Introducing Flux DAO — Flux: the trust-less data layer
The Flux DAO is the mission control of the Protocol — a guiding hand controlled by the community.
Decentralized Finance (DeFi) is now at the forefront of developing financial infrastructure on the blockchain, solving some of the biggest problems in the financial industry while providing decentralized solutions that lower barriers to entry and participation. The decentralization of finance has opened the door to a wide range of new opportunities, but it’s also created an urgent need for ever more accurate and robust data.
As trust-less systems, blockchains are fundamentally designed to be adversarial, eliminating the single points of failure and reliance on trust prevalent in the traditional systems. However, the success of this network relies heavily on the contribution and diversity of network actors. While the groundbreaking innovations the blockchain has ushered in cannot be overstated, the underlying technology is still risky since it’s been designed to function as a trust-less environment. This is why it’s crucial to have infrastructures that can help safeguard it against malicious actors, smart contract errors, and network issues.
Putting the power of this infrastructure in the hands of stakeholders is what Flux DAO is all about. The Flux DAO allows the Flux community to climb aboard the flux spaceship and ensure the network is healthy. The Flux DAO is the mission control of the Flux Protocol — a guiding hand controlled by the community.
Hardening the Data Layer
We are building a data protocol for the next generation of decentralized applications. This trust-less and decentralized protocol allows any developer to easily plug it into their existing infrastructure or build entirely new applications on top of the source code.
The Flux DAO is infrastructure for transparent, fair, and democratic decision-making, enabling actors and stakeholders to collectively decide upon and direct the flow of value in the ever-evolving DeFi landscape. The DAO is a framework for the community to self-organize around issues they are passionate about and support change in the protocol and its ecosystem.
As the DAO is constantly in a state of growth, there remains a need to incentivize honest reporting, voting behavior, and punish malicious acts or acts that could jeopardize the liveliness of the network. The FLX token is the utility token that binds the ecosystem together. Designed to reward the community for securing data feeds, FLX token provides economic incentives for users, while protecting the network.
- Interface Registry Curation
- Network Security and Integrity
- Protocol Governance
FLX token unites the DAO in four ways:
Interface Registry Curation:
FLX tokens are necessary for creating and removing request interfaces. This ensures that token holders can control the quality of projects that interface with the Flux Oracle. This allows the DAO to ensure that the most value is created for validators and the protocol, while protecting validators from valueless data requests.
Network Security and Integrity:
Any participant within the registry may issue a data request to the network. The request is sent to multiple validators who provide an outcome/response. There is always the probability for malicious actors to manipulate the true outcome. To mitigate this, every data request is protected by the participant-defined dispute period and economic stake. Validators can challenge the outcome of any data request during the dispute period by staking tokens.
FLX token holders govern the protocol including changes to data request fees, upgrading the system, and changing network parameters. Since token holders are the ones who vote for protocol changes, holders can democratically propose changes and execute their implementation without resorting to any supervisory authority.
Five percent of the token’s total supply will be used to support early stage projects that plan to utilize Flux’s oracle. These grants will provide Flux Token to allow early-stage projects to participate in the Flux ecosystem. Grants will also be rewarded in the form of $USDC to provide runway to early projects.
We have spent the past couple of weeks laying down the foundation for putting the protocol in the hands of the community. In the coming days, we will be diving deeper into the token economy.
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Originally published at https://www.fluxprotocol.org.