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DeFi Money Market (DMM): DMG Governance Token We first want to give a large thank you to our community for supporting us in the development of the DeFi Money Market (DMM) ecosystem. There have been many new members in the community that have recently joined us in our telegram and discord channels. The progress and enthusiasm for the work that we have committed would not be possible without you all. This blog post is an in-depth analysis of the DMM DAO’s governance structure and how stakeholders will oversee and direct the DMM ecosystem. Additionally, we will look at the utility of the DMG governance token and how it is the central piece that enables the gradual decentralization of DMM by aligning stakeholders’ interest with native skin in the game. DMG is the key to ensuring the DMM DAO is as successful as possible. DeFi Money Market Overview The DeFi Money Market (DMM) provides a trust-minimized, transparent, and permissionless environment on the Ethereum blockchain that empowers users across the world to once again earn a positive yield through digital assets backed by a basket of interest-generating real-world assets brought on-chain into the DeFi space. DMM operates as an ecosystem where real-asset owners can tap Ethereum digital asset owners for funding, which also allows digital asset lenders to gain exposure to uncorrelated passive income. This enables real world asset owners to engage in collateralized borrowing at more competitive rates with a global permissionless reach. In the DMM Ecosystem, both the off-chain assets backing mTokens and the interest revenue generated from these assets are overcollateralized, thus protecting depositors. Being backed by real world assets also means DMM mTokens can offer users a much more stable and reliable ROI on their deposited funds (currently DAI, USDC, ETH) at a stable 6.25% APY. This is in contrast to many other on-chain money markets which offer variable interest rates driven by cryptocurrency leverage traders. Transparency into the off-chain assets backing mTokens and their valuations can be found on-chain and on the DMM Explorer. Additionally, our collaboration and usage of Chainlink’s decentralized oracles adds an extra layer of security and trust to the ecosystem by writing essential data on-chain that details the ecosystem’s valuation and total active collateralization. Overview of DMM DAO Governance Token (DMG) The DeFi Money Market (DMM) DAO governance token, DMG, is the tool through which the community governs and grows the DMM ecosystem and the underlying protocol. As we look to build a vibrant global community, DMG is a critical component that will engender broad participation and mitigate centralized governance risk. Specifically, DMG effectuates governance of the ecosystem via the DMM DAO, which has control over the Ethereum smart contracts and its adjacent assets. Ownership of DMG represents the right to govern the parameters of the DMM Protocol, a claim on the excess revenue generated from the DMM ecosystem, as well as governance over the ability and decisions surrounding the introduction of new assets to the ecosystem in regards to both asset type and asset location. The DMG token is a fork of Compound’s COMP governance token (featuring native delegation and vote weighting) with added capability such as meta-transaction support and a native burn function. DMG Supply Distribution The DeFi Money Market DAO will be composed of a total of 250,000,000 DMG Governance Tokens. The distribution of the total DMG supply is as follows: 30% will be sold in multiple different Public Token Sales over time. 30% will be reserved to incentivize ecosystem developers, partners, and integrations with other protocols to ensure DMM is a vibrant growing and decentralized ecosystem. 40% will go to the DMM Foundation for continued development, support, and other general corporate purposes. 60% of the total supply (150M DMG) has been deposited into timelocked smart contracts with varying vesting periods. The addresses for these contracts can be found on our main GitHub page here. The Foundation’s 40% allocation of the supply (100M DMG) is locked up until November 15th, 2020 which then begins to vest equal amounts of DMG every Ethereum block until a year later on November 15th, 2021 when the last amount unlocks. 10% of the supply (25M DMG) from the incentives allocation and 10% of supply (25M DMG) from the sales allocation are both locked until November 15th 2020 when the full amount releases. This means currently 40% of the supply (100M) is not locked up. Once unlocked, a portion of these DMG funds can be used to grow the ecosystem or can be deposited back into another timelocked smart contract for a longer period of time. These contracts will greatly reduce the liquid supply of DMG and will limit the DMM Foundation’s voting power to ensure the community has a greater say in the DMM DAO. Initially 10% of the supply (25M) has been allocated for the first private + public sale. The private sale has been a major success, while the public sale will be taking place June 22nd as an Initial DEX Offering (IDO) across two decentralized exchanges following a quasi-bonding curve structure. The first sale location will be , which is powered by Dolomite (an orderbook DEX using the Loopring protocol) with a frontend forked from Uniswap v1. The second sale location ongoing at the same time will be mesa.eth.link, which is powered by the Gnosis Protocol (a ring-trade DEX) with a frontend governed by the DXdao. The public sale will be available from 6/22/2020 through 7/22/2020 or until all tokens available have been sold. More information on the sale structure will be released in an upcoming blogpost as the public sale nears. In summary, 10% of the supply (25M DMG) will be circulating, 40% of the supply will be unlocked/liquid (100M DMG), and 60% of the supply is locked up in timelock smart contracts (150M). After the public sale completes, we will be using some of the funds raised and a share of our DMG to help bootstrap liquidity pools on DEXs including but not limited to Uniswap and Dolomite. This creates secondary markets for DMG to enable users to enter the DMM DAO without incurring a large amount of slippage. The circulating supply will rise over time as provide liquidity and we will keep the community up to date on this. Use of Funds The focused development of the protocol and the DMM ecosystem (DMME) are top priorities. To this end, funds raised will be used for protocol development, marketing, grants, business development, funding loans for the introduction of additional asset classes into the ecosystem, operations, seeding the secondary market on Ethereum DEXs, legal, reserves and other general corporate purposes. As a developing ecosystem, the proposed use of funds is subject to change based on new challenges and opportunities identified as the ecosystem matures. DMM DAO Revenue and DMG Token Growth Model The current revenue model is quite straightforward and is composed of four main areas: Excess interest revenue Token burns, which could be done through excess interest revenue or via origination fees Voting and staking for asset introduction, which is in the process of being decentralized and should result in a significant number of tokens being moved away from the liquid supply If an individual or a group owns a block of DMG and reserves Principal or Affiliate membership to introduce assets into the DMME, they will also generate asset introduction or origination fees. Like some of the other best token projects in the industry, we anticipate the DAO making minor tweaks to the token’s growth and revenue model as time progresses and more information about the protocol’s usage is obtained. Revenue from Overcollateralization of Interest Income Streams Further, as the DMME is overcollateralized — with real-assets yielding more than payments due to mAsset holders — the DMM DAO is the recipient of a positive income stream that can be used to fund further loans, capitalize related assets, burn DMG or otherwise grow the ecosystem. The DMM DAO is unique in that it is one of the few DAOs that is already producing revenue and has a straightforward revenue model that grows as DMM’s AUM grows. There is currently $8.5M in car equity loans backing all current mTokens, visible on the DMM swap app. As all the assets introduced to the ecosystem are overcollateralized on an income production basis (as the DMM currently generates 6.25% interest for mTokens holders while the underlying assets generate in total between 8% — 12% interest, there is a constant generation of additional income), these excess income streams assure that 1) That payments of the 6.25% to depositors are made and 2) Excess amounts accrue to the DMM DAO. While still in its infancy, to date the DMM DAO has generated approximately 5.5% annualized revenue on an asset based basis. Just in the month of April alone, circulating mTokens grew 180% to $227k worth of user-deposited funds. Additionally to date, there have been over $670k worth of mTokens purchased in total. Revenue through rights to governance over asset introduction A certain percentage of DMG tokens are required to introduce assets into the DMME (to assure that all DMG holders interests are aligned). The first few test assets are being developed by partners working directly with the DMM Foundation. Some of these assets can include real estate, aviation, and construction equipment. More details can be found in our Chainlink article. Upon the issuance and sale of DMG, we will be rolling out over the next 12 months the fully decentralized onboarding of assets into the DMME. Below we list a high level view on how we envision this to work. While not definitive, we look forward to working with DMG holders and the community to create a unique system that can be scalable on a global basis. Revenue from % of Origination or Asset Introduction Fees for Principal and Affiliate Members: Principal or Affiliate Members (see full information on how this operates below) will contribute 5% of the Origination or Asset Introduction Fees charged to DMG holders on a pro rata basis. DMM DAO Uses of Revenue Once the DMM DAO vote reaches a threshold agreed upon by the DMG holders, the DAO may elect to purchase DMG tokens off the open market to burn them, increasing token demand and lowering the supply available. Token burns will be tracked on a governance dashboard designed to provide transparency into the revenue the DMM DAO engages in and generates. As development, marketing, and maintenance becomes increasingly decentralized, we anticipate a portion of the DAO’s revenue will be used to pay for future protocol work and development. DMM Protocol — Greater Financial Inclusion & Democratization of Access to Capital DMM DAO looks to leverage the benefits of blockchain to provide small and medium enterprises (SME) globally similar benefits in access to capital that large enterprises have always enjoyed. Large enterprises are able to tap into traditional capital markets and currently have access to ultra low rates. With this said, access to reasonably priced capital has been a routine challenge to small and medium enterprises (SME) globally. In a recent study by the OECD, SME interest rates were highest in Brazil (25%), followed by a number of other mid income economies. Developing nations continued to have elevated rates of interest and limited opportunities to have access to capital. New Zealand was the only high-income economy with interest rates close to 10%. As SMEs account for nine out of ten businesses globally having access to capital is a key requirement for global growth and development. SMEs provide more than 60% of overall employment world-wide and roughly 80% of jobs in the developed world. SMEs contribute approximately 50% of global Gross Value Added (GVA), and an even larger percentage in developed countries. The total unmet demand for credit by all formal and informal SMEs is estimated to total $3.5 TN (equivalent to 30% of all formal SME credit outstanding). The International Finance Corporation (IFC) estimates the formal SME credit gap to be $1.5 TN globally with a third of it in high-income Organization for Economic Co-operation and Development (OECD) states and two thirds in emerging markets and developing countries. Restricted access to finance was cited by SMEs worldwide as their greatest constraint on growth. While most SME will not be focused on directly introducing assets into the DMME (although this is not prohibited), we would prefer to work locally with someone who can enable access to reasonably priced capital. We are encouraging partners to use the DMM Protocol which can help solve a critical infrastructure need in the financing of SME. This structure enables individuals, institutions or others to act as a conduit to the DMME by acting as Principal or Affiliate members to introduce assets and garner new revenue flows. DMM DAO believes by making asset introduction simple and through standardized guidelines is the key to promoting access to reasonably priced capital globally. Overview of Asset Introduction into the DMME Outside of the governance rights, DMG has two other essential functions. As the DMME is looking to introduce various real world asset classes across different geographies, to assure that those are attractive assets for the community, a predetermined amount of DMG must be held by those wishing to introduce assets into the ecosystem. This assures all ecosystem participants are aligned to maintain the healthy operation of DMME. The governance of asset introduction is done in 2 ways: It is broken down by geography on the country level with certain requirements for DMG holdings (through direct ownership as well as staking). Within the country there are two types of DMG statuses that can introduce assets, DMG Principal Members and DMG Affiliate Members. We will discuss in more detail below but the idea is to develop a robust global ecosystem that uses the DMM Protocol to assure all interests are aligned and that the DMME has a healthy and vibrant ecosystem. To introduce assets, there is a required percentage of DMG tokens which must be owned and a secondary percentage of DMG tokens that must be staked. Assets can be made verifiable on-chain uploading a hash of the IPFS hosted documents and/or by utilizing an asset-verification scheme where Chainlink oracles attest to asset ownership. Principal and Affiliate Country Members have the right to charge an origination or asset introduction fee to do the onboarding of assets, while a portion is shared with all DMG holders for introduction of assets. They also have the ability to charge consulting fees or other items for asset introduction but this is left to those holders to determine and not within the venue nor scope of the DMME. The percentage required of DMG owned and DMG Staked varies based on the size of the market economy and is done on a per country level. DMG governance will work at scale by dividing the global economy first by size and then by country. This is done using the publicly available and quarterly updated data from the World Economic Outlook Database which is created as part of the International Monetary Fund. The most recent full detailed World Economic Outlook Database report can be seen here. As we believe it is likely the larger economies will be the initial contributors of a greater quantity of assets, we feel it is therefore logical that a higher level of DMG ownership should be required to introduce assets. We envision and plan to strive for local initiatives to take place at any country level organically as we believe the financial inclusion aspect of the DMME is to make reasonably priced capital more readily available on a global scale to those that can introduce assets that comply with the DAO’s key requirements. Initially the 5 Country Zones will be broken down as follows, which are further broken up into two classes of Asset Introduction Members: Principal Members and Affiliate Members (both limited per country). Reserving Principal or Affiliate Membership Country Blocks: The DMG governance portal will allow for any and all DMG holders to cooperate to reserve specific country blocks. Initially the requirements to reserve this will be lower but will be increased as time and scale of the system evolves and grows. Principal members receive 0.5% derived from the income production of the underlying assets, while Affiliates receive 0.25% derived income payment production. Essentially, 0.75% is garnered as a benefit in addition to origination or other fees. These amounts are paid in the DMG governance token. Origination Fees for Principal and Affiliate Members: By owning a specific country block, you have the right to introduce assets (provided you follow the framework and guidelines established by the DMM DAO) as well as charge origination fees to SMEs who wish to participate in the DMME. Origination Fees are paid in DMG and are set through mutual agreement between the Principal or Affiliate Members and those wishing to introduce assets (the DMM DAO does not take a role in setting these fees). All fees are paid in DMG, with a portion burned, and are locked into a contract. Upon each monthly payment from the servicer, these payments associated with the underlying assets are then automatically released to Principal or Affiliate members. Blocks and Block Trading: While not possible at launch, after blocks are reserved, we envision a market will develop for the trading of these blocks between current DMG holders, Block Holders, Financial Institutions, Governments, or anyone who has interest in developing the DMME globally or in their specific country. These blocks will be freely available to trade in real time through the governance platform. In the worst case scenario, DAO participants can override and redistribute block ownership from entities who are not providing value to parties better suited for such a role. Volume of Asset Introduction: In the early stages of the ecosystem, there will be no volume of Asset Introduction qualifications for those who are Principal or Affiliate Members. However, with time it is envisioned that much like the requirements to stake a certain percentage of DMG, Principal and Affiliate Members will need to produce adequate volume of asset introduction to assure the system is growing. These guidelines will be set out much like the underwriting guidelines by the DMM DAO with the main purpose being that no Member is able to “lock up a market” by never introducing assets in a meaningful way. Selection of Real World Assets in the DMME The DMM Protocol is a global decentralized protocol for the introduction of revenue generating real world assets in a permissionless and fully decentralized protocol to enable users to earn interest on any Ethereum digital asset. While the first assets introduced by the DMM Foundation have been based in the U.S. the team envisions the DMM Protocol to be used on a global basis acting as the universal on-chain <-> off-chain bridge for any real world asset. It is in this sense we believe the DMM Protocol can have a substantial and sustained impact on financial inclusion making access to capital and overall capital costs more efficient. We believe that asset selection is key in enabling the ecosystem to function properly as not all assets are appropriate for introduction to the DMME. To review, in order to be considered for introduction into the DMME, assets must have the following additional and essential attributes: It earns consistent interest. It is backed by real-world assets that generate income, which allows the interest to be paid. The backing of the assets and its valuation is made transparently available on-chain. The real-world assets backing mTokens are greater in value than mTokens issued. Income generated by the assets is greater than the APY paid to mToken holders (income generated is greater than payments due). For more information on this subject, please consult our whitepaper. We believe the overcollateralization, diversification, and consistency in interest rates makes the DMM a compelling addition to the Ethereum ecosystem. All of these points are important distinctions, as unlike traditional Money Market Accounts, DeFi Money Market Accounts are not backed by the Federal Deposit Insurance (FDIC) or other centralized government entities. The DeFi Money Markets are based on the total transparency and view into the verifiable assets, not faith in the sovereign centralized government systems. Furthermore, there are no minimums so anyone can start earning interest on as little as $1. DMM DAO Partners and Future DMM has and will continue to work with the DXdao, a DeFi-focused DAO, in crafting the structure and overall governance of the DMM DAO to utilize and implement best practices in DAO governance. The DXdao was granted a 2% allocation of DMG tokens, and is composed of over 400 stakeholders that control Ethereum protocols and related assets, a treasury of Ether and tokens, and oversees multiple different DeFi projects including Mix.eth, Omen.eth, and Mesa.eth. Through the governance structure we have laid out above, it is our goal that the DMG governance token and community DAO will enable DMM to become a highly decentralized protocol removing any single point of failure. We anticipate that changes and fine-tuning to this structure will be required and we are open to any and all feedback you may have as DMM is a community driven project first and foremost. By enabling permissionless access to a stable yield backed by revenue generating real world assets, we envision a world where your geolocation makes no difference to the ability to secure your financial freedom or grow your business. About DMM DeFi Money Market (DMM) is an ecosystem built on the Ethereum blockchain that bridges interest-generating real world assets into the Decentralized Finance (DeFi) ecosystem in a transparent, trust-minimized, overcollateralized, and permissionless manner.

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Fero

@Fero • 4 Years Ago

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DeFi Money Market (DMM): DMG Governance Token We first want to give a large thank you to our community for supporting us in the development of the DeFi Money Market (DMM) ecosystem. There have been many new members in the community that have recently joined us in our telegram and discord channels. The progress and enthusiasm for the work that we have committed would not be possible without you all. This blog post is an in-depth analysis of the DMM DAO’s governance structure and how stakeholders will oversee and direct the DMM ecosystem. Additionally, we will look at the utility of the DMG governance token and how it is the central piece that enables the gradual decentralization of DMM by aligning stakeholders’ interest with native skin in the game. DMG is the key to ensuring the DMM DAO is as successful as possible. DeFi Money Market Overview The DeFi Money Market (DMM) provides a trust-minimized, transparent, and permissionless environment on the Ethereum blockchain that empowers users across the world to once again earn a positive yield through digital assets backed by a basket of interest-generating real-world assets brought on-chain into the DeFi space. DMM operates as an ecosystem where real-asset owners can tap Ethereum digital asset owners for funding, which also allows digital asset lenders to gain exposure to uncorrelated passive income. This enables real world asset owners to engage in collateralized borrowing at more competitive rates with a global permissionless reach. In the DMM Ecosystem, both the off-chain assets backing mTokens and the interest revenue generated from these assets are overcollateralized, thus protecting depositors. Being backed by real world assets also means DMM mTokens can offer users a much more stable and reliable ROI on their deposited funds (currently DAI, USDC, ETH) at a stable 6.25% APY. This is in contrast to many other on-chain money markets which offer variable interest rates driven by cryptocurrency leverage traders. Transparency into the off-chain assets backing mTokens and their valuations can be found on-chain and on the DMM Explorer. Additionally, our collaboration and usage of Chainlink’s decentralized oracles adds an extra layer of security and trust to the ecosystem by writing essential data on-chain that details the ecosystem’s valuation and total active collateralization. Overview of DMM DAO Governance Token (DMG) The DeFi Money Market (DMM) DAO governance token, DMG, is the tool through which the community governs and grows the DMM ecosystem and the underlying protocol. As we look to build a vibrant global community, DMG is a critical component that will engender broad participation and mitigate centralized governance risk. Specifically, DMG effectuates governance of the ecosystem via the DMM DAO, which has control over the Ethereum smart contracts and its adjacent assets. Ownership of DMG represents the right to govern the parameters of the DMM Protocol, a claim on the excess revenue generated from the DMM ecosystem, as well as governance over the ability and decisions surrounding the introduction of new assets to the ecosystem in regards to both asset type and asset location. The DMG token is a fork of Compound’s COMP governance token (featuring native delegation and vote weighting) with added capability such as meta-transaction support and a native burn function. DMG Supply Distribution The DeFi Money Market DAO will be composed of a total of 250,000,000 DMG Governance Tokens. The distribution of the total DMG supply is as follows: 30% will be sold in multiple different Public Token Sales over time. 30% will be reserved to incentivize ecosystem developers, partners, and integrations with other protocols to ensure DMM is a vibrant growing and decentralized ecosystem. 40% will go to the DMM Foundation for continued development, support, and other general corporate purposes. 60% of the total supply (150M DMG) has been deposited into timelocked smart contracts with varying vesting periods. The addresses for these contracts can be found on our main GitHub page here. The Foundation’s 40% allocation of the supply (100M DMG) is locked up until November 15th, 2020 which then begins to vest equal amounts of DMG every Ethereum block until a year later on November 15th, 2021 when the last amount unlocks. 10% of the supply (25M DMG) from the incentives allocation and 10% of supply (25M DMG) from the sales allocation are both locked until November 15th 2020 when the full amount releases. This means currently 40% of the supply (100M) is not locked up. Once unlocked, a portion of these DMG funds can be used to grow the ecosystem or can be deposited back into another timelocked smart contract for a longer period of time. These contracts will greatly reduce the liquid supply of DMG and will limit the DMM Foundation’s voting power to ensure the community has a greater say in the DMM DAO. Initially 10% of the supply (25M) has been allocated for the first private + public sale. The private sale has been a major success, while the public sale will be taking place June 22nd as an Initial DEX Offering (IDO) across two decentralized exchanges following a quasi-bonding curve structure. The first sale location will be , which is powered by Dolomite (an orderbook DEX using the Loopring protocol) with a frontend forked from Uniswap v1. The second sale location ongoing at the same time will be mesa.eth.link, which is powered by the Gnosis Protocol (a ring-trade DEX) with a frontend governed by the DXdao. The public sale will be available from 6/22/2020 through 7/22/2020 or until all tokens available have been sold. More information on the sale structure will be released in an upcoming blogpost as the public sale nears. In summary, 10% of the supply (25M DMG) will be circulating, 40% of the supply will be unlocked/liquid (100M DMG), and 60% of the supply is locked up in timelock smart contracts (150M). After the public sale completes, we will be using some of the funds raised and a share of our DMG to help bootstrap liquidity pools on DEXs including but not limited to Uniswap and Dolomite. This creates secondary markets for DMG to enable users to enter the DMM DAO without incurring a large amount of slippage. The circulating supply will rise over time as provide liquidity and we will keep the community up to date on this. Use of Funds The focused development of the protocol and the DMM ecosystem (DMME) are top priorities. To this end, funds raised will be used for protocol development, marketing, grants, business development, funding loans for the introduction of additional asset classes into the ecosystem, operations, seeding the secondary market on Ethereum DEXs, legal, reserves and other general corporate purposes. As a developing ecosystem, the proposed use of funds is subject to change based on new challenges and opportunities identified as the ecosystem matures. DMM DAO Revenue and DMG Token Growth Model The current revenue model is quite straightforward and is composed of four main areas: Excess interest revenue Token burns, which could be done through excess interest revenue or via origination fees Voting and staking for asset introduction, which is in the process of being decentralized and should result in a significant number of tokens being moved away from the liquid supply If an individual or a group owns a block of DMG and reserves Principal or Affiliate membership to introduce assets into the DMME, they will also generate asset introduction or origination fees. Like some of the other best token projects in the industry, we anticipate the DAO making minor tweaks to the token’s growth and revenue model as time progresses and more information about the protocol’s usage is obtained. Revenue from Overcollateralization of Interest Income Streams Further, as the DMME is overcollateralized — with real-assets yielding more than payments due to mAsset holders — the DMM DAO is the recipient of a positive income stream that can be used to fund further loans, capitalize related assets, burn DMG or otherwise grow the ecosystem. The DMM DAO is unique in that it is one of the few DAOs that is already producing revenue and has a straightforward revenue model that grows as DMM’s AUM grows. There is currently $8.5M in car equity loans backing all current mTokens, visible on the DMM swap app. As all the assets introduced to the ecosystem are overcollateralized on an income production basis (as the DMM currently generates 6.25% interest for mTokens holders while the underlying assets generate in total between 8% — 12% interest, there is a constant generation of additional income), these excess income streams assure that 1) That payments of the 6.25% to depositors are made and 2) Excess amounts accrue to the DMM DAO. While still in its infancy, to date the DMM DAO has generated approximately 5.5% annualized revenue on an asset based basis. Just in the month of April alone, circulating mTokens grew 180% to $227k worth of user-deposited funds. Additionally to date, there have been over $670k worth of mTokens purchased in total. Revenue through rights to governance over asset introduction A certain percentage of DMG tokens are required to introduce assets into the DMME (to assure that all DMG holders interests are aligned). The first few test assets are being developed by partners working directly with the DMM Foundation. Some of these assets can include real estate, aviation, and construction equipment. More details can be found in our Chainlink article. Upon the issuance and sale of DMG, we will be rolling out over the next 12 months the fully decentralized onboarding of assets into the DMME. Below we list a high level view on how we envision this to work. While not definitive, we look forward to working with DMG holders and the community to create a unique system that can be scalable on a global basis. Revenue from % of Origination or Asset Introduction Fees for Principal and Affiliate Members: Principal or Affiliate Members (see full information on how this operates below) will contribute 5% of the Origination or Asset Introduction Fees charged to DMG holders on a pro rata basis. DMM DAO Uses of Revenue Once the DMM DAO vote reaches a threshold agreed upon by the DMG holders, the DAO may elect to purchase DMG tokens off the open market to burn them, increasing token demand and lowering the supply available. Token burns will be tracked on a governance dashboard designed to provide transparency into the revenue the DMM DAO engages in and generates. As development, marketing, and maintenance becomes increasingly decentralized, we anticipate a portion of the DAO’s revenue will be used to pay for future protocol work and development. DMM Protocol — Greater Financial Inclusion & Democratization of Access to Capital DMM DAO looks to leverage the benefits of blockchain to provide small and medium enterprises (SME) globally similar benefits in access to capital that large enterprises have always enjoyed. Large enterprises are able to tap into traditional capital markets and currently have access to ultra low rates. With this said, access to reasonably priced capital has been a routine challenge to small and medium enterprises (SME) globally. In a recent study by the OECD, SME interest rates were highest in Brazil (25%), followed by a number of other mid income economies. Developing nations continued to have elevated rates of interest and limited opportunities to have access to capital. New Zealand was the only high-income economy with interest rates close to 10%. As SMEs account for nine out of ten businesses globally having access to capital is a key requirement for global growth and development. SMEs provide more than 60% of overall employment world-wide and roughly 80% of jobs in the developed world. SMEs contribute approximately 50% of global Gross Value Added (GVA), and an even larger percentage in developed countries. The total unmet demand for credit by all formal and informal SMEs is estimated to total $3.5 TN (equivalent to 30% of all formal SME credit outstanding). The International Finance Corporation (IFC) estimates the formal SME credit gap to be $1.5 TN globally with a third of it in high-income Organization for Economic Co-operation and Development (OECD) states and two thirds in emerging markets and developing countries. Restricted access to finance was cited by SMEs worldwide as their greatest constraint on growth. While most SME will not be focused on directly introducing assets into the DMME (although this is not prohibited), we would prefer to work locally with someone who can enable access to reasonably priced capital. We are encouraging partners to use the DMM Protocol which can help solve a critical infrastructure need in the financing of SME. This structure enables individuals, institutions or others to act as a conduit to the DMME by acting as Principal or Affiliate members to introduce assets and garner new revenue flows. DMM DAO believes by making asset introduction simple and through standardized guidelines is the key to promoting access to reasonably priced capital globally. Overview of Asset Introduction into the DMME Outside of the governance rights, DMG has two other essential functions. As the DMME is looking to introduce various real world asset classes across different geographies, to assure that those are attractive assets for the community, a predetermined amount of DMG must be held by those wishing to introduce assets into the ecosystem. This assures all ecosystem participants are aligned to maintain the healthy operation of DMME. The governance of asset introduction is done in 2 ways: It is broken down by geography on the country level with certain requirements for DMG holdings (through direct ownership as well as staking). Within the country there are two types of DMG statuses that can introduce assets, DMG Principal Members and DMG Affiliate Members. We will discuss in more detail below but the idea is to develop a robust global ecosystem that uses the DMM Protocol to assure all interests are aligned and that the DMME has a healthy and vibrant ecosystem. To introduce assets, there is a required percentage of DMG tokens which must be owned and a secondary percentage of DMG tokens that must be staked. Assets can be made verifiable on-chain uploading a hash of the IPFS hosted documents and/or by utilizing an asset-verification scheme where Chainlink oracles attest to asset ownership. Principal and Affiliate Country Members have the right to charge an origination or asset introduction fee to do the onboarding of assets, while a portion is shared with all DMG holders for introduction of assets. They also have the ability to charge consulting fees or other items for asset introduction but this is left to those holders to determine and not within the venue nor scope of the DMME. The percentage required of DMG owned and DMG Staked varies based on the size of the market economy and is done on a per country level. DMG governance will work at scale by dividing the global economy first by size and then by country. This is done using the publicly available and quarterly updated data from the World Economic Outlook Database which is created as part of the International Monetary Fund. The most recent full detailed World Economic Outlook Database report can be seen here. As we believe it is likely the larger economies will be the initial contributors of a greater quantity of assets, we feel it is therefore logical that a higher level of DMG ownership should be required to introduce assets. We envision and plan to strive for local initiatives to take place at any country level organically as we believe the financial inclusion aspect of the DMME is to make reasonably priced capital more readily available on a global scale to those that can introduce assets that comply with the DAO’s key requirements. Initially the 5 Country Zones will be broken down as follows, which are further broken up into two classes of Asset Introduction Members: Principal Members and Affiliate Members (both limited per country). Reserving Principal or Affiliate Membership Country Blocks: The DMG governance portal will allow for any and all DMG holders to cooperate to reserve specific country blocks. Initially the requirements to reserve this will be lower but will be increased as time and scale of the system evolves and grows. Principal members receive 0.5% derived from the income production of the underlying assets, while Affiliates receive 0.25% derived income payment production. Essentially, 0.75% is garnered as a benefit in addition to origination or other fees. These amounts are paid in the DMG governance token. Origination Fees for Principal and Affiliate Members: By owning a specific country block, you have the right to introduce assets (provided you follow the framework and guidelines established by the DMM DAO) as well as charge origination fees to SMEs who wish to participate in the DMME. Origination Fees are paid in DMG and are set through mutual agreement between the Principal or Affiliate Members and those wishing to introduce assets (the DMM DAO does not take a role in setting these fees). All fees are paid in DMG, with a portion burned, and are locked into a contract. Upon each monthly payment from the servicer, these payments associated with the underlying assets are then automatically released to Principal or Affiliate members. Blocks and Block Trading: While not possible at launch, after blocks are reserved, we envision a market will develop for the trading of these blocks between current DMG holders, Block Holders, Financial Institutions, Governments, or anyone who has interest in developing the DMME globally or in their specific country. These blocks will be freely available to trade in real time through the governance platform. In the worst case scenario, DAO participants can override and redistribute block ownership from entities who are not providing value to parties better suited for such a role. Volume of Asset Introduction: In the early stages of the ecosystem, there will be no volume of Asset Introduction qualifications for those who are Principal or Affiliate Members. However, with time it is envisioned that much like the requirements to stake a certain percentage of DMG, Principal and Affiliate Members will need to produce adequate volume of asset introduction to assure the system is growing. These guidelines will be set out much like the underwriting guidelines by the DMM DAO with the main purpose being that no Member is able to “lock up a market” by never introducing assets in a meaningful way. Selection of Real World Assets in the DMME The DMM Protocol is a global decentralized protocol for the introduction of revenue generating real world assets in a permissionless and fully decentralized protocol to enable users to earn interest on any Ethereum digital asset. While the first assets introduced by the DMM Foundation have been based in the U.S. the team envisions the DMM Protocol to be used on a global basis acting as the universal on-chain <-> off-chain bridge for any real world asset. It is in this sense we believe the DMM Protocol can have a substantial and sustained impact on financial inclusion making access to capital and overall capital costs more efficient. We believe that asset selection is key in enabling the ecosystem to function properly as not all assets are appropriate for introduction to the DMME. To review, in order to be considered for introduction into the DMME, assets must have the following additional and essential attributes: It earns consistent interest. It is backed by real-world assets that generate income, which allows the interest to be paid. The backing of the assets and its valuation is made transparently available on-chain. The real-world assets backing mTokens are greater in value than mTokens issued. Income generated by the assets is greater than the APY paid to mToken holders (income generated is greater than payments due). For more information on this subject, please consult our whitepaper. We believe the overcollateralization, diversification, and consistency in interest rates makes the DMM a compelling addition to the Ethereum ecosystem. All of these points are important distinctions, as unlike traditional Money Market Accounts, DeFi Money Market Accounts are not backed by the Federal Deposit Insurance (FDIC) or other centralized government entities. The DeFi Money Markets are based on the total transparency and view into the verifiable assets, not faith in the sovereign centralized government systems. Furthermore, there are no minimums so anyone can start earning interest on as little as $1. DMM DAO Partners and Future DMM has and will continue to work with the DXdao, a DeFi-focused DAO, in crafting the structure and overall governance of the DMM DAO to utilize and implement best practices in DAO governance. The DXdao was granted a 2% allocation of DMG tokens, and is composed of over 400 stakeholders that control Ethereum protocols and related assets, a treasury of Ether and tokens, and oversees multiple different DeFi projects including Mix.eth, Omen.eth, and Mesa.eth. Through the governance structure we have laid out above, it is our goal that the DMG governance token and community DAO will enable DMM to become a highly decentralized protocol removing any single point of failure. We anticipate that changes and fine-tuning to this structure will be required and we are open to any and all feedback you may have as DMM is a community driven project first and foremost. By enabling permissionless access to a stable yield backed by revenue generating real world assets, we envision a world where your geolocation makes no difference to the ability to secure your financial freedom or grow your business. About DMM DeFi Money Market (DMM) is an ecosystem built on the Ethereum blockchain that bridges interest-generating real world assets into the Decentralized Finance (DeFi) ecosystem in a transparent, trust-minimized, overcollateralized, and permissionless manner.