply needed for a quorum can vary for different types of proposals. Some proposals may have parameters that allow for early completion; if the voting reaches the required quorum either "for" or "against", the voting process can be closed prematurely. Users only see the voting results once the proposal has been completed, reducing the chance for speculative voting or herd behaviour motivated by rewards and statistics. [PreviousVoting logicchevron-left](https://whitepaper.dexe.network/voting-logic) [NextOff-chain votingchevron-right](https://whitepaper.dexe.network/voting-logic/off-chain-voting) Last updated 2 years ago --- # Proposal Circuit | DeXe Protocol Whitepaper Everything has to pass through the Proposal Circuit, which generally works as follows (while the details are subject to change): **1) Initiation Stage** Any DAO member may submit a proposal if he or she has enough governance tokens in his wallet for that proposal type. The proposal must include: ● Short title; ● Сoncise description of the proposal; ● Other specific parameters to each proposal type. **2) Discussion & Voting Stage** After the proposal is published, DAO members may vote on it. Members must vote on a proposal before accessing the current voting results to prevent preference in decision-making. For a vote to be considered successful, both of the following must be met: ● A minimum quorum must be reached based on your pre-determined settings; ● A majority of the votes must be "(Yes) I am in favor of this proposal." **3) Validator voting (optional)** Your DAO may require a second round of voting where only the current Validators vote. **4) Execution** Once the main voting phase and Validator voting are finished and meet the conditions for approval as outlined above, it can be executed via the relevant executor contract. In order to initiate execution, one of the DAO members should find an accepted proposal and execute it. This requires a transaction, though DAO can set a small reward for executing proposals to cover transaction fees. **5) Rewards Distribution** If the DAO settings include rewards for voting and creating proposals, these rewards are distributed after execution and must be claimed. **Off-chain Actions** Some proposals cannot be implemented exclusively through the transaction and may require off-chain actions. These may include involving third-party experts, e.g. conducting audits, involving lawyers, developers, etc. [PreviousVoting Modelschevron-left](https://whitepaper.dexe.network/voting-logic/voting-models) [NextRewards Distributionchevron-right](https://whitepaper.dexe.network/rewards-distribution) Last updated 2 years ago --- # DeXe Protocol Overview | DeXe Protocol Whitepaper The DeXe Protocol (”the Protocol”) is an innovative open-source DAO constructor featuring a library of over 50 contracts continually developed and enhanced through the collaborative efforts of the community and contributors. The DeXe Protocol DAO governs the Protocol with the target of creating and advancing cutting-edge solutions for developing functional, transparent, and decentralized DAOs and constructing efficient mechanisms for decentralized governance. The library includes comprehensive governance contracts, multiple voting models, reward distribution, decentralized treasury management, token delegation, various proposals templates, execution contracts, parameter settings, the ability to integrate custom proposals and custom voting systems, and much more. Naturally, these smart contracts integrate like the building blocks of a very advanced constructor. Every single smart contract of the DeXe Protocol is open source. Thus, independent teams and developers can take any part of the Protocol and implement it in their own way, making the use cases limitless. Here are some basic examples of what can be done with the DeXe Protocol: * Creating a DAO with very flexible settings, specifying different rules for different types of proposals and other governance activity * Using advanced governance logic (govern via fungible tokens, NFTs, SBTs, or a combination thereof) * Creating an audited governance utility token on the spot * Appointing Validators as a secondary security measure and assigning them to specific proposal types for a more nimble governance approach * Finding/approving experts as delegates for truly meritocratic governance while also assigning specific voting and reward weights based on meritocratic and anti-plutocratic criteria * Submitting an on-chain or off-chain proposal and organizing the discussion process to be more manageable and conducive to effective governance. * Voting on and executing a proposal on-chain without multi-sig wallets (every DAO built on the Protocol has its treasury smart contract) * Initial Treasury Allocation. It means exchanging governance power for contributions to a treasury. It allows DAOs to gain support for their ideas while angels receive governance power and ensure they are not contributing to a founder but a treasury * Building multilayer fractal governance models, where DAOs can contain DAOs (as an expert or a working group). Any member of a sub-DAO can make a proposal to the mother DAO, which is automatically created once his sub-DAO approves it And more. At every cycle stage, the smart contracts allow DAO members to submit a proposal to change the settings. Again, the specific implementations may vary based on how the Protocol is integrated into various 3rd party products — that is up to the community of developers who want to use the Protocol's library to build their products on top of the DeXe Protocol. The big goal of the Protocol is to give developers and DAO creators the building blocks to build to the full extent of their dreams and goals. [PreviousPositioningchevron-left](https://whitepaper.dexe.network/introduction/positioning) [NextUser Roleschevron-right](https://whitepaper.dexe.network/dexe-protocol-overview/user-roles) Last updated 2 years ago --- # Rewards Distribution | DeXe Protocol Whitepaper Rewards for substantial contribution to the organization's activities are a fundamental tool that incentivizes DAO members, encourages quality contributions, and compensates for the time and gas fees incurred. When creating a DAO using the Protocol, you can easily set up rewards for your community: **Voting Rewards** This type of reward is distributed for participating in a proposal vote that the DAO has accepted. In this case, everyone who voted "For" will receive rewards proportional to their voting power. You can configure the percentage of the voting power that will be rewarded when creating the DAO or change it later with a DAO decision (for which there is a standard proposal template in the Protocol). **Proposal Creation Rewards** This crucial type of reward is given for creating a proposal that the DAO later accepts. Such rewards encourage members to take the initiative. However, proposals that are useless or not accepted are not rewarded, ensuring that DAO members need to prove value to earn the reward and that the DAO does not waste funds. When creating a DAO, you set a fixed number of token rewards for creating a proposal. **Transaction Execution Rewards** This reward is meant to offset the costs for those executing transactions after a proposal is accepted. If there is a validation round of voting, the proposal is executed twice: 1) initiating a second round of voting and 2) executing the transaction at the end of the validation round. Transaction execution is also required for transferring off-chain proposals on-chain. You also set a specific number of token rewards for transaction execution. Experts receive a 20% commission from the rewards for tokens delegated from ordinary DAO members, who, in turn, receive 80% of the rewards from the tokens they delegate. For tokens delegated from the treasury, experts receive 1.618% of the rewards. The remaining 98.382% are returned to the treasury. After a proposal is accepted and executed, every DAO member participating in the voting can claim their rewards. If a user's tokens were delegated to an expert, they will receive rewards after the expert claims them or can claim the rewards instead of the expert. Rewards can be distributed either in the governance token or in any other token available in the DAO's treasury. On top of that, 30% of the fees are directed to DeXe Protocol DAO’s treasury (the “Treasury”) to contribute to the further development of the Protocol and decentralized governance technologies. [PreviousProposal Circuitchevron-left](https://whitepaper.dexe.network/proposal-circuit) [NextMeritocratic Governancechevron-right](https://whitepaper.dexe.network/meritocratic-governance) Last updated 2 years ago --- # Voting logic | DeXe Protocol Whitepaper Several configurable parameters for voting are set for different types of proposals: **Quorum** – the minimum amount of voting power ("Yes" – in favour; or "No" – opposed) to accept or decline a proposal (respectively). **Duration of voting** - the period during which the main voting phase occurs. **Execution delay** - the time interval after the end of the main voting phase during which the proposal cannot be executed. In the case of proposals with consequences that some organization members may disagree with, this gives them time to exit the organization. **Early voting completion** - a parameter that determines whether the main voting phase can be prematurely concluded if the quorum "for" or "against" is reached early. When creating a DAO, the following are configured: 1. **General voting settings** are applied by default to all types of proposals. 2. **Changing voting settings** rules for modifying parameters needed to change the general voting settings. After creating a DAO, flexible parameters can be configured for different types of proposals using proposal changes to regulate the difficulty of decision-making depending on the potential consequences of each type of proposal. Separate voting rules can be configured for individual executor contracts, each of which can handle multiple types of proposals with similar execution mechanics. Additionally, when creating a DAO, minimum governance token balances are configured to create a proposal and participate in voting. [PreviousDelegated governancechevron-left](https://whitepaper.dexe.network/dexe-protocol-overview/delegated-governance) [NextOn-chain votingchevron-right](https://whitepaper.dexe.network/voting-logic/on-chain-voting) Last updated 2 years ago --- # Meritocratic Governance | DeXe Protocol Whitepaper [hashtag](https://whitepaper.dexe.network/meritocratic-governance#challenges-of-existing-voting-models) Challenges of Existing Voting Models ------------------------------------------------------------------------------------------------------------------------------------------------- Upon meticulous examination of various voting systems, DeXe Protocol DAO has identified significant weaknesses in the current methodologies. The **linear voting model**, which parallels the standard direct democratic system, fails to recognize the expertise or knowledge levels of the participants. In this model, each vote is equal, regardless of the voter's competence and trust. It's a scenario where the vote of a random person holds the same weight as that of a Nobel laureate, provided they have an equal number of tokens. Moreover, linear voting does not safeguard against the risk of plutocracy, where power becomes concentrated in the hands of a few individuals with substantial resources. **Square root voting**, offered as a potential remedy by notable figures, including Vitalik Buterin, has its own traps. In particular, using the square root function in quadratic voting can be manipulated. With this function, when _√x > x_ (for values between 0 and 1), where _x — is token balance_, and _y — is voting power_, it allows for synergistic manipulation. Participants could split their large token holdings into numerous smaller wallets, exploiting this function to amplify their influence without incurring extra costs. ![](https://whitepaper.dexe.network/~gitbook/image?url=https%3A%2F%2F3671592714-files.gitbook.io%2F%7E%2Ffiles%2Fv0%2Fb%2Fgitbook-x-prod.appspot.com%2Fo%2Fspaces%252Fy3BU6XjkMvE5ZpghiFRu%252Fuploads%252FiZcXhLjd8Sb0YVL8A4qa%252FFrame%25201171275840.png%3Falt%3Dmedia%26token%3Ddc75c912-3038-4291-b683-08deeb0b359a&width=768&dpr=3&quality=100&sign=8ba91e5d&sv=2) Therefore, both of these approaches exhibit significant limitations, inadequately addressing the expertise of participants, the risks of power concentration and manipulations. DeXe Protocol DAO is pursuing a more balanced and resilient system that diminishes these shortcomings and paves the way for broad parties engagement on equitable terms. [hashtag](https://whitepaper.dexe.network/meritocratic-governance#undefined) -------------------------------------------------------------------------------- [PreviousRewards Distributionchevron-left](https://whitepaper.dexe.network/rewards-distribution) [NextConceptual Objectiveschevron-right](https://whitepaper.dexe.network/meritocratic-governance/conceptual-objectives) Last updated 2 years ago * [Challenges of Existing Voting Models](https://whitepaper.dexe.network/meritocratic-governance#challenges-of-existing-voting-models) * [](https://whitepaper.dexe.network/meritocratic-governance#undefined) --- # Conceptual Objectives | DeXe Protocol Whitepaper Recognizing the strengths and weaknesses of existing models, DeXe Protocol DAO has intentionally chosen a path of piecewise linear and nonlinear functions and has established the following criteria for the mathematical model of vote tallying and reward distribution. **Combatting Plutocracy and Monopoly** The more tokens that are concentrated in one's hands, the less effective the voting power calculation should be – this helps prevent the accumulation of too much influence by any single party. As the number of tokens in a balance increases, the function for calculating voting power will deliberately slow down its growth. **Meritocracy** The chosen mathematical model must account for the presence of experts and specialists whose determination is regulated by the DAO itself and whose voting efficiency is greater than that of an average token holder. Moreover, the distribution of voting efficiency among different experts can also vary. **Preventing Sybil Attacks and Manipulations** Nonlinear functions must prevent exploitation in areas where they exceed the value of the linear function y = x (where y — is voting power, and x — is token balance). Users should not be able to distribute their token balances across multiple wallets and exploit the vote/reward counting function in areas with the most efficient growth. **Proportionality of Vote Strength to Rewards** If the model includes rewards, they should be distributed proportionally to the voting power according to the respective nonlinear functions. Firstly, this incentivizes the delegation of tokens to experts for whom the voting power calculation functions are more favourable than for regular holders. Furthermore, it discourages delegating all tokens to a single expert, as the more tokens an expert holds, the fewer rewards will be paid out for each token. [PreviousMeritocratic Governancechevron-left](https://whitepaper.dexe.network/meritocratic-governance) [NextMathematical Logicchevron-right](https://whitepaper.dexe.network/meritocratic-governance/mathematical-logic) Last updated 2 years ago --- # Off-chain voting | DeXe Protocol Whitepaper Off-chain proposals are a feature where the results don’t trigger any actions on the blockchain but are instead recorded in the backend. These proposals are essential for validating ideas or bringing up topics for discussion. They don’t require Validators' voting and execution and are particularly useful for preliminary consensus building. Once an off-chain proposal is accepted, it can be converted to an on-chain proposal if its nature aligns with one of the available on-chain proposal types, allowing for the execution of tangible actions on the blockchain-based on community consensus. For off-chain proposals, there are three types of voting available: 1. **For/Against Voting:** Similar to on-chain voting, this type allows users to determine whether they support the initiative or not. 2. **Single-Choice Option:** This voting method permits users to select one option from several, making it ideal for decisions where a single choice needs to be made among alternatives. 3. **Multiple-Choice Option:** In this voting style, users can choose multiple options simultaneously. It proves beneficial when prioritising or selecting multiple options from various choices. [PreviousOn-chain votingchevron-left](https://whitepaper.dexe.network/voting-logic/on-chain-voting) [NextValidator's votingchevron-right](https://whitepaper.dexe.network/voting-logic/validators-voting) Last updated 2 years ago --- # Tech architecture | DeXe Protocol Whitepaper ![](https://whitepaper.dexe.network/~gitbook/image?url=https%3A%2F%2F3671592714-files.gitbook.io%2F%7E%2Ffiles%2Fv0%2Fb%2Fgitbook-x-prod.appspot.com%2Fo%2Fspaces%252Fy3BU6XjkMvE5ZpghiFRu%252Fuploads%252F7kFfEu9WVq2j2XakYFEe%252F1%25201.jpg%3Falt%3Dmedia%26token%3Dc4d6a47b-75ce-448a-a21d-5f8c96c4cf17&width=768&dpr=3&quality=100&sign=d3b4eb7f&sv=2) Smart contracts are at the core of the Protocol. The main idea is to make it as straightforward and automated as possible to execute different functions within the DAO. Smart contracts implement the logic for making and executing a collective decision. **DAOs can be governed via:** * **ERC20** token * **ERC721** token (NFT) * both **ERC20** & **ERC721** ### [hashtag](https://whitepaper.dexe.network/tech-architecture#functional-overview) Functional Overview Pool tokens determine membership in the DAO community, granting users the right to vote and participate in the collective decision-making process. Additionally, token holders can propose ideas that can be approved or rejected by the rest of the DAO members (i.e. governance). The scheme below shows a high-level overview of the various smart contract blocks comprising our infrastructure. ### [hashtag](https://whitepaper.dexe.network/tech-architecture#dlsl) **DLSL** This is the meta-level, with a record of all contracts and DAOs and a way to create DAOs via the Protocol. **ContractsRegistry** - a registry of all the smart contracts used by all the DAOs built via the Protocol. **PoolFactory** - this is where new DAOs get created. **PoolRegistry** - a registry of all the DAOs created via the Protocol. ### [hashtag](https://whitepaper.dexe.network/tech-architecture#dao) **DAO** Once the DAO is created via the PoolFactory smart contract, it gets deployed into the DAO block of our smart contracts. **DAOPool** - the central governing smart contract of each DAO. **DAOToken** - the creation and registry of the token the DAO decided to apply/create for its governance. **UserKeeper** - a registry of the DAOs user wallets. **Settings** - contains all the current settings of the DAO (changeable via proposal). **Validators** - a registry of this DAO's validators. **ValidatorsToken** - validators get their own token for validator-only voting. **DAO Modules** - within the DAO, there are six main processes divided into six smart contracts: * _Voting_ - contracts governing voting in its various aspects. * _Experts_ - contains the rules and mechanisms for the all-important meritocratic component of our DAO governance model. * _Commissions_ - incentives only work when everybody is fairly compensated, and there is good circulation of funds; this is the smart contract with fee rules. * _Staking_ - the smart contract that keeps track of staking programs and rewards. * _Delegation_ - this smart contract keeps track of the complex delegation formulas that make effective governance possible and rewarding. * _Rewards_ - the smart contract specifically focused on tracking and properly distributing rewards. ### [hashtag](https://whitepaper.dexe.network/tech-architecture#proposals) **Proposals** When the DAOPool smart contract executes the voting function, the internal logic turns to the Proposals block. The Settings smart contract is also involved via its voting settings component. **DistributionProposal** - most funds distribution types (from salary compensation to partnership investments) go through this smart contract. **TokensaleProposal** - token sales have complex mechanics and require a separate smart contract to govern them. **CustomProposal** - DAO members are free to define new types of proposals, and this smart contract helps them do that. ### [hashtag](https://whitepaper.dexe.network/tech-architecture#external-tokens) **External Tokens** DAOs can be governed via tokens, NFTs, or both. The following block of smart contracts is dedicated to them. **ERC721Multiplier** - here, the general voting power multiplier for governance NFTs (as ERC-721 tokens) is defined and recorded. **ERC721Power** - depending on the NFT holder's status and actions within the DAO, the actual voting power of their governance NFT can vary, as defined and recorded in this smart contract. **ERC721Experts** - this governs the special voting power of expert sub-DAOs when applicable. ### [hashtag](https://whitepaper.dexe.network/tech-architecture#security) **Security** The Protocol has been audited by renowned security companies, including Cyfrin, CertiK, Ambisafe, Hacken, and numerous auditions by developers related to Protocol’s development. The reports from these audits are available for review. The Protocol contracts repository has undergone over 1000 units, integration, and simulation tests, achieving 100% coverage. The smart contract code for the Protocol is open-source, and we welcome members of the technical community to review and verify our code. [PreviousMathematical Logicchevron-left](https://whitepaper.dexe.network/meritocratic-governance/mathematical-logic) [NextDeXe Protocol DAOchevron-right](https://whitepaper.dexe.network/dexe-protocol-dao) Last updated 2 years ago * [Functional Overview](https://whitepaper.dexe.network/tech-architecture#functional-overview) * [DLSL](https://whitepaper.dexe.network/tech-architecture#dlsl) * [DAO](https://whitepaper.dexe.network/tech-architecture#dao) * [Proposals](https://whitepaper.dexe.network/tech-architecture#proposals) * [External Tokens](https://whitepaper.dexe.network/tech-architecture#external-tokens) * [Security](https://whitepaper.dexe.network/tech-architecture#security) --- # Voting Models | DeXe Protocol Whitepaper Navigating governance in a decentralized world presents a unique set of challenges. Traditional frameworks often struggle to balance efficiency and inclusivity and rarely scale well with the community's evolving needs. The Protocol suggests a solution to this challenge with various voting models. When you create a DAO, you can choose a governance logic that best suits your objectives. [hashtag](https://whitepaper.dexe.network/voting-logic/voting-models#linear-voting) Linear Voting ------------------------------------------------------------------------------------------------------ Linear governance is a clear-cut approach where each token grants one vote, providing simple and direct decision-making. Such a configuration is ideal for small organizations with uncomplicated tasks that do not require complex governance logic. While easy to understand and implement, the linear model doesn't leverage the full capabilities of the Protocol. In this model, all votes are counted linearly, equivalently to the number of tokens held. Features like expert functionality and token delegation are underutilized in such DAOs. The reason is that an expert's vote is treated the same as a regular token holder's vote, regardless of their level of expertise or trust within the DAO community. Additionally, this model does little to combat the consolidation of power, as any number of tokens can be concentrated in a single wallet without diminishing voting strength. **Advantages:** * Ease of Use: The linear voting model is easy to understand and implement. * Clarity in Vote Counting: The method for tallying votes is transparent and straightforward. **Disadvantages:** * Underutilization of Platform Features: The model doesn't motivate users to delegate tokens to experts, thus not taking full advantage of the platform's functionalities. * Lack of Power Decentralization: No mechanisms to discourage the concentration of tokens (and, thus, power) in a single wallet. No deterring factors or incentives exist to encourage the delegation of tokens. * Lack of Flexibility. [hashtag](https://whitepaper.dexe.network/voting-logic/voting-models#nonlinear-voting) Nonlinear Voting ------------------------------------------------------------------------------------------------------------ Weighted voting is a nonlinear voting system designed to determine the voting power based not just on token balance but also on various parameters aimed at enhancing governance efficiency and establishing a more flexible voting logic. Nonlinear functions in this system serve to prevent plutocracy — the concentration of power in the hands of a few — by slowing down the increase in voting power as a token balance grows. This mechanism better reflects the voices of the community and diminishes the influence of large token holders. Furthermore, weighted voting considers different coefficients when tallying votes for different groups, fully embracing the role of experts within a DAO. It creates mechanisms for building competent communities where expertise can be rewarded in decision-making processes. Ordinary DAO members can delegate their tokens to qualified experts who vote on behalf of regular holders, thus enhancing the significance of their tokens. It also saves time and gas fees by delegating decision-making to trusted experts. DeXe Protocol DAO has introduced a specially designed governance model focusing on knowledge, expertise, and participant contributions. This model contains a combination of mathematical and conceptual measures that counteract the concentration of power in a single party, considering expertise in vote counting and encouraging active involvement by incentivisation mechanisms. **Advantages:** * Antiplutocratic: promotes a democratic and equitable voting structure by mitigating power dominance. * Power of expertise: rewards knowledge and expertise over mere token ownership. * Flexible in design: enhances adaptive approach in designing DAOs with complex structures and specific needs. **Disadvantages:** * More challenging to implement: demands a complex approach for implementation, requiring a more profound knowledge of math models. DeXe Protocol DAO has developed its weighted voting model, which will be elaborated on in the section about the concept of Meritocratic Governance below. This model incorporates mathematical and conceptual solutions, blending linear and nonlinear functions to achieve practical decision-making tools. It incentivizes DAO members, encourages competent decisions, and enhances protection against malicious actions that could disrupt the DAO's operations. As with the entire Protocol, this model is open-source and will be available for selection when creating a DAO on the DeXe Protocol. [hashtag](https://whitepaper.dexe.network/voting-logic/voting-models#custom-voting-logic) Custom voting logic ------------------------------------------------------------------------------------------------------------------ The Protocol offers the ability to customize your voting model by integrating it as a custom contract that meets all the necessary Protocol standards. When setting up a custom voting logic, the DAO creator assumes full responsibility for tallying votes and distributing rewards for voting, as the Protocol cannot guarantee the security of user-designed solutions. However, DeXe Protocol DAO encourages the discovery of more advanced and forward-thinking governance models and therefore provides this capability out-of-the-box. The Protocol includes all the necessary methods for connecting custom contracts for the voting model. [PreviousValidator's votingchevron-left](https://whitepaper.dexe.network/voting-logic/validators-voting) [NextProposal Circuitchevron-right](https://whitepaper.dexe.network/proposal-circuit) Last updated 2 years ago * [Linear Voting](https://whitepaper.dexe.network/voting-logic/voting-models#linear-voting) * [Nonlinear Voting](https://whitepaper.dexe.network/voting-logic/voting-models#nonlinear-voting) * [Custom voting logic](https://whitepaper.dexe.network/voting-logic/voting-models#custom-voting-logic) --- # Conclusion | DeXe Protocol Whitepaper What DeXe Protocol DAO aims to create via the Protocol and using its own DAO as an example is both the constructor and the behaviour model for DAOs and DAO members. This model rewards meritocracy, promotes democracy, and espouses full transparency. It has a place for everyone to provide valuable contributions in whichever way he can, including by giving multiple clear paths to receive rewards for both your own useful activity and your support of activity done by proven experts. It is a system where motivations can align for each individual and the entirety of the ecosystem to benefit together without playing zero-sum games. At the end of the day, it is a way for people to choose their way of organization and find those ways that help them organize in the best way for their group, community, or company. You have your particular vision - now go and DeXecute it! [PreviousLegal Structurechevron-left](https://whitepaper.dexe.network/dexe-protocol-dao/legal-structure) Last updated 2 years ago --- # DeXe Protocol DAO | DeXe Protocol Whitepaper The Protocol is governed by DeXe Protocol DAO, which is responsible for the Protocol's continued development and improvement. DeXe Protocol DAO is a decentralized autonomous organization built around a specific mission and vision outlined above. To achieve them, DeXe Protocol DAO is releasing the DeXe Protocol, which we hope to be the dominant toolkit for future and current DAOs to use in building and updating their own DAO blueprints. The DAO’s governance token is $DEXE. We see the Protocol not merely as a constructor but as a community forming around it. This community must be built on the principles of meritocracy, autonomy, transparency, flexibility, and sustained growth. A community that is inclusive of the ideas and interests of all members for the benefit of the community as a whole. It must include respect for experts and a clear path to proving such expertise. It must be free to decide its path via the proposal and voting system so fundamental to DAOs, whether on-chain, off-chain, or both. ### [hashtag](https://whitepaper.dexe.network/dexe-protocol-dao#dexe-protocol-dao-membership) **DeXe** Protocol **DAO Membership** As with most DAOs, holders of the $DEXE token automatically become DeXe Protocol DAO members (the “Member”). Any Member can create proposals on every aspect of our DAO, vote on them, and execute passed proposals into action. DeXe Protocol DAO has a nonlinear voting mechanism using the Protocol's math and logic. [PreviousTech architecturechevron-left](https://whitepaper.dexe.network/tech-architecture) [NextToken & Treasurychevron-right](https://whitepaper.dexe.network/dexe-protocol-dao/token-and-treasury) Last updated 2 years ago --- # Legal Structure | DeXe Protocol Whitepaper Per an accepted and executed by the Members proposal, DeXe Protocol DAO is to have an off-chain ministerial structure via a Swiss Association (the “Association”). Its sole activity is the off-chain Treasury administration on the operational level and implementation of decisions of the DAO by means of off-chain instruments. Practically speaking, the Association may have the following functions: * Its Council members may serve as the executors of the decisions of the DAO to make any transfers from the Association’s reserve to other entities based on executed DAO proposals. * It may administer and implement any grant programs approved by the DAO and make legally binding agreements with grant receivers. * It may engage service providers and utilize other off-chain means for the purposes of the Protocol development and enhancement, namely, the Association may engage software development services, marketing services, legal and other services providers; organize events such as conferences or hackathons; engage certain crucial individuals, whose participation may be beneficial for DeXe, as advisors or in other capacity. * It may perform any other off-chain activity which is beneficial to DeXe Protocol DAO and its community. Council members may distribute funds from the Treasury for various operational needs but strictly within the parameters set by the DAO via the proposal path. This means that the DAO sets both the limits of how much the Council may withdraw within a certain period (week/month/year/etc.) and which token they may withdraw (e.g. they could withdraw $DEXE and $ETH but no other token). If Council members wish to take out treasury funds (within the parameters set for them), they hold a Council-only vote on it. When the DeXe Protocol DAO validator is appointed by a DAO (rather than by other DeXe Protocol DAO validators), that person automatically becomes a Council member as well. Council members may be changed at any time by the decision of the DAO. [PreviousToken & Treasurychevron-left](https://whitepaper.dexe.network/dexe-protocol-dao/token-and-treasury) [NextConclusionchevron-right](https://whitepaper.dexe.network/conclusion) Last updated 2 years ago --- # Mathematical Logic | DeXe Protocol Whitepaper DeXe Protocol DAO employs a nonlinear voting system that accounts for more than just the number of tokens held; it also factors in the DAO's level of trust in the voter and a variety of other controlled and customizable parameters to ensure the organization's balanced operation. At the heart of DeXe Protocol DAO's vote calculation are piecewise-defined functions allowing precise control over voting power values across all ranges, minimizing the risk of manipulation. To construct these nonlinear dependencies, the Protocol utilizes polynomial functions of the 4th and 3rd degree. ![](https://whitepaper.dexe.network/~gitbook/image?url=https%3A%2F%2F3671592714-files.gitbook.io%2F%7E%2Ffiles%2Fv0%2Fb%2Fgitbook-x-prod.appspot.com%2Fo%2Fspaces%252Fy3BU6XjkMvE5ZpghiFRu%252Fuploads%252FKYkF4iWgEe0VT4la4N6T%252FGroup%25201171275550.png%3Falt%3Dmedia%26token%3D9f799b5a-4dde-4e2a-b4d4-2b6827942ad7&width=768&dpr=3&quality=100&sign=1d899d05&sv=2) The graph displays three functions, each illustrating how the voting power increases with the number of tokens for different cases: 1. The function for regular DAO members — the ordinary token holders. 2. The function for experts who have been granted the relevant status within the DAO, in case if 100% of the tokens are either on their own balance or delegated from the private balances of regular DAO members. This function assigns more weight to the votes of those selected by the DAO's decision. 3. The function for experts whose tokens are 100% delegated from the treasury. As shown, tokens delegated from the Treasury confer even greater weight to the experts' votes, reflecting the DAO's exceptional trust in such entities mirrored in the strength of their vote. 4. In cases where experts have tokens delegated to them both from the balances of regular DAO members and from its treasury, the function for calculating voting power will yield an intermediate value between functions 2 and 3. This value is proportionate to the ratio of tokens delegated from the treasury to those delegated by regular DAO members plus any tokens from the expert's own balance. [hashtag](https://whitepaper.dexe.network/meritocratic-governance/mathematical-logic#members-function) Members’ function ----------------------------------------------------------------------------------------------------------------------------- The function for regular DAO members is a piecewise dependence consisting of two ranges: from 0% to 7% of the token's Total Supply, there's a standard linear function where the voting power is equal to the number of tokens; from 7% to 100% of the Total Supply, it's a third-degree polynomial that gradually slows its growth, preventing the concentration of power with large token holdings on a single DAO member's balance. Unlike the square root function, this dependency prevents potential manipulations with low token balances, avoiding the exploitation of rapid function growth at smaller ranges. Thanks to its piecewise nature, the developed dependence is more balanced and secure. Vm(t)\={km(7⋅TS⋅1100+a(100tTS−7)+b(100tTS−7)2+c(100tTS−7)3)TS100,for t≥7% of TSt,otherwiseV\_{m}(t) = \\begin{cases} k\_m \\Bigg(7 \\cdot TS \\cdot \\frac{1}{100} + a \\left(\\frac{100t}{TS} - 7\\right) \\\\ \\quad + b \\left(\\frac{100t}{TS} - 7\\right)^2 + c \\left(\\frac{100t}{TS} - 7\\right)^3\\Bigg)\\frac{TS}{100}, & \\text{for } t \\geq 7\\% \\text{ of } TS \\\\\\\\ t, & \\text{otherwise} \\end{cases} Vm​(t)\=⎩⎨⎧​km​(7⋅TS⋅1001​+a(TS100t​−7)+b(TS100t​−7)2+c(TS100t​−7)3)100TS​,t,​for t≥7% of TSotherwise​ **Where:** `**V_m**` — voting power for regular DAO members `**t**` — token balance of a voter `_**TS**_` _— total supply of a DAO_ `_**k_m**_` _—_ the slope factor for the function applied to DAO members. By default, the value of _k\_m_ = 0.97 `**a**`, `**b**`, `**c**` — parameters, which are defined to best suit the mathematical and conceptual objectives. By default, there value is: _**a**_ _= 1.041_ _**b**_ _= -0.007211_ _**c**_ _= 0.00001994_ [hashtag](https://whitepaper.dexe.network/meritocratic-governance/mathematical-logic#expert-function) Expert function -------------------------------------------------------------------------------------------------------------------------- The function for regular experts is a piecewise-defined 4th-degree polynomial composed of two ranges, each with its own set of coefficients for each partial. The piecewise nature of the functions allows for more precise control over the voting power value. The basis is the core function _**V\_exp**_**(**_**t**_**)**. For each expert, this base function will have its own slope coefficient, _**k**_, within a specific range. By default, _**k**_ is within the range \[0.92; 1.08\]. If all tokens are delegated to the expert from the DAO's treasury, their _**k**_ coefficient will be 1.08 — the maximum value. If all tokens are delegated to the expert by regular DAO members or are owned by the expert, _**k**_ will be at the minimum value of 0.92. In cases where an expert has tokens delegated from both the treasury and regular members, their coefficient _**k**_ is calculated based on the proportion of these tokens, indicated as _**R**_ _(R=1, when 100% tokens are from the treasury and R=0, when 100% tokens are from the members' balances)_. The formula for the _**k**_ parameter is as follows: k\=kmin⋅R+kmax⋅(1−R)k = k\_{\\text{min}} \\cdot R + k\_{\\text{max}} \\cdot (1 - R)k\=kmin​⋅R+kmax​⋅(1−R) Therefore, the value of the expert function will be determined within the range of the piecewise-defined function _V_exp(_t_) with k\_min = 0.92 and \*k\_\*max = 1.08: Vexp(t)\={k(a+b(100tTS−6.63)+c(100tTS−6.63)2+d(100tTS−6.63)3+e(100tTS−6.63)4)TS100,for t≥6.63% of TSk(f(100tTS)4+g(100tTS)3+h(100tTS)2+i(100tTS))TS100,otherwise V\_{exp}(t) = \\begin{cases} k \\Bigg(a + b \\left(\\frac{100t}{TS} - 6.63\\right) + c \\left(\\frac{100t}{TS} - 6.63\\right)^2 \\\\ \\quad + d \\left(\\frac{100t}{TS} - 6.63\\right)^3 + e \\left(\\frac{100t}{TS} - 6.63\\right)^4\\Bigg)\\frac{TS}{100}, & \\text{for } t \\geq 6.63\\% \\text{ of } TS \\\\\\\\ k \\Bigg(f \\left(\\frac{100t}{TS}\\right)^4 + g \\left(\\frac{100t}{TS}\\right)^3 \\\\ \\quad + h \\left(\\frac{100t}{TS}\\right)^2 + i \\left(\\frac{100t}{TS}\\right)\\Bigg)\\frac{TS}{100}, & \\text{otherwise} \\end{cases} Vexp​(t)\=⎩⎨⎧​k(a+b(TS100t​−6.63)+c(TS100t​−6.63)2+d(TS100t​−6.63)3+e(TS100t​−6.63)4)100TS​,k(f(TS100t​)4+g(TS100t​)3+h(TS100t​)2+i(TS100t​))100TS​,​for t≥6.63% of TSotherwise​ **Where:** `**V_exp**` — voting power `**t**` — token balance of a voter `_**TS**_` _— total supply of a specific DAO_ `_**k**_` _— the slope factor for the function applied to experts of a DAO. By default, the value of k varies from 0,92 to 1,08 depending on the proportion of tokens delegated from the treasury and from members wallets or owned tokens. The greater the proportion of tokens delegated from the treasury, the higher the value of k, and consequently, the higher the values the function will reach._ `**a**`**,** `**b**`**,** `**c**` **,** `**d**` **,** `**e**` **,** `**f**` **,** `**g**` **,** `**h**` **,** `**i**`_— parameters, which are defined to best suit the mathematical and conceptual objectives. By default, there value is:_ `_**a**_` _= 8.83755895036092_ `_**b**_` _= 1.130_ `_**c**_` _= -0.006086_ `_**d**_` _= 0.00004147_ `_**e**_` _= -0.000000148_ `_**f**_` _= -0.001328_ `_**g**_` _= 0.023761_ `_**h**_` _= -0.169889_ `_**i**_` _= 1.801894_ [PreviousConceptual Objectiveschevron-left](https://whitepaper.dexe.network/meritocratic-governance/conceptual-objectives) [NextTech architecturechevron-right](https://whitepaper.dexe.network/tech-architecture) Last updated 2 years ago * [Members’ function](https://whitepaper.dexe.network/meritocratic-governance/mathematical-logic#members-function) * [Expert function](https://whitepaper.dexe.network/meritocratic-governance/mathematical-logic#expert-function) --- # Token & Treasury | DeXe Protocol Whitepaper The $DEXE token is a native utility governance token for DeXe Protocol DAO. It is used among holders, private contributors, and expert sub-DAOs to vote and govern the Treasury. As a governance token, $DEXE allows the DeXe Protocol DAO to function as the DAO that is managing the Protocol fully. The Members can propose, vote on, and execute the DeXe Protocol DAO's decisions in a transparent and efficient governance model with this governance token. Through the governance proposals voted on by $DEXE holders and delegates, the community can support the growth, enhancement, and popularization of the DeXe Protocol in a truly decentralized, community-driven way. With $DEXE being freely available to everyone, its use in governance fosters a culture of inclusive, meritocratic, and equitable decision-making for DeXe Protocol’s governance, as well as for any other protocols that choose to involve #DEXE holders in their own DAOs' governance process. As a significant part of the Treasury holdings, the $DEXE token may be used, if and when so decided via the community proposal and voting process, to, for example: **Governance:** $DEXE allows the DeXe Protocol DAO to fully function as the DAO managing the Protocol by voting the holders of $DEXE. **Rewards:** Active contributors of the DAO will get rewards from the Treasury for their participation in creating proposals, voting, and proposal execution. **Token fees:** For other DAOs, using the Protocol is free. However, there are the Protocol fees embedded in some functionalities. For instance, fees are charged for distributing rewards among active contributors and for launching ITAs — initial treasury allocations. These fees are gathered to the DeXe DAO Treasury for the further growth of the Protocol, managed by the $DEXE holders. **Grants:** The Treasury, upon community consensus, may be used for: * Funding R&D within the Protocol and broader decentralized sectors. * Driving public education on tech innovations. * Organizing events to promote DeXe Protocol DAO. * Support and finance research and development activities and projects with the ecosystem of the Protocol and other projects in the sphere of decentralized blockchain technology. * Promote and educate the public on new technologies in blockchain technology. * Organize conferences and other events promoting the DAO or Protocol. To ensure that the Treasury is used for further scaling of the Protocol, building and supporting the ecosystem, and other activities most likely to benefit the DAO in the long term, the expert sub-DAOs will play a big part in managing the treasury via tokens delegated to those experts. To incentivize broad and thoughtful participation by the entire community, the $DEXE token will continue distributing rewards for successful voting and proposal completion performance in DeXe Protocol DAO. The goal is to give the most voting power to the most active and effective Members while maintaining decentralization, transparency, and meritocracy. For example, Members will receive higher rewards for tokens delegated to expert sub-DAOs that keep proving themselves to be the experts in their field and of benefit to the DAO. The common practice of being rewarded for zero activity or mindless activity will become significantly less beneficial than participating thoughtfully or delegating to those who do. Nonlinear voting rewards will also prevent the excessive influence of whales DAO. As a DAO, it is entirely in the hands of the $DEXE token holders and delegates to decide on any additional utilities for the $DEXE token. $DEXE tokens are native to ERC-20 and BEP-20: * ERC20: [0xde4EE8057785A7e8e800Db58F9784845A5C2Cbd6arrow-up-right](https://etherscan.io/address/0xde4EE8057785A7e8e800Db58F9784845A5C2Cbd6) * BEP20: [0x6E88056E8376Ae7709496Ba64d37fa2f8015ce3earrow-up-right](https://bscscan.com/address/0x6E88056E8376Ae7709496Ba64d37fa2f8015ce3e) #### [hashtag](https://whitepaper.dexe.network/dexe-protocol-dao/token-and-treasury#delegation) **Delegation** Per the Protocol’s logic, when you delegate tokens, you still retain ownership of them. They get locked in the delegation smart contract until you recall them (if a delegate casts your votes for an ongoing - aka active - vote and you recalled them, their vote is automatically cancelled, and you can vote with them yourself). [PreviousDeXe Protocol DAOchevron-left](https://whitepaper.dexe.network/dexe-protocol-dao) [NextLegal Structurechevron-right](https://whitepaper.dexe.network/dexe-protocol-dao/legal-structure) Last updated 2 years ago --- # Validator's voting | DeXe Protocol Whitepaper Validator voting is the second round activated when configuring the Validators assigned during creating a DAO or when making further changes to the DAO's constitution. It is an additional security measure designed to protect the DAO from malicious proposals and manipulations, similar to double-factor authentication. After the main voting phase, the Validator voting begins. Validators use a separate token that cannot be transferred to another wallet. Validator voting takes effect after the main voting phase and also has its own quorum and voting duration settings. After the Validator voting ends, the proposal is either accepted and proceeds to the execution stage or rejected. Additionally, Validators have their own types of proposals that they can conduct without involving the entire DAO. These proposals are essential for managing the DAO's sustainability processes that do not require full DAO participation to avoid slowing down operations. [PreviousOff-chain votingchevron-left](https://whitepaper.dexe.network/voting-logic/off-chain-voting) [NextVoting Modelschevron-right](https://whitepaper.dexe.network/voting-logic/voting-models) Last updated 2 years ago ---