Polygon, an Ethereum scaling full-stack solution bringing mass adoption to the Ethereum platform, today announced plans to create a decentralized autonomous organization (DAO) for DeFi and Web3. Polygon proposes the DAO to bootstrap DeFi growth and help onboard the next 100 million users to its platform.
With the majority of Web 3.0 projects such as Sushiswap, Curve, Aave, Balancer, Kyber already using Polygon’s proof of stake chain (PoS) as their preferred scaling solution, formulating a DAO was the next logical step to aid collaboration and composability between blockchain-based systems — two crucial facets for the success of Web 3.0, Polygon said.
Now, with the addition of Zk-rollups set to unlock full network scalability, Polygon’s mission to onboard users via a wholly scalable ecosystem DAO can finally be launched. The DAO will move Polygon beyond its PoS ties and harness its SDK and rollup chains to become a cross-chain protocol embracing the totality of Web 3 under one platform.
Polygon will be leveraging a portion of their $100 million #DeFiforAll Fund to bring the DAO to reality. The fund was created to make DeFi more accessible and onboard more end-users, aligning strongly with the ethos of the proposed DAO.
A DAO is a blockchain-based organizational model which spreads out throughout the organization, rather than in a hierarchical structure. DAOs are intended to eliminate centralization from essential operations. Instead, they allow organizations to govern via a distributed community of users and administer decisions through self-executing rules encoded via smart contracts.
Cryptographic instructions are automatically carried out when certain conditions (predetermined by members) are triggered. Instead of having to trust one individual or entity to make decisions or take actions on behalf of others, members typically use governance tokens – such as Compound, Badger, and BarnBridge – to vote on important matters. The result is higher levels of transparency, cost savings, and decentralized decision-making.
Polygon has already announced a $10M DAO with 0x protocol to fund projects that use 0x APIs on its platform. The newly Web 3 proposed Ecosystem DAO will be a natural extension to build a larger ecosystem and onboard the next generation of users to Ethereum. The company’s overarching intention is to decentralize specific internal decision-making and invite the community to have a say in the ongoing development of the Polygon DeFi sector. An additional goal is to foster greater cross-collaboration and compatibility within community projects.
An incentivized governance system will be instituted. The incentive mechanism is a bespoke governance token that will allow community members to vote on proposals that shape the future of the protocol and govern the DAO. The governance token is expected to be airdropped to loyal Polygon ecosystem users.
Polygon’s software development kit (SDK) already allows developers to build and scale their chain, securing the network via their own validators or Polygon’s validators. Sports prediction platform SportX recently launched SX Network and will be going live very soon as the first Polygon project to do so. To scale solutions via the SDK requires multiple integrations with Chainlink, TheGraph, wallet integrations and on/off ramps. These could be jointly funded by both projects via this DAO — opening up new collaborative inroads for funding and growth.
A range of Polygon-integrated projects have already been approved to form the Ecosystem DAO, including Chainlink, a decentralized blockchain oracle network; QuickSwap, a permissionless decentralized exchange (DEX) based on Ethereum, and powered by Polygon Network’s scalability infrastructure; SushiSwap, an Ethereum-based decentralized exchange that lets you trade a wide range of tokens; and Aave, the biggest lending market on Polygon.
“Chainlink powers the DeFi economy through high-quality decentralized oracle networks that deliver external data and off-chain computations across various chains. With Polygon entering a new phase of increased decentralization, we are glad to support the growth of the smart contract ecosystem and help grow DeFi and Web3 together,” stated Daniel Kochis, head of Partnerships at Chainlink Labs.
“Polygon’s DeFi success has been instrumental in growing QuickSwap to a premier DEX with more than 1B TVL. QuickSwap is glad to join and contribute to Polygon Ecosystem DAO as one of the core members to drive decision making and involve our Quickswap community. Looking forward to this!” said Sameep Singhania, CTO of Quickswap.
Lending markets and established decentralized exchanges (DEX) are the foundational blocks of DeFi ecosystems, and many dApps build on top of these platforms. By including them in the decision-making process, Polygon invites new projects to make use of the ecosystem’s DeFi legos and build entirely new and unique models of DeFi protocol on Polygon.
Polygon will be evolving the Ecosystem DAO initiative in the coming weeks and months. For now, Polygon has started to piece together the initial framework of the governance structure, whilst it asks for the community’s feedback to help shape and build the foundations upon which the DAO will stand.