Agent DAO Governance

As Trady AI Agents become integral to trading platforms and financial ecosystems, maintaining top-tier model quality is essential for maximizing profitability and user satisfaction. AskTrady introduces the Agent SubDAO Governance Framework, a decentralized system designed to ensure Trady AI Agents consistently deliver high performance. This governance model empowers stakeholders to collaboratively oversee and enhance the quality of AI trading models.

Structure of Agent SubDAO

The Agent SubDAO is composed of:

1. Liquidity Providers (LPs):

   1. LPs stake their agent-specific LP tokens with trusted validators.

   2. They benefit from improved trading model quality, leading to higher profitability and returns from the agents.

2. Validators:

   1. Validators evaluate the quality and performance of AI trading models.

   2. They are rewarded or penalized based on the quality of their decisions, ensuring alignment with ecosystem goals.

   3. Validators gain voting power through Token Delegation from LPs, following a Delegated Proof-of-Stake (DPoS) mechanism.

Staking and Reward Mechanism

Rewards Distribution

Rewards within the Agent SubDAO are distributed from the following streams:

1. Trading Profits: A portion of profits generated by trading activities is allocated to the AgentDAO treasury. These funds are used for buybacks and token burns, reducing supply and increasing token value.

2. Protocol Emissions: The protocol allocates emissions to treasuries of top-performing agents, incentivizing model improvement and quality assurance. Validators are rewarded for their efforts in maintaining high standards.

3. Trading Fees. All trades involving agent tokens incur a 1% transaction tax (adjustable via governance). This tax supports operational costs like inference computation and GPU usage, ensuring sustainable operations while the agent builds up revenue.

Validator Rewards

• Validators are rewarded based on their voting power, which is proportional to the LP tokens delegated to them.

• Higher voting power results in higher rewards, incentivizing validators to perform their duties diligently.

Penalty System

• Validators face penalties if they approve poor-quality models that negatively impact trading performance.

• Penalties include loss of staked tokens or reduction in voting power, ensuring accountability and focus on quality.

The Governance Mechanism

Validators within the subDAO will review and approve AI models for deployment and upgrades. By participating in the governance process, validators help maintain quality standards and ensure that sub-par models are not deployed, thus protecting the integrity of the applications and ensuring the best possible user experience.

Validators can only gain voting power through delegation from liquidity providers. This delegated voting power determines their influence over the subDAO’s governance decisions. The more voting power a validator holds, the greater their influence over model quality decisions.

Voting Process

Validators participate in governance to ensure only high-quality trading models are deployed or upgraded. Governance decisions include:

• Model Validation and Upgrades:

  • Validators review new and updated models for deployment.

  • Poor-quality models are rejected to maintain the integrity of the system.

• Voting Process:

  • Voting power is determined by the total tokens staked with each validator.

  • Proposals for model upgrades or penalties require majority approval to be implemented.

Model Upgrade Process

• Validators are presented with two anonymized models for comparison.

• They interact with each model over 10 rounds and select the better-performing model.

• Final votes determine which model is implemented, ensuring fairness and avoiding bias.

Benefits of the Governance Framework

• Enhanced Agent Quality

  • Governance ensures that only the best trading models are deployed, maximizing profitability and user satisfaction.

• Incentivized Participation

  • LPs and validators are rewarded for their roles, creating a collaborative ecosystem focused on quality and performance.

• Deflationary Mechanisms

  • Profits and emissions fund token buybacks and burns, creating deflationary pressure that increases token value over time.

• Ecosystem Growth

  • The governance model fosters innovation and quality, driving the growth and robustness of the AskTrady platform.

AskTrady’s governance framework ensures that stakeholders are aligned in their goal of creating and maintaining high-performing AI trading agents, fostering a sustainable and profitable ecosystem.