DEXDAO — User Manual

Last updated: 06 November, 2023

This is a functional description of the DEXDAO platform made for your convenience, and it is not a legally binding document. For legal terms and conditions of DEXDAO see https://landing.dexdao.app/terms 

1. What is DEXDAO?

DEXDAO is a decentralized exchange with its site https://dexdao.app/ (the “Site”) that allows you to trade wrapped LP-tokens issued with XDAO platform (the “WLP”). 


The WLP can be traded for USDC tokens, while sharing the trading fees between entitled classes of users. DEXDAO also provides an anti-scam protection for the traders and WLP-holders.

2. How to onboard? 

To use DEXDAO you need to connect a personal EVM-compatible crypto-wallet (the “Wallet”). The connection of the Wallet to the Site is conducted by authorizing a test transaction.

 

You also have to enter a referral code for DEXDAO, which can be obtained via various sources on the web.   


You shall not be a person or entity who reside in, are citizens of, are incorporated in, or have a registered office in the United States of America or any Prohibited Localities, namely Restricted  Persons as defined by Section 3 of DEXDAO Terms of use. 


DEXDAO supports the following blockchains: BNB, Arbitrum. 

3. What is LP and WLP?

LP (or liquidity provider) tokens are a special type of tokens used by DAOs deployed on XDAO platform. LP tokens are issued by the DAO in exchange for individual contribution to the DAO treasury made in ERC-20 tokens (most commonly in stable-coins). 


LP tokens can be burned and the holder will receive the respected share of all ERC-20 tokens currently held by the DAO treasury. For example, if you hold 100% of the DAO’s LP, you can claim 100% of all ERC-20 tokens kept by that DAO. For more information on LP tokens please see:  

https://docs.xdao.app/architecture/lp-token-liquidity-provider-token 


WLP are created by the process of wrapping the LP and making them eligible to be traded on DEXDAO. 

4. Trade

The users can exchange WLP and USDC and freely move these tokens between their wallets. 


DEXDAO does not keep your assets. Your tokens are stored by the crypto-wallet of your choice that was used to connect to the Site. 


Each trade constitutes a blockchain transaction, proposed by the Site and authorized by you through the signing of the proposed transaction with your Wallet. 


The trade occurs within 2 pools of assets of the respected Trading pair: if the user puts the asset in 1 pool, he/she is entitled to take another asset from the second pool, according to the current exchange rate, which is set by the smart-contract.  


The WLP price is determined by the current ratio of tokens within the Trading pair and it is displayed before authorizing the exchange. 


For more details see: 

https://docs.uniswap.org/concepts/overview 


The trade is conducted by the original Uniswap smart-contracts available at: 

https://docs.uniswap.org/contracts/v3/overview 

5. Trading fees

The trade takes place within the pair “WLP – USDC”. 


Each trade is subject to 1% or 2% fee (depending on what you buy).  

If WLP bought for USDC: it’s 2% trading fee.
If USDC bought for WLP: it’s 1% trading fee. 


Example: 

if “1 WLP = 1 USDC”, then: 

Buy WLP for 100 USDC: receive 98 WLP;

Buy USDC for 100 WLP: receive 99 USDC. 


Blockchain gas fees are also applicable to each deal and are paid by the one who ordered the exchange. 

6. Distribution of Trading fees

All trading fees are collected by the Manage DAO (1 for each blockchain) and are further distributed as follows: 


  • ¼ to the LP-issuer;

  • ¼ to the buyer’s referral person;

  • ¼ to the user who currently holds the WLP;

  • ¼ to the «DEXDAO treasury».


The trading fees are distributed in USDC on BNB and Arbitrum networks.  


If the fee was initially collected in WLP, it will be automatically converted in USDC by the smart-contract before its distribution. 

7. Claiming rewards 

Users can receive a share of the Trading fees if they are WLP-holders, referrals, or LP-issuers. 


Users shall actively claim their due share of the Trading fees in the “My account” page (section “Claim your prize weekly”). The rewards for each week shall be claimed individually (i.e. if you have the unclaimed rewards for 3 weeks, the “Claim” button shall be pressed 3 times). The rewards shall also be claimed separately for any blockchain network. 


The reward of the LP-issuer (a DAO) shall be claimed via a vote made by that DAO. The respected DAO-members will be automatically detected by the Site and any of them will be able to claim the LP-issuer reward in favor of the DAO-account (if the respected DAO vote has succeeded). To make such a vote, the DAO-member shall previously choose the time periods and networks to be claimed, and the Site will redirect him/her to the respected XDAO page with the pre-fabricated voting proposal ready to be activated.  

8. Referral system

DEXDAO employs a 3-tier referral system and distributes 25% of all Trading fees collected by the exchange within that system. 


Each user with the tier-1 referral code can invite an infinite number of tier-2 users. Each tier-2 user can then invite an infinite number of tier-3 users. 


The trading fee is distributed proportionally to the trading volumes delivered by all users connected to the initial tier-1 referral code. The parent users get counted in their favor all trading volumes (in USDC) of all lower-tier users they invited. 


Example:


“A” (tier-1) invited “B” and “C” (tier-2), and then
“B” invited “X” and “Z” (tier-3).


Imagine that all users had the same trading volume worth of 100 USDC within a week.

“A” invited (directly and indirectly) 4 people and secured $400 worth of trading by his/her referrals and receives 1 USDC.

“B” invited 2 persons and secured $200 worth of trading by his/her referrals and receives 0.5 USDC.

“C”, “X”, “Z” has not invited anyone and do not participate in the distribution. 

9. Anti-scam protection

DEXDAO employs 2 major ways to protect its users from the manipulation of LP price:


  • Additional issue lock-up: if any new LP has been wrapped, there shall be a 30-day delay before those WLP will be eligible for the trade on DEXDAO.


In case of wrapping any LP, the “Trade” page will display the respected warning on the mint of new WLP. If “learn more” button is clicked, you can check the full list of LP that have been recently wrapped and their un-lock timer. So, we recommend you to regularly check the list of recently wrapped LP to avoid a sudden price-drop of the WLP you hold. 


  • Liquidity lock-up: the creator of the Trading pair can withdraw its USDC and WLP only 1-year delay after the Trading pair was created (plus a 30-day delay after the withdrawal was requested). 

10. Wrapping LP

Any user who owns the respected LP tokens can wrap them and, thus, make them suitable for the exchange. 


Tokens eligible for the wrapping:  only LP tokens of DAOs deployed with XDAO platform. 


The wrapping is done by moving those LP to the smart-contract address provided by the exchange. If done correctly, the WLP will be available for the claim 30 days afterwards under the ration “1 LP = 1 WLP”. Those WLP can then be used without any restrictions.  


The WLP can be traded on DEXDAO only if the respected Trading pair (WLP – USDC) has already been created before the application for a wrap. So, do not wrap any LP if there is no Trading pair already created for them.


Currently, there is no option to un-wrap the LP tokens (it will be developed in the future). So, if you consider claiming a share of the respected DAO treasury, do not wrap the LP. 

11. Creation of a Trading pair

If you have an active DAO (deployed on XDAO), that DAO can mint LP tokens suitable for DEXDAO exchange.  It is done via the following procedure: 


  • The applicant (any personal EVM-wallet, not a DAO) files a Listing application with his/her account that contains 5000 XDAO tokens in it. 

  • The applicant communicates his/her name ; office position ; email ; address of the DAO-manager (to collect the trading fees) ; type of the token and its utility area ; token symbol ; blockchain address of the LP token.  

  • Choose the settings of the token’s Launchspace: target or Raise amount (between 10,000 and 100,000 USDC) ; token sale start price ; start date and time of the trading (currently it is 72 hours after the application is granted).

  • Choose the settings of the Governance system of the Trading pair: vote quorum for WLP-holders ; minimal number of WLP held by a Wallet necessary to initiate a vote.

  • Set addresses of the Governance managers, those who will declare the results of Governance system votes, change the appearance of the Token page, administrate its social media accounts. 


After filling the application forms, the user has a choice of whether to apply on a paid basis (5000 $XDAO application fee) or try for free. Generally, you shall have an arrangement with DEXDAO to get it for free. We do not guarantee the satisfaction or even consideration of the application-for-free. 


If the application was paid with $XDAO, the Trading pair will be instantly created, and you shall prepare the LP for the wrapping in the Applicant’s wallet.


The DAO, that minted the respected LP, shall be considered the “LP-issuer” in terms of any further rewards. 


Once the application is granted, the exchange will create the Token page: it is publicly available and displays the data shared on the application stage and ticking timers (if any). 

12. Launchspace 

Launchspace is a public page that would be created immediately after the listing application has been satisfied. 


Launchspace serves for the initial liquidity raising for the Trading pair, to supplement the WLP with the appropriate number of USDC. 


Launchspace is active for 72 hours after the listing application has been granted. 

During that time, the pair shall gather the Raise amount set in the listing application (varies between 10,000 and 100,000 USDC).


The trade is conducted under the rules of modified Dutch auction with the upper and lower price limits that are automatically corrected depending on the demand.


If the Raise amount has been failed to reach within 72 hours, the collected USDC will be refunded to the senders (gas fee deducted). 


The WLP obtained via Launchspace are subjected to a 30-day lock-up with the linear unlock. 

If the Raise amount was reached, the user who donated USDC can check “My account” page for the “Vesting” section. There shall be displayed the lock-up status of the WLP due to the user. The WLP lock-up is 30 days, starting after Launchpad completion. 


To start the trade, anyone shall press the button “Finalize Launchspace” that completes the Launchpad.  

13. Governance 

After the start of the trade, the WLP holders can vote on the decisions related to the token. The vote results are not enforceable and constitute just a poll to help the Governance managers to make informed decisions. 


To create a vote, the user shall check the Token page (section “Governance”). To create a vote, the user shall hold the minimal number of WLP that was set by the Governance managers. 

All WLP-holders can vote for the proposals created by other users.  


The Governance managers declare the results of the votes. 


Any Governance manager can single-handedly change any settings of the Governance system. 

The initial Governance managers are set by in the listing application. In order to change a Governance manager, please contact DEXDAO in the section “Edit token” or by submitting the following form: https://9uj6y2z3bna.typeform.com/dexdao 

14. Major disclaimers and warnings

  • DEXDAO is an experimental and still-in-development technology, which is vulnerable for numeral threats like hacks and exploits. Despite DEXDAO took a reasonable care of the development and has its smart-contracts audited, the loss of profit and even the loss of funds are possible. By using DEXDAO you agree not to hold DEXDAO and any persons associated with its development and admiration liable for any loss of funds, unless it happened due to the fraud or gross negligence. 

  • You are solely responsible for the safety of WLP and USDC stored in your Wallet. 

  • Currently, there is no option to un-wrap the LP tokens (it will be developed in the future). So, if you consider claiming a share of the respected DAO treasury, do not wrap the LP. 

  • To get prepared for a sudden price drop of an WLP, please regularly check notifications on the wrap of new LP and the “Trade” page (new WLP are supplemented with a 30-day delay before turning eligible for the trading). 

  • The capitalized terms have their meaning as given in DEXDAO Terms of use. 


For further information please also read:


Terms of use: https://landing.dexdao.app/terms 

Privacy policy: https://landing.dexdao.app/privacy 

15. Contacts

If you have any questions please contact DEXDAO by: 


Links: https://link3.to/dexdaoapp  


Email: feedback@dexdao.app