Intro
Over the last few years, one of the driving narratives in the crypto world is how the blockchain world will intertwine with the traditional financial space. Recent developments like the BTC ETF and Blackrock’s tokenization efforts are beginning to shed light on that narrative. However, another aspect that some chains believe is even more important is how blockchains will coalesce with the physical world and individual humans. Vechain and its recent emphasis on using blockchain to incentivize real-world sustainability efforts are one shining example in this narrative. With the Vechain ecosystem, VeBetterDAO, accompanied by its own whitepaper, has emerged as the latest development, aiming to harmonize sustainability initiatives with the decentralized and autonomous mechanisms of blockchain.
This novel approach, underpinned by the decentralized autonomous organization (DAO) structure, revolutionizes user engagement by leveraging the 'X-2-Earn' model to incentivize sustainable actions. Rooted in the rich legacy of blockchain-based sustainability efforts, such as the collaborative endeavors of DNV and VeChain, VeBetterDAO stands on the shoulders of giants. It embodies the culmination of VeChain Foundation’s rigorous technical advancements, including the introduction of platforms like VORJ, Marketplace as a Service, and its first enterprise user, Gresini Racing, VeWorld, a new SDK, new dApp kit and revamped developer documentation, all aiming to bolster this sustainability-centric initiative. The collaboration with Boston Consulting Group (BCG) signifies a strategic alignment with global sustainability and ESG consulting leadership, ensuring that VeBetterDAO's technological innovations are firmly anchored within the broader sustainability and corporate responsibility discourse. This initiative not only aims to redefine the utilization of digital platforms in fostering sustainability but also seeks to democratize sustainable change, enabling widespread community participation in global sustainability efforts.
VeBetterDAO Gresini Racing Web3 Marketplace
In 2022, Vechain joined forces with Boston Consulting Group (BCG) to spearhead advancements in sustainable business practices. The collaboration formally entered a new phase at an event called ‘The HiVe’, and the launch of the co-developed ‘Web3 for Better’ whitepaper, which outlined this new vision and strategy for integrating sustainability and Web3. With an acute awareness of the need for sustainability at the heart of corporate strategies, this collaboration aims to harness Vechain’s cutting-edge blockchain technology solutions and BCG’s vast experience in management consulting to tackle worldwide environmental issues. This partnership signifies a dedication to not only achieving business success but also to ensuring the prosperity of upcoming generations and the preservation of the planet's ecosystem.
As the blockchain space evolves, the VeBetterDAO represents a pioneering approach to integrating sustainability with blockchain technology. The platform is twofold: a dApp ecosystem anchored in a decentralized autonomous organization (DAO). It pioneers the incentivization of user engagement through a diverse range of applications, notably categorized under the 'X-2-Earn' model. This innovative model, covered in previous reports, opens a gateway for applications focused on enhancing sustainability.
Historically, platforms such as the DNV x VeChain’s Low Carbon Ecosystem have set a precedent for such initiatives, with significant applications in sectors like electric vehicle manufacturing, as exemplified by partnerships with industry giants like BYD, China's leading EV manufacturer. The VeBetterDAO is the product of extensive technical development efforts by the VeChain Foundation, which has introduced an array of tools and platforms, such as VORJ, VeWorld, and a new SDK, to support this initiative.
A key element in the development and conceptualization of the VeBetterDAO has been its collaboration with the Boston Consulting Group (BCG), a global leader in sustainability and ESG consulting. This partnership underscores the project's commitment to grounding its technological innovations within the broader context of sustainable development and corporate responsibility.
The VeBetterDAO is positioned to redefine the role of digital platforms in promoting sustainability. Through strategic alliances with enterprise partners and Web3 developers, the project aims to launch a suite of applications that not only engage users but also offer tangible rewards for participation. This approach effectively democratizes the potential for sustainable change, empowering individuals to contribute to global sustainability efforts.
Why a DAO?
At the heart of the concept, a DAO is fundamentally a software construct, meticulously designed to encapsulate a set of rules and protocols that govern decision-making and resource allocation within the organization. These protocols are meticulously expressed within smart contracts and autonomously executed on a blockchain platform, thereby facilitating a collaborative environment wherein individuals globally can contribute and partake in the organizational decision-making processes.
Key features of DAOs include:
- Autonomy: DAOs' autonomy is primarily driven by the pre-established rules embedded within smart contracts. Automating these rules negates the necessity for intermediaries or centralized authority, ensuring that the organization's operations are transparent and predictable.
- Decentralization: By dispersing decision-making authority among its participants, usually through a voting mechanism, DAOs democratize governance. This model empowers stakeholders to collectively navigate the organization's trajectory, encompassing critical aspects such as resource distribution, project funding, and protocol enhancements.
- Transparency: A DAO's inherent transparency ensures that all operations and transactions are openly observable on the blockchain. Such clarity in operations cultivates trust and accountability amongst participants, enabling any observer to scrutinize the actions and outcomes transparently.
- Token-based Participation: A distinctive feature of DAOs is the issuance of tokens that symbolize ownership or voting rights. This approach allows participants to wield influence over decision-making processes. Token holders are entitled to propose, vote on initiatives, sculpt the organization's policies, and, in some instances, reap the rewards or dividends proportional to their contributions.
- Meritocracy and Incentives: DAOs are structured to incentivize participants in alignment with the organization's objectives, thereby fostering active engagement, innovation, and value creation. These incentives may manifest as tokens, enhanced governance authority, or a fraction of the organization’s earnings, among other forms.
Since their inception, DAOs have been deployed for a myriad of applications, ranging from decentralized investment consortia to community governance platforms, decentralized venture capital, and frameworks for collective decision-making. It is crucial to recognize, however, that the concept of DAOs is in a phase of continuous evolution. The technological underpinnings, governance models, and legal contexts that encapsulate DAOs are under ongoing development and refinement, underscoring the dynamic nature of this revolutionary organizational structure.
Traditional DAO Obstacles
Despite DAO’s obvious, theoretical advantages, several pivotal issues still remain, highlighting the nuanced challenges these entities face. A primary concern is the absence of legal recognition for DAOs, rendering individual members potentially liable for collective decisions, as evidenced by the SEC's legal action against LBRY DAO. Furthermore, developers crafting the smart contracts that underpin (typical) DAOs find themselves in a precarious legal gray area, where they could be held accountable for how others utilize their creations, blurring the lines of responsibility and raising questions about the legal implications of their work.
Additionally, DAOs typically rely on a collection of trusted contractors and token holders to manage risk and implement changes, which can limit scalability and deviate from the ideal of a trustless, autonomous system. The distribution of governance tokens in a typical DAO, such as AAVE or UNI, plays a pivotal role in these dynamics, often leading to centralization when tokens are unevenly allocated to core developers or early investors, instead of a broader user base. This centralization not only contradicts the principle of decentralization but also introduces security vulnerabilities.
Another hurdle is achieving widespread participation and engagement from stakeholders, requiring efforts to educate and incentivize diverse groups for representative governance and to prevent a few from dominating. The threat of Sybil attacks, where individuals create multiple identities to sway decisions, underscores the need for robust participant authentication while balancing privacy concerns.
The governance model, which grants the community direct control over vital protocol aspects, can inadvertently expose the system to attacks. The Beanstalk exploit, which led to a loss of $182 million, underscores the risks tied to governance tokens and the challenges in balancing decentralization with security.
The intricacies of managing collective investments and the implications of native tokens introduce additional layers of complexity and potential tax implications. Moreover, the competitive landscape for DAOs is varied, with some embracing full decentralization and others leaning towards more traditional organizational structures, which could confer competitive advantages.
Efficiency in decision-making is crucial, as the decentralized nature of blockchain can lead to slow and resource-intensive consensus processes. Solutions, including improved voting mechanisms, delegation systems, and dispute resolution, are vital for streamlining governance. The management of network upgrades and forks presents another layer of complexity, requiring careful coordination to avoid disruptions and maintain community cohesion. Furthermore, navigating the maze of legal and regulatory compliance across different jurisdictions adds to the governance challenge, necessitating a delicate balance between adhering to laws and preserving the decentralized ethos.
Education and awareness around blockchain governance are essential for stakeholder participation, pointing to a need for better resources and literacy efforts in the space. Addressing these challenges is not straightforward and requires continuous research, technological innovation, and collective effort from the blockchain community to refine and adapt governance models for the future.
Ethical considerations are paramount as well, especially regarding the tactics employed within DAO communities, such as public influence campaigns, psychological strategies, and manipulative practices. While activism within these entities can serve as a mechanism for accountability, it necessitates a transparent and ethical approach to preserve trust within the ecosystem and uphold the foundational principles of DAOs.
VeBetterDAO Tokenomics: Overcoming the Pitfalls
The evolution of token distribution among crypto projects and DAOs is shifting towards more complex, multi-tiered models that look to foster true decentralization and tackle issues like Sybil attacks and governance abuse. Tokens are evolving beyond mere assets of monetary value, instead, serving as governance and engagement tools that aim to transfer control to dedicated, long-term users. DAOs stand at the center of this innovation, and VeBetterDAO is no exception. It aims to significantly bolster the framework of its ecosystem through targeted token incentivization and governance strategies. The core of VeBetterDAO's economic model is anchored by two primary tokens, B3TR and VOT3, which are intricately designed to fulfill distinct, yet interrelated roles within the ecosystem. Additionally, VeBetterDAO was launched under the 'fair launch principle,' meaning there were no preallocations, private sales, or team allocations, further illustrating the core principles behind the project.
Roadmap
The launch strategy for VeBetterDAO is structured around three key phases: Pilot Show Alpha (Testnet Take-off), Pilot Show Beta (Mainnet Blitz), and the Go-Live Gala. The initial phase, Pilot Show Alpha, set to commence at the end of February 2024, involves the distribution of B3TR tokens through various means, including airdrops and community engagement activities. This phase serves as a foundational period, allowing users to familiarize themselves with the platform's functionalities while providing feedback for improvements.
The transition to the Mainnet, marked by the Pilot Show Beta phase, is slated for the end of Q2 2024. This phase not only signifies a technical transition but also ensures that tokens earned during the Testnet phase are carried over to the Mainnet. The culmination of these phases leads to the Go-Live Gala, coinciding with the anniversary of the VeChainThor mainnet on June 30th. This final phase introduces a range of new features and functionalities, including token minting, NFT maturity level advancements, and enhancements to the X-2-Earn applications, among others.
B3TR: The Incentive Backbone
B3TR is the cornerstone of the VeBetterDAO, acting as the multifaceted incentive token that underpins the DAO's Treasury Management and serves various critical functions. It is the central mechanism for incentivizing participation, facilitating the monetization for active contributors, and promoting innovative business models within the ecosystem. Furthermore, B3TR plays a pivotal role in sustainability initiatives, offering support for project development, fostering community growth, and enhancing engagement. Notably, it also provides a 1:1 backing for VOT3 tokens, which are integral for governance activities within VeBetterDAO.
B3TR issuances are split among three parties:
● The X-to-Earn Applications Pool (XAP)
● The Voting Participation Pool (VPP)
● The VeBetterDAO Treasury Pool (VTP)
Quadratic Voting and Quadratic Funding will be applied to XAP allocations. Quadratic Voting is an innovative voting system designed to allow participants to distribute their votes across various proposals, enabling a more nuanced expression of preferences compared to traditional one-vote-per-proposal systems. By adopting a quadratic formula for vote allocation, this method aims to level the playing field, reducing the imbalance of voting power by making additional votes progressively more expensive. This cost structure encourages voters to reserve their extra votes for proposals they care passionately about, effectively highlighting the intensity of their preferences.
VOT3: Steering Governance
VOT3 is tailored specifically towards governance, granting token holders the power to influence the decision-making processes of the DAO. Ownership of VOT3 is imperative for engaging in governance events, and it is strategically staked to guide the distribution of newly issued B3TR tokens. A unique feature of VOT3 is its 1:1 exchangeability with B3TR through a dedicated swap pool, designed with mechanisms to prevent any potential manipulation. Users will stake B3TR/VOT3 to allocate tokens to dApps of their choice, in return providing projects needed funding and users a yield for their engagement. The alignment of financial incentives aims to reduce any misalignment or disagreements that typically plague decentralized governance as well as encourage voter participation, an issue that most DAOs have experienced.
Governance
Joining the VeBetterDAO is a straightforward process that empowers anyone holding VOT3 tokens to participate actively in the governance of the platform. This ensures that all members have the opportunity to engage in voting events, contribute to governance discussions, and access the DAO's Treasury, fostering a community that is both inclusive and vibrant.
Upon its launch, VeBetterDAO will operate under a predefined set of governance protocols for the first year, a period deemed critical for assessing the platform's operational integrity and long-term feasibility. This initial Stabilization Period is designed to safeguard against potential exploits, with the VeChain Foundation retaining the authority to halt and resume B3TR token minting if necessary. The Vechain Foundation, tasked with the maintenance and enhancement of the VechainThor protocol, is governed by the Steering Committee, elected every two years by the community through VeVote, a decentralized platform. The Committee, a blend of experts across various fields, guides the Foundation's functional arms, balancing stakeholder interests to foster VechainThor's growth. Following this phase, the power to continue or discontinue such safeguards will transition to the community, which will deliberate on this issue through bi-annual voting events.
Proposal Submission Process
Proposals serve as the foundation of the DAO's operational framework, with the community playing a crucial role in shaping the proposal pipeline. VeBetterDAO will host a dedicated forum for the submission, discussion, and voting on proposals. This forum will not only facilitate transparent dialogue but will also provide a comprehensive dashboard displaying voting outcomes, archival records, and detailed proposal analytics. To advance to the implementation stage, proposals must undergo a rigorous vetting process, beginning with community discussions on the forum, followed by a preliminary 'temperature check,' and culminating in formal on-chain voting.
In the event of disputes arising from governance activities, resolution will be achieved through community-driven voting on pertinent proposals. To bolster the platform's security architecture, VeBetterDAO plans to appoint Security Guardians. These guardians, whose roles and powers will be more clearly defined as the platform evolves, will possess the limited authority to temporarily suspend certain protocol functions or take other emergency measures to ensure system integrity. Such actions, designed to be executed swiftly without procedural delays, will be under the direct oversight of the VeBetterDAO Operator, ensuring a balanced approach to emergency intervention and system transparency.
X-2-Earn, Grants, and More
The VeBetterDAO ecosystem is introducing a novel approach to sustainability and user engagement through its X-2-Earn applications. The "X" in X-2-Earn symbolizes the variable nature of these applications, allowing for a broad spectrum of sustainability-focused activities to be integrated into the earn mechanism. Whether it's planting trees through a 'Plant-2-Earn' model or encouraging physical activity with 'Sweat-2-Earn' dApps, the possibilities are vast and varied. These applications leverage B3TR tokens not only as a reward mechanism to incentivize user participation but also to support a range of other objectives, from fostering innovation among developers to driving marketing efforts and securing sponsorships.
The distribution of B3TR rewards within these X-2-Earn dApps is subject to the discretion of the individual projects, along with the approval of the community, which plays a pivotal role in sanctioning reward proposals via voting. For an X-2-Earn application to align with the VeBetterDAO ecosystem, it must adhere to three core principles: meaningfulness, feasibility, and value creation. Each application must contribute to sustainability efforts in a significant way, possess the capability to accurately record and reward user contributions, and ensure that these contributions offer collective value towards sustainability goals.
A critical aspect of integrating X-2-Earn applications into the VeBetterDAO ecosystem involves a thorough validation and qualification process. VeChain Node holders are at the forefront of this process, acting as both validators and qualifiers for these applications. For an X-2-Earn application to be listed on the VeBetterDAO platform, it must first obtain a minimum approval rating from both Economic and X-Node holders. This engagement occurs through various channels, including X Spaces, community forums, and social media platforms like Discord and Telegram, where projects must actively communicate and collaborate with potential stakeholders to secure weekly B3TR allocations.
The benchmark for a project to achieve listing on the VeBetterDAO platform is a qualification score of 100, as determined by VeChain Nodes. This stringent requirement ensures that only applications with a solid foundation in sustainability, a viable reward mechanism, and a clear value proposition make it onto the platform, thereby maintaining the integrity and purpose of the VeBetterDAO ecosystem. This process not only democratizes the development and integration of X-2-Earn applications but also reinforces the ecosystem's commitment to fostering sustainable practices through innovative blockchain solutions.
VeChain has introduced a new grant program aimed at fostering the development and maturation of X-2-Earn decentralized applications (dApps). The program is structured in a four-step process designed to support projects from initial development through to scaling and securing investment. Initially, projects can receive $100k in grants focused on business and sustainability development. Successful projects then progress to being listed on VeBetterDAO, gaining access to DAO token support along with community and marketing assistance. The third step involves professional business mentorship from BCG, guiding selected projects in their development and scaling efforts. Finally, outstanding projects are given the opportunity to meet with Venture Capital Partners, aiming to secure investment and elevate their platforms to new heights. For more, please see the VeBetterDAO whitepaper.
MaaS
While launching new initiatives to tackle the world’s sustainability problems may be enough for some, vechain hasn’t stopped there. The ambitious protocol has also taken a significant step forward in the NFT marketplace with the introduction of its Marketplace as a Service (MaaS). The innovative platform launched in March 2024 and created a new NFT marketplace that has removed the need for extensive coding or development expertise in order to participate as a user or a builder.
VeChain's MaaS aims to be a gateway to a new era of asset tokenization by facilitating the seamless integration of NFC technology, enabling users to transform tangible goods into tokenized assets, or "phygitals." This capability not only underscores VeChain's ambition to spearhead the tokenization movement but also positions the platform to capitalize on the burgeoning interest in merging physical items with digital tokens.
The hallmark of VeChain's MaaS lies in its user-centric approach, including the removal of transaction fees. Users can swiftly establish and brand their NFT marketplaces tailored to their specific needs, and builders can leverage fee-delegation technologies to pay the transaction fees on behalf of the user. Moreover, through a partnership with Transak, MaaS offers direct fiat transactions for NFT purchases, making the user experience reminiscent of traditional Web2 interfaces.
MaaS is a testament to VeChain's ongoing dedication to simplifying the digital asset landscape. By offering tools that mirror the ease of use and familiarity of Web2 applications, VeChain is not only expanding its ecosystem with MaaS but also reinforcing its vision with recent innovations like VORJ. This coherent strategy enhances the utility and accessibility of digital assets, paving the way for a future where tokenization and digital marketplaces become integral to our digital and physical lives.
Conclusion
VeBetterDAO represents a monumental stride in the integration of blockchain technology with sustainability efforts, underpinned by the innovative and participatory 'X-2-Earn' model. By fostering a robust ecosystem where users are rewarded for their contributions to sustainability, VeBetterDAO sets a new precedent for the role of digital platforms in environmental stewardship. The collaboration with the Boston Consulting Group and the introduction of a nuanced tokenomics framework underscore the project's commitment to not only advancing blockchain technology but also ensuring its alignment with sustainable development goals.
As VeBetterDAO progresses through its phased launch, culminating in the Go-Live Gala, it aims to democratize the potential for sustainable change and offer a blueprint for future initiatives at the intersection of blockchain and sustainability. Through strategic partnerships, innovative governance, and a focus on meaningful, sustainable actions, VeBetterDAO is paving the way for a future where blockchain technology plays a central role in global sustainability efforts, offering a model for how technology can be harnessed to foster a more sustainable and equitable world.
Disclaimer: This report was commissioned by the VeChain Foundation. This research report is exactly that — a research report. It is not intended to serve as financial advice, nor should you blindly assume that any of the information is accurate without confirming through your own research. Bitcoin, cryptocurrencies, and other digital assets are incredibly risky and nothing in this report should be considered an endorsement to buy or sell any asset. Never invest more than you are willing to lose and understand the risk that you are taking. Do your own research. All information in this report is for educational purposes only and should not be the basis for any investment decisions that you make.
Intro
Over the last few years, one of the driving narratives in the crypto world is how the blockchain world will intertwine with the traditional financial space. Recent developments like the BTC ETF and Blackrock’s tokenization efforts are beginning to shed light on that narrative. However, another aspect that some chains believe is even more important is how blockchains will coalesce with the physical world and individual humans. Vechain and its recent emphasis on using blockchain to incentivize real-world sustainability efforts are one shining example in this narrative. With the Vechain ecosystem, VeBetterDAO, accompanied by its own whitepaper, has emerged as the latest development, aiming to harmonize sustainability initiatives with the decentralized and autonomous mechanisms of blockchain.
This novel approach, underpinned by the decentralized autonomous organization (DAO) structure, revolutionizes user engagement by leveraging the 'X-2-Earn' model to incentivize sustainable actions. Rooted in the rich legacy of blockchain-based sustainability efforts, such as the collaborative endeavors of DNV and VeChain, VeBetterDAO stands on the shoulders of giants. It embodies the culmination of VeChain Foundation’s rigorous technical advancements, including the introduction of platforms like VORJ, Marketplace as a Service, and its first enterprise user, Gresini Racing, VeWorld, a new SDK, new dApp kit and revamped developer documentation, all aiming to bolster this sustainability-centric initiative. The collaboration with Boston Consulting Group (BCG) signifies a strategic alignment with global sustainability and ESG consulting leadership, ensuring that VeBetterDAO's technological innovations are firmly anchored within the broader sustainability and corporate responsibility discourse. This initiative not only aims to redefine the utilization of digital platforms in fostering sustainability but also seeks to democratize sustainable change, enabling widespread community participation in global sustainability efforts.
VeBetterDAO Gresini Racing Web3 Marketplace
In 2022, Vechain joined forces with Boston Consulting Group (BCG) to spearhead advancements in sustainable business practices. The collaboration formally entered a new phase at an event called ‘The HiVe’, and the launch of the co-developed ‘Web3 for Better’ whitepaper, which outlined this new vision and strategy for integrating sustainability and Web3. With an acute awareness of the need for sustainability at the heart of corporate strategies, this collaboration aims to harness Vechain’s cutting-edge blockchain technology solutions and BCG’s vast experience in management consulting to tackle worldwide environmental issues. This partnership signifies a dedication to not only achieving business success but also to ensuring the prosperity of upcoming generations and the preservation of the planet's ecosystem.
As the blockchain space evolves, the VeBetterDAO represents a pioneering approach to integrating sustainability with blockchain technology. The platform is twofold: a dApp ecosystem anchored in a decentralized autonomous organization (DAO). It pioneers the incentivization of user engagement through a diverse range of applications, notably categorized under the 'X-2-Earn' model. This innovative model, covered in previous reports, opens a gateway for applications focused on enhancing sustainability.
Historically, platforms such as the DNV x VeChain’s Low Carbon Ecosystem have set a precedent for such initiatives, with significant applications in sectors like electric vehicle manufacturing, as exemplified by partnerships with industry giants like BYD, China's leading EV manufacturer. The VeBetterDAO is the product of extensive technical development efforts by the VeChain Foundation, which has introduced an array of tools and platforms, such as VORJ, VeWorld, and a new SDK, to support this initiative.
A key element in the development and conceptualization of the VeBetterDAO has been its collaboration with the Boston Consulting Group (BCG), a global leader in sustainability and ESG consulting. This partnership underscores the project's commitment to grounding its technological innovations within the broader context of sustainable development and corporate responsibility.
The VeBetterDAO is positioned to redefine the role of digital platforms in promoting sustainability. Through strategic alliances with enterprise partners and Web3 developers, the project aims to launch a suite of applications that not only engage users but also offer tangible rewards for participation. This approach effectively democratizes the potential for sustainable change, empowering individuals to contribute to global sustainability efforts.
Why a DAO?
At the heart of the concept, a DAO is fundamentally a software construct, meticulously designed to encapsulate a set of rules and protocols that govern decision-making and resource allocation within the organization. These protocols are meticulously expressed within smart contracts and autonomously executed on a blockchain platform, thereby facilitating a collaborative environment wherein individuals globally can contribute and partake in the organizational decision-making processes.
Key features of DAOs include:
- Autonomy: DAOs' autonomy is primarily driven by the pre-established rules embedded within smart contracts. Automating these rules negates the necessity for intermediaries or centralized authority, ensuring that the organization's operations are transparent and predictable.
- Decentralization: By dispersing decision-making authority among its participants, usually through a voting mechanism, DAOs democratize governance. This model empowers stakeholders to collectively navigate the organization's trajectory, encompassing critical aspects such as resource distribution, project funding, and protocol enhancements.
- Transparency: A DAO's inherent transparency ensures that all operations and transactions are openly observable on the blockchain. Such clarity in operations cultivates trust and accountability amongst participants, enabling any observer to scrutinize the actions and outcomes transparently.
- Token-based Participation: A distinctive feature of DAOs is the issuance of tokens that symbolize ownership or voting rights. This approach allows participants to wield influence over decision-making processes. Token holders are entitled to propose, vote on initiatives, sculpt the organization's policies, and, in some instances, reap the rewards or dividends proportional to their contributions.
- Meritocracy and Incentives: DAOs are structured to incentivize participants in alignment with the organization's objectives, thereby fostering active engagement, innovation, and value creation. These incentives may manifest as tokens, enhanced governance authority, or a fraction of the organization’s earnings, among other forms.
Since their inception, DAOs have been deployed for a myriad of applications, ranging from decentralized investment consortia to community governance platforms, decentralized venture capital, and frameworks for collective decision-making. It is crucial to recognize, however, that the concept of DAOs is in a phase of continuous evolution. The technological underpinnings, governance models, and legal contexts that encapsulate DAOs are under ongoing development and refinement, underscoring the dynamic nature of this revolutionary organizational structure.
Traditional DAO Obstacles
Despite DAO’s obvious, theoretical advantages, several pivotal issues still remain, highlighting the nuanced challenges these entities face. A primary concern is the absence of legal recognition for DAOs, rendering individual members potentially liable for collective decisions, as evidenced by the SEC's legal action against LBRY DAO. Furthermore, developers crafting the smart contracts that underpin (typical) DAOs find themselves in a precarious legal gray area, where they could be held accountable for how others utilize their creations, blurring the lines of responsibility and raising questions about the legal implications of their work.
Additionally, DAOs typically rely on a collection of trusted contractors and token holders to manage risk and implement changes, which can limit scalability and deviate from the ideal of a trustless, autonomous system. The distribution of governance tokens in a typical DAO, such as AAVE or UNI, plays a pivotal role in these dynamics, often leading to centralization when tokens are unevenly allocated to core developers or early investors, instead of a broader user base. This centralization not only contradicts the principle of decentralization but also introduces security vulnerabilities.
Another hurdle is achieving widespread participation and engagement from stakeholders, requiring efforts to educate and incentivize diverse groups for representative governance and to prevent a few from dominating. The threat of Sybil attacks, where individuals create multiple identities to sway decisions, underscores the need for robust participant authentication while balancing privacy concerns.
The governance model, which grants the community direct control over vital protocol aspects, can inadvertently expose the system to attacks. The Beanstalk exploit, which led to a loss of $182 million, underscores the risks tied to governance tokens and the challenges in balancing decentralization with security.
The intricacies of managing collective investments and the implications of native tokens introduce additional layers of complexity and potential tax implications. Moreover, the competitive landscape for DAOs is varied, with some embracing full decentralization and others leaning towards more traditional organizational structures, which could confer competitive advantages.
Efficiency in decision-making is crucial, as the decentralized nature of blockchain can lead to slow and resource-intensive consensus processes. Solutions, including improved voting mechanisms, delegation systems, and dispute resolution, are vital for streamlining governance. The management of network upgrades and forks presents another layer of complexity, requiring careful coordination to avoid disruptions and maintain community cohesion. Furthermore, navigating the maze of legal and regulatory compliance across different jurisdictions adds to the governance challenge, necessitating a delicate balance between adhering to laws and preserving the decentralized ethos.
Education and awareness around blockchain governance are essential for stakeholder participation, pointing to a need for better resources and literacy efforts in the space. Addressing these challenges is not straightforward and requires continuous research, technological innovation, and collective effort from the blockchain community to refine and adapt governance models for the future.
Ethical considerations are paramount as well, especially regarding the tactics employed within DAO communities, such as public influence campaigns, psychological strategies, and manipulative practices. While activism within these entities can serve as a mechanism for accountability, it necessitates a transparent and ethical approach to preserve trust within the ecosystem and uphold the foundational principles of DAOs.
VeBetterDAO Tokenomics: Overcoming the Pitfalls
The evolution of token distribution among crypto projects and DAOs is shifting towards more complex, multi-tiered models that look to foster true decentralization and tackle issues like Sybil attacks and governance abuse. Tokens are evolving beyond mere assets of monetary value, instead, serving as governance and engagement tools that aim to transfer control to dedicated, long-term users. DAOs stand at the center of this innovation, and VeBetterDAO is no exception. It aims to significantly bolster the framework of its ecosystem through targeted token incentivization and governance strategies. The core of VeBetterDAO's economic model is anchored by two primary tokens, B3TR and VOT3, which are intricately designed to fulfill distinct, yet interrelated roles within the ecosystem. Additionally, VeBetterDAO was launched under the 'fair launch principle,' meaning there were no preallocations, private sales, or team allocations, further illustrating the core principles behind the project.
Roadmap
The launch strategy for VeBetterDAO is structured around three key phases: Pilot Show Alpha (Testnet Take-off), Pilot Show Beta (Mainnet Blitz), and the Go-Live Gala. The initial phase, Pilot Show Alpha, set to commence at the end of February 2024, involves the distribution of B3TR tokens through various means, including airdrops and community engagement activities. This phase serves as a foundational period, allowing users to familiarize themselves with the platform's functionalities while providing feedback for improvements.
The transition to the Mainnet, marked by the Pilot Show Beta phase, is slated for the end of Q2 2024. This phase not only signifies a technical transition but also ensures that tokens earned during the Testnet phase are carried over to the Mainnet. The culmination of these phases leads to the Go-Live Gala, coinciding with the anniversary of the VeChainThor mainnet on June 30th. This final phase introduces a range of new features and functionalities, including token minting, NFT maturity level advancements, and enhancements to the X-2-Earn applications, among others.
B3TR: The Incentive Backbone
B3TR is the cornerstone of the VeBetterDAO, acting as the multifaceted incentive token that underpins the DAO's Treasury Management and serves various critical functions. It is the central mechanism for incentivizing participation, facilitating the monetization for active contributors, and promoting innovative business models within the ecosystem. Furthermore, B3TR plays a pivotal role in sustainability initiatives, offering support for project development, fostering community growth, and enhancing engagement. Notably, it also provides a 1:1 backing for VOT3 tokens, which are integral for governance activities within VeBetterDAO.
B3TR issuances are split among three parties:
● The X-to-Earn Applications Pool (XAP)
● The Voting Participation Pool (VPP)
● The VeBetterDAO Treasury Pool (VTP)
Quadratic Voting and Quadratic Funding will be applied to XAP allocations. Quadratic Voting is an innovative voting system designed to allow participants to distribute their votes across various proposals, enabling a more nuanced expression of preferences compared to traditional one-vote-per-proposal systems. By adopting a quadratic formula for vote allocation, this method aims to level the playing field, reducing the imbalance of voting power by making additional votes progressively more expensive. This cost structure encourages voters to reserve their extra votes for proposals they care passionately about, effectively highlighting the intensity of their preferences.
VOT3: Steering Governance
VOT3 is tailored specifically towards governance, granting token holders the power to influence the decision-making processes of the DAO. Ownership of VOT3 is imperative for engaging in governance events, and it is strategically staked to guide the distribution of newly issued B3TR tokens. A unique feature of VOT3 is its 1:1 exchangeability with B3TR through a dedicated swap pool, designed with mechanisms to prevent any potential manipulation. Users will stake B3TR/VOT3 to allocate tokens to dApps of their choice, in return providing projects needed funding and users a yield for their engagement. The alignment of financial incentives aims to reduce any misalignment or disagreements that typically plague decentralized governance as well as encourage voter participation, an issue that most DAOs have experienced.
Governance
Joining the VeBetterDAO is a straightforward process that empowers anyone holding VOT3 tokens to participate actively in the governance of the platform. This ensures that all members have the opportunity to engage in voting events, contribute to governance discussions, and access the DAO's Treasury, fostering a community that is both inclusive and vibrant.
Upon its launch, VeBetterDAO will operate under a predefined set of governance protocols for the first year, a period deemed critical for assessing the platform's operational integrity and long-term feasibility. This initial Stabilization Period is designed to safeguard against potential exploits, with the VeChain Foundation retaining the authority to halt and resume B3TR token minting if necessary. The Vechain Foundation, tasked with the maintenance and enhancement of the VechainThor protocol, is governed by the Steering Committee, elected every two years by the community through VeVote, a decentralized platform. The Committee, a blend of experts across various fields, guides the Foundation's functional arms, balancing stakeholder interests to foster VechainThor's growth. Following this phase, the power to continue or discontinue such safeguards will transition to the community, which will deliberate on this issue through bi-annual voting events.
Proposal Submission Process
Proposals serve as the foundation of the DAO's operational framework, with the community playing a crucial role in shaping the proposal pipeline. VeBetterDAO will host a dedicated forum for the submission, discussion, and voting on proposals. This forum will not only facilitate transparent dialogue but will also provide a comprehensive dashboard displaying voting outcomes, archival records, and detailed proposal analytics. To advance to the implementation stage, proposals must undergo a rigorous vetting process, beginning with community discussions on the forum, followed by a preliminary 'temperature check,' and culminating in formal on-chain voting.
In the event of disputes arising from governance activities, resolution will be achieved through community-driven voting on pertinent proposals. To bolster the platform's security architecture, VeBetterDAO plans to appoint Security Guardians. These guardians, whose roles and powers will be more clearly defined as the platform evolves, will possess the limited authority to temporarily suspend certain protocol functions or take other emergency measures to ensure system integrity. Such actions, designed to be executed swiftly without procedural delays, will be under the direct oversight of the VeBetterDAO Operator, ensuring a balanced approach to emergency intervention and system transparency.
X-2-Earn, Grants, and More
The VeBetterDAO ecosystem is introducing a novel approach to sustainability and user engagement through its X-2-Earn applications. The "X" in X-2-Earn symbolizes the variable nature of these applications, allowing for a broad spectrum of sustainability-focused activities to be integrated into the earn mechanism. Whether it's planting trees through a 'Plant-2-Earn' model or encouraging physical activity with 'Sweat-2-Earn' dApps, the possibilities are vast and varied. These applications leverage B3TR tokens not only as a reward mechanism to incentivize user participation but also to support a range of other objectives, from fostering innovation among developers to driving marketing efforts and securing sponsorships.
The distribution of B3TR rewards within these X-2-Earn dApps is subject to the discretion of the individual projects, along with the approval of the community, which plays a pivotal role in sanctioning reward proposals via voting. For an X-2-Earn application to align with the VeBetterDAO ecosystem, it must adhere to three core principles: meaningfulness, feasibility, and value creation. Each application must contribute to sustainability efforts in a significant way, possess the capability to accurately record and reward user contributions, and ensure that these contributions offer collective value towards sustainability goals.
A critical aspect of integrating X-2-Earn applications into the VeBetterDAO ecosystem involves a thorough validation and qualification process. VeChain Node holders are at the forefront of this process, acting as both validators and qualifiers for these applications. For an X-2-Earn application to be listed on the VeBetterDAO platform, it must first obtain a minimum approval rating from both Economic and X-Node holders. This engagement occurs through various channels, including X Spaces, community forums, and social media platforms like Discord and Telegram, where projects must actively communicate and collaborate with potential stakeholders to secure weekly B3TR allocations.
The benchmark for a project to achieve listing on the VeBetterDAO platform is a qualification score of 100, as determined by VeChain Nodes. This stringent requirement ensures that only applications with a solid foundation in sustainability, a viable reward mechanism, and a clear value proposition make it onto the platform, thereby maintaining the integrity and purpose of the VeBetterDAO ecosystem. This process not only democratizes the development and integration of X-2-Earn applications but also reinforces the ecosystem's commitment to fostering sustainable practices through innovative blockchain solutions.
VeChain has introduced a new grant program aimed at fostering the development and maturation of X-2-Earn decentralized applications (dApps). The program is structured in a four-step process designed to support projects from initial development through to scaling and securing investment. Initially, projects can receive $100k in grants focused on business and sustainability development. Successful projects then progress to being listed on VeBetterDAO, gaining access to DAO token support along with community and marketing assistance. The third step involves professional business mentorship from BCG, guiding selected projects in their development and scaling efforts. Finally, outstanding projects are given the opportunity to meet with Venture Capital Partners, aiming to secure investment and elevate their platforms to new heights. For more, please see the VeBetterDAO whitepaper.
MaaS
While launching new initiatives to tackle the world’s sustainability problems may be enough for some, vechain hasn’t stopped there. The ambitious protocol has also taken a significant step forward in the NFT marketplace with the introduction of its Marketplace as a Service (MaaS). The innovative platform launched in March 2024 and created a new NFT marketplace that has removed the need for extensive coding or development expertise in order to participate as a user or a builder.
VeChain's MaaS aims to be a gateway to a new era of asset tokenization by facilitating the seamless integration of NFC technology, enabling users to transform tangible goods into tokenized assets, or "phygitals." This capability not only underscores VeChain's ambition to spearhead the tokenization movement but also positions the platform to capitalize on the burgeoning interest in merging physical items with digital tokens.
The hallmark of VeChain's MaaS lies in its user-centric approach, including the removal of transaction fees. Users can swiftly establish and brand their NFT marketplaces tailored to their specific needs, and builders can leverage fee-delegation technologies to pay the transaction fees on behalf of the user. Moreover, through a partnership with Transak, MaaS offers direct fiat transactions for NFT purchases, making the user experience reminiscent of traditional Web2 interfaces.
MaaS is a testament to VeChain's ongoing dedication to simplifying the digital asset landscape. By offering tools that mirror the ease of use and familiarity of Web2 applications, VeChain is not only expanding its ecosystem with MaaS but also reinforcing its vision with recent innovations like VORJ. This coherent strategy enhances the utility and accessibility of digital assets, paving the way for a future where tokenization and digital marketplaces become integral to our digital and physical lives.
Conclusion
VeBetterDAO represents a monumental stride in the integration of blockchain technology with sustainability efforts, underpinned by the innovative and participatory 'X-2-Earn' model. By fostering a robust ecosystem where users are rewarded for their contributions to sustainability, VeBetterDAO sets a new precedent for the role of digital platforms in environmental stewardship. The collaboration with the Boston Consulting Group and the introduction of a nuanced tokenomics framework underscore the project's commitment to not only advancing blockchain technology but also ensuring its alignment with sustainable development goals.
As VeBetterDAO progresses through its phased launch, culminating in the Go-Live Gala, it aims to democratize the potential for sustainable change and offer a blueprint for future initiatives at the intersection of blockchain and sustainability. Through strategic partnerships, innovative governance, and a focus on meaningful, sustainable actions, VeBetterDAO is paving the way for a future where blockchain technology plays a central role in global sustainability efforts, offering a model for how technology can be harnessed to foster a more sustainable and equitable world.
Disclaimer: This report was commissioned by the VeChain Foundation. This research report is exactly that — a research report. It is not intended to serve as financial advice, nor should you blindly assume that any of the information is accurate without confirming through your own research. Bitcoin, cryptocurrencies, and other digital assets are incredibly risky and nothing in this report should be considered an endorsement to buy or sell any asset. Never invest more than you are willing to lose and understand the risk that you are taking. Do your own research. All information in this report is for educational purposes only and should not be the basis for any investment decisions that you make.
Intro
Over the last few years, one of the driving narratives in the crypto world is how the blockchain world will intertwine with the traditional financial space. Recent developments like the BTC ETF and Blackrock’s tokenization efforts are beginning to shed light on that narrative. However, another aspect that some chains believe is even more important is how blockchains will coalesce with the physical world and individual humans. Vechain and its recent emphasis on using blockchain to incentivize real-world sustainability efforts are one shining example in this narrative. With the Vechain ecosystem, VeBetterDAO, accompanied by its own whitepaper, has emerged as the latest development, aiming to harmonize sustainability initiatives with the decentralized and autonomous mechanisms of blockchain.
This novel approach, underpinned by the decentralized autonomous organization (DAO) structure, revolutionizes user engagement by leveraging the 'X-2-Earn' model to incentivize sustainable actions. Rooted in the rich legacy of blockchain-based sustainability efforts, such as the collaborative endeavors of DNV and VeChain, VeBetterDAO stands on the shoulders of giants. It embodies the culmination of VeChain Foundation’s rigorous technical advancements, including the introduction of platforms like VORJ, Marketplace as a Service, and its first enterprise user, Gresini Racing, VeWorld, a new SDK, new dApp kit and revamped developer documentation, all aiming to bolster this sustainability-centric initiative. The collaboration with Boston Consulting Group (BCG) signifies a strategic alignment with global sustainability and ESG consulting leadership, ensuring that VeBetterDAO's technological innovations are firmly anchored within the broader sustainability and corporate responsibility discourse. This initiative not only aims to redefine the utilization of digital platforms in fostering sustainability but also seeks to democratize sustainable change, enabling widespread community participation in global sustainability efforts.
VeBetterDAO Gresini Racing Web3 Marketplace
In 2022, Vechain joined forces with Boston Consulting Group (BCG) to spearhead advancements in sustainable business practices. The collaboration formally entered a new phase at an event called ‘The HiVe’, and the launch of the co-developed ‘Web3 for Better’ whitepaper, which outlined this new vision and strategy for integrating sustainability and Web3. With an acute awareness of the need for sustainability at the heart of corporate strategies, this collaboration aims to harness Vechain’s cutting-edge blockchain technology solutions and BCG’s vast experience in management consulting to tackle worldwide environmental issues. This partnership signifies a dedication to not only achieving business success but also to ensuring the prosperity of upcoming generations and the preservation of the planet's ecosystem.
As the blockchain space evolves, the VeBetterDAO represents a pioneering approach to integrating sustainability with blockchain technology. The platform is twofold: a dApp ecosystem anchored in a decentralized autonomous organization (DAO). It pioneers the incentivization of user engagement through a diverse range of applications, notably categorized under the 'X-2-Earn' model. This innovative model, covered in previous reports, opens a gateway for applications focused on enhancing sustainability.
Historically, platforms such as the DNV x VeChain’s Low Carbon Ecosystem have set a precedent for such initiatives, with significant applications in sectors like electric vehicle manufacturing, as exemplified by partnerships with industry giants like BYD, China's leading EV manufacturer. The VeBetterDAO is the product of extensive technical development efforts by the VeChain Foundation, which has introduced an array of tools and platforms, such as VORJ, VeWorld, and a new SDK, to support this initiative.
A key element in the development and conceptualization of the VeBetterDAO has been its collaboration with the Boston Consulting Group (BCG), a global leader in sustainability and ESG consulting. This partnership underscores the project's commitment to grounding its technological innovations within the broader context of sustainable development and corporate responsibility.
The VeBetterDAO is positioned to redefine the role of digital platforms in promoting sustainability. Through strategic alliances with enterprise partners and Web3 developers, the project aims to launch a suite of applications that not only engage users but also offer tangible rewards for participation. This approach effectively democratizes the potential for sustainable change, empowering individuals to contribute to global sustainability efforts.
Why a DAO?
At the heart of the concept, a DAO is fundamentally a software construct, meticulously designed to encapsulate a set of rules and protocols that govern decision-making and resource allocation within the organization. These protocols are meticulously expressed within smart contracts and autonomously executed on a blockchain platform, thereby facilitating a collaborative environment wherein individuals globally can contribute and partake in the organizational decision-making processes.
Key features of DAOs include:
- Autonomy: DAOs' autonomy is primarily driven by the pre-established rules embedded within smart contracts. Automating these rules negates the necessity for intermediaries or centralized authority, ensuring that the organization's operations are transparent and predictable.
- Decentralization: By dispersing decision-making authority among its participants, usually through a voting mechanism, DAOs democratize governance. This model empowers stakeholders to collectively navigate the organization's trajectory, encompassing critical aspects such as resource distribution, project funding, and protocol enhancements.
- Transparency: A DAO's inherent transparency ensures that all operations and transactions are openly observable on the blockchain. Such clarity in operations cultivates trust and accountability amongst participants, enabling any observer to scrutinize the actions and outcomes transparently.
- Token-based Participation: A distinctive feature of DAOs is the issuance of tokens that symbolize ownership or voting rights. This approach allows participants to wield influence over decision-making processes. Token holders are entitled to propose, vote on initiatives, sculpt the organization's policies, and, in some instances, reap the rewards or dividends proportional to their contributions.
- Meritocracy and Incentives: DAOs are structured to incentivize participants in alignment with the organization's objectives, thereby fostering active engagement, innovation, and value creation. These incentives may manifest as tokens, enhanced governance authority, or a fraction of the organization’s earnings, among other forms.
Since their inception, DAOs have been deployed for a myriad of applications, ranging from decentralized investment consortia to community governance platforms, decentralized venture capital, and frameworks for collective decision-making. It is crucial to recognize, however, that the concept of DAOs is in a phase of continuous evolution. The technological underpinnings, governance models, and legal contexts that encapsulate DAOs are under ongoing development and refinement, underscoring the dynamic nature of this revolutionary organizational structure.
Traditional DAO Obstacles
Despite DAO’s obvious, theoretical advantages, several pivotal issues still remain, highlighting the nuanced challenges these entities face. A primary concern is the absence of legal recognition for DAOs, rendering individual members potentially liable for collective decisions, as evidenced by the SEC's legal action against LBRY DAO. Furthermore, developers crafting the smart contracts that underpin (typical) DAOs find themselves in a precarious legal gray area, where they could be held accountable for how others utilize their creations, blurring the lines of responsibility and raising questions about the legal implications of their work.
Additionally, DAOs typically rely on a collection of trusted contractors and token holders to manage risk and implement changes, which can limit scalability and deviate from the ideal of a trustless, autonomous system. The distribution of governance tokens in a typical DAO, such as AAVE or UNI, plays a pivotal role in these dynamics, often leading to centralization when tokens are unevenly allocated to core developers or early investors, instead of a broader user base. This centralization not only contradicts the principle of decentralization but also introduces security vulnerabilities.
Another hurdle is achieving widespread participation and engagement from stakeholders, requiring efforts to educate and incentivize diverse groups for representative governance and to prevent a few from dominating. The threat of Sybil attacks, where individuals create multiple identities to sway decisions, underscores the need for robust participant authentication while balancing privacy concerns.
The governance model, which grants the community direct control over vital protocol aspects, can inadvertently expose the system to attacks. The Beanstalk exploit, which led to a loss of $182 million, underscores the risks tied to governance tokens and the challenges in balancing decentralization with security.
The intricacies of managing collective investments and the implications of native tokens introduce additional layers of complexity and potential tax implications. Moreover, the competitive landscape for DAOs is varied, with some embracing full decentralization and others leaning towards more traditional organizational structures, which could confer competitive advantages.
Efficiency in decision-making is crucial, as the decentralized nature of blockchain can lead to slow and resource-intensive consensus processes. Solutions, including improved voting mechanisms, delegation systems, and dispute resolution, are vital for streamlining governance. The management of network upgrades and forks presents another layer of complexity, requiring careful coordination to avoid disruptions and maintain community cohesion. Furthermore, navigating the maze of legal and regulatory compliance across different jurisdictions adds to the governance challenge, necessitating a delicate balance between adhering to laws and preserving the decentralized ethos.
Education and awareness around blockchain governance are essential for stakeholder participation, pointing to a need for better resources and literacy efforts in the space. Addressing these challenges is not straightforward and requires continuous research, technological innovation, and collective effort from the blockchain community to refine and adapt governance models for the future.
Ethical considerations are paramount as well, especially regarding the tactics employed within DAO communities, such as public influence campaigns, psychological strategies, and manipulative practices. While activism within these entities can serve as a mechanism for accountability, it necessitates a transparent and ethical approach to preserve trust within the ecosystem and uphold the foundational principles of DAOs.
VeBetterDAO Tokenomics: Overcoming the Pitfalls
The evolution of token distribution among crypto projects and DAOs is shifting towards more complex, multi-tiered models that look to foster true decentralization and tackle issues like Sybil attacks and governance abuse. Tokens are evolving beyond mere assets of monetary value, instead, serving as governance and engagement tools that aim to transfer control to dedicated, long-term users. DAOs stand at the center of this innovation, and VeBetterDAO is no exception. It aims to significantly bolster the framework of its ecosystem through targeted token incentivization and governance strategies. The core of VeBetterDAO's economic model is anchored by two primary tokens, B3TR and VOT3, which are intricately designed to fulfill distinct, yet interrelated roles within the ecosystem. Additionally, VeBetterDAO was launched under the 'fair launch principle,' meaning there were no preallocations, private sales, or team allocations, further illustrating the core principles behind the project.
Roadmap
The launch strategy for VeBetterDAO is structured around three key phases: Pilot Show Alpha (Testnet Take-off), Pilot Show Beta (Mainnet Blitz), and the Go-Live Gala. The initial phase, Pilot Show Alpha, set to commence at the end of February 2024, involves the distribution of B3TR tokens through various means, including airdrops and community engagement activities. This phase serves as a foundational period, allowing users to familiarize themselves with the platform's functionalities while providing feedback for improvements.
The transition to the Mainnet, marked by the Pilot Show Beta phase, is slated for the end of Q2 2024. This phase not only signifies a technical transition but also ensures that tokens earned during the Testnet phase are carried over to the Mainnet. The culmination of these phases leads to the Go-Live Gala, coinciding with the anniversary of the VeChainThor mainnet on June 30th. This final phase introduces a range of new features and functionalities, including token minting, NFT maturity level advancements, and enhancements to the X-2-Earn applications, among others.
B3TR: The Incentive Backbone
B3TR is the cornerstone of the VeBetterDAO, acting as the multifaceted incentive token that underpins the DAO's Treasury Management and serves various critical functions. It is the central mechanism for incentivizing participation, facilitating the monetization for active contributors, and promoting innovative business models within the ecosystem. Furthermore, B3TR plays a pivotal role in sustainability initiatives, offering support for project development, fostering community growth, and enhancing engagement. Notably, it also provides a 1:1 backing for VOT3 tokens, which are integral for governance activities within VeBetterDAO.
B3TR issuances are split among three parties:
● The X-to-Earn Applications Pool (XAP)
● The Voting Participation Pool (VPP)
● The VeBetterDAO Treasury Pool (VTP)
Quadratic Voting and Quadratic Funding will be applied to XAP allocations. Quadratic Voting is an innovative voting system designed to allow participants to distribute their votes across various proposals, enabling a more nuanced expression of preferences compared to traditional one-vote-per-proposal systems. By adopting a quadratic formula for vote allocation, this method aims to level the playing field, reducing the imbalance of voting power by making additional votes progressively more expensive. This cost structure encourages voters to reserve their extra votes for proposals they care passionately about, effectively highlighting the intensity of their preferences.
VOT3: Steering Governance
VOT3 is tailored specifically towards governance, granting token holders the power to influence the decision-making processes of the DAO. Ownership of VOT3 is imperative for engaging in governance events, and it is strategically staked to guide the distribution of newly issued B3TR tokens. A unique feature of VOT3 is its 1:1 exchangeability with B3TR through a dedicated swap pool, designed with mechanisms to prevent any potential manipulation. Users will stake B3TR/VOT3 to allocate tokens to dApps of their choice, in return providing projects needed funding and users a yield for their engagement. The alignment of financial incentives aims to reduce any misalignment or disagreements that typically plague decentralized governance as well as encourage voter participation, an issue that most DAOs have experienced.
Governance
Joining the VeBetterDAO is a straightforward process that empowers anyone holding VOT3 tokens to participate actively in the governance of the platform. This ensures that all members have the opportunity to engage in voting events, contribute to governance discussions, and access the DAO's Treasury, fostering a community that is both inclusive and vibrant.
Upon its launch, VeBetterDAO will operate under a predefined set of governance protocols for the first year, a period deemed critical for assessing the platform's operational integrity and long-term feasibility. This initial Stabilization Period is designed to safeguard against potential exploits, with the VeChain Foundation retaining the authority to halt and resume B3TR token minting if necessary. The Vechain Foundation, tasked with the maintenance and enhancement of the VechainThor protocol, is governed by the Steering Committee, elected every two years by the community through VeVote, a decentralized platform. The Committee, a blend of experts across various fields, guides the Foundation's functional arms, balancing stakeholder interests to foster VechainThor's growth. Following this phase, the power to continue or discontinue such safeguards will transition to the community, which will deliberate on this issue through bi-annual voting events.
Proposal Submission Process
Proposals serve as the foundation of the DAO's operational framework, with the community playing a crucial role in shaping the proposal pipeline. VeBetterDAO will host a dedicated forum for the submission, discussion, and voting on proposals. This forum will not only facilitate transparent dialogue but will also provide a comprehensive dashboard displaying voting outcomes, archival records, and detailed proposal analytics. To advance to the implementation stage, proposals must undergo a rigorous vetting process, beginning with community discussions on the forum, followed by a preliminary 'temperature check,' and culminating in formal on-chain voting.
In the event of disputes arising from governance activities, resolution will be achieved through community-driven voting on pertinent proposals. To bolster the platform's security architecture, VeBetterDAO plans to appoint Security Guardians. These guardians, whose roles and powers will be more clearly defined as the platform evolves, will possess the limited authority to temporarily suspend certain protocol functions or take other emergency measures to ensure system integrity. Such actions, designed to be executed swiftly without procedural delays, will be under the direct oversight of the VeBetterDAO Operator, ensuring a balanced approach to emergency intervention and system transparency.
X-2-Earn, Grants, and More
The VeBetterDAO ecosystem is introducing a novel approach to sustainability and user engagement through its X-2-Earn applications. The "X" in X-2-Earn symbolizes the variable nature of these applications, allowing for a broad spectrum of sustainability-focused activities to be integrated into the earn mechanism. Whether it's planting trees through a 'Plant-2-Earn' model or encouraging physical activity with 'Sweat-2-Earn' dApps, the possibilities are vast and varied. These applications leverage B3TR tokens not only as a reward mechanism to incentivize user participation but also to support a range of other objectives, from fostering innovation among developers to driving marketing efforts and securing sponsorships.
The distribution of B3TR rewards within these X-2-Earn dApps is subject to the discretion of the individual projects, along with the approval of the community, which plays a pivotal role in sanctioning reward proposals via voting. For an X-2-Earn application to align with the VeBetterDAO ecosystem, it must adhere to three core principles: meaningfulness, feasibility, and value creation. Each application must contribute to sustainability efforts in a significant way, possess the capability to accurately record and reward user contributions, and ensure that these contributions offer collective value towards sustainability goals.
A critical aspect of integrating X-2-Earn applications into the VeBetterDAO ecosystem involves a thorough validation and qualification process. VeChain Node holders are at the forefront of this process, acting as both validators and qualifiers for these applications. For an X-2-Earn application to be listed on the VeBetterDAO platform, it must first obtain a minimum approval rating from both Economic and X-Node holders. This engagement occurs through various channels, including X Spaces, community forums, and social media platforms like Discord and Telegram, where projects must actively communicate and collaborate with potential stakeholders to secure weekly B3TR allocations.
The benchmark for a project to achieve listing on the VeBetterDAO platform is a qualification score of 100, as determined by VeChain Nodes. This stringent requirement ensures that only applications with a solid foundation in sustainability, a viable reward mechanism, and a clear value proposition make it onto the platform, thereby maintaining the integrity and purpose of the VeBetterDAO ecosystem. This process not only democratizes the development and integration of X-2-Earn applications but also reinforces the ecosystem's commitment to fostering sustainable practices through innovative blockchain solutions.
VeChain has introduced a new grant program aimed at fostering the development and maturation of X-2-Earn decentralized applications (dApps). The program is structured in a four-step process designed to support projects from initial development through to scaling and securing investment. Initially, projects can receive $100k in grants focused on business and sustainability development. Successful projects then progress to being listed on VeBetterDAO, gaining access to DAO token support along with community and marketing assistance. The third step involves professional business mentorship from BCG, guiding selected projects in their development and scaling efforts. Finally, outstanding projects are given the opportunity to meet with Venture Capital Partners, aiming to secure investment and elevate their platforms to new heights. For more, please see the VeBetterDAO whitepaper.
MaaS
While launching new initiatives to tackle the world’s sustainability problems may be enough for some, vechain hasn’t stopped there. The ambitious protocol has also taken a significant step forward in the NFT marketplace with the introduction of its Marketplace as a Service (MaaS). The innovative platform launched in March 2024 and created a new NFT marketplace that has removed the need for extensive coding or development expertise in order to participate as a user or a builder.
VeChain's MaaS aims to be a gateway to a new era of asset tokenization by facilitating the seamless integration of NFC technology, enabling users to transform tangible goods into tokenized assets, or "phygitals." This capability not only underscores VeChain's ambition to spearhead the tokenization movement but also positions the platform to capitalize on the burgeoning interest in merging physical items with digital tokens.
The hallmark of VeChain's MaaS lies in its user-centric approach, including the removal of transaction fees. Users can swiftly establish and brand their NFT marketplaces tailored to their specific needs, and builders can leverage fee-delegation technologies to pay the transaction fees on behalf of the user. Moreover, through a partnership with Transak, MaaS offers direct fiat transactions for NFT purchases, making the user experience reminiscent of traditional Web2 interfaces.
MaaS is a testament to VeChain's ongoing dedication to simplifying the digital asset landscape. By offering tools that mirror the ease of use and familiarity of Web2 applications, VeChain is not only expanding its ecosystem with MaaS but also reinforcing its vision with recent innovations like VORJ. This coherent strategy enhances the utility and accessibility of digital assets, paving the way for a future where tokenization and digital marketplaces become integral to our digital and physical lives.
Conclusion
VeBetterDAO represents a monumental stride in the integration of blockchain technology with sustainability efforts, underpinned by the innovative and participatory 'X-2-Earn' model. By fostering a robust ecosystem where users are rewarded for their contributions to sustainability, VeBetterDAO sets a new precedent for the role of digital platforms in environmental stewardship. The collaboration with the Boston Consulting Group and the introduction of a nuanced tokenomics framework underscore the project's commitment to not only advancing blockchain technology but also ensuring its alignment with sustainable development goals.
As VeBetterDAO progresses through its phased launch, culminating in the Go-Live Gala, it aims to democratize the potential for sustainable change and offer a blueprint for future initiatives at the intersection of blockchain and sustainability. Through strategic partnerships, innovative governance, and a focus on meaningful, sustainable actions, VeBetterDAO is paving the way for a future where blockchain technology plays a central role in global sustainability efforts, offering a model for how technology can be harnessed to foster a more sustainable and equitable world.
Disclaimer: This report was commissioned by the VeChain Foundation. This research report is exactly that — a research report. It is not intended to serve as financial advice, nor should you blindly assume that any of the information is accurate without confirming through your own research. Bitcoin, cryptocurrencies, and other digital assets are incredibly risky and nothing in this report should be considered an endorsement to buy or sell any asset. Never invest more than you are willing to lose and understand the risk that you are taking. Do your own research. All information in this report is for educational purposes only and should not be the basis for any investment decisions that you make.
