Aragon One Official Blog

There are now over 500 Aragon organizations on mainnet and over 500 thousand dollars in ETH, ANT, DAI, and other assets held within organization vaults. The number of weekly active organizations has been increasing, going from 18 in January, to 45 in the last week in April. These numbers may seem modest, but it’s important to remember how early we still are. The realization of an economy dominated by blockchain-native organizations will take time. There will need to be experimentation and iteration along the way. Not to mention improvements to user experience and scalability of blockchain infrastructure.

The people creating organizations today are pioneers. But we are starting to see independent organizations contribute and build on the platform.

The /r/ethtrader daonuts community has been working on a DAO for subreddit governance. They have implemented a novel voting app that implements "Karma-cap voting". Karma-cap voting uses only the Reddit karma earned by participating in the community. Their approach is interesting because it minimizes the influence of capital on governance while still retaining the ability for users to transfer, trade, and integrate the commerce token into other applications and games.

The MyBit DAO has launched with an identity validation registry app called MyID. They are using the application to limit the influence of capital on the organization's decision-making process.

The 1Hive DAO is using Autark’s planning suite apps to distribute a native token to 1hive contributors. They are also developing an app to allow those tokens to be redeemed for a proportional share of the organization's treasury assets.

These organizations are leveraging Aragon to create organizations. They are also growing the library of modular and composable Aragon applications, adding to the already impressive set of applications from various other teams. At the time of writing, this includes Vault, Finance, Voting, Token Manager, Agent, Projects, Dot Voting, Allocations, Rewards, Payroll, Wiki, Pando, Apiary, and Futarchy.

It’s exciting to see this ecosystem establish itself as a diverse set of organizations and use cases begin to emerge!

The organizations created on the Aragon platform are completely independent of one another. They are also independent from the Aragon Network DAO and organizations don’t need to hold or spend ANT.

But all Aragon organizations are connected by shared infrastructure. And shared infrastructure requirements can be addressed most efficiently by provisioning infrastructure and services collectively. The Aragon Network and its native token ANT facilitate this ecosystem-wide alignment.

## The AGP process and ANT governance

ANT is a governance token and can be used to participate in Aragon’s community governance process. The value of governance tokens is not strictly about voting. A governance token defines a community’s core constituency. It provides a mechanism for that constituency to coordinate shared resources, including capital. Much like how the wider Ethereum ecosystem coordinates public goods around the value and increased utility of ether, the Aragon community can align around funding public goods that increase the value of ANT.

So far the AGP process has been used primarily to grow the Aragon ecosystem as a whole. ANT holders have voted to fund 3 independent Flock teams, continued the successful Nest grants program,and delegated responsibility for treasury management and security audits to the Aragon Association.

The AGP process has also been used to fund private services. An example of this is the Aragon Court, within the scope of Aragon One’s Flock proposal.

The Aragon Court is a private service because it requires organizations to pay a service fee. It also requires users to stake ANT in order to participate as a juror and provide dispute resolution services on behalf of the Aragon Network. By voting to fund the Aragon Court, ANT holders have enhanced the underlying utility of the ANT token.

## ANT and the Aragon Court

The idea of the Aragon Court existed since the first version of the Aragon Network whitepaper. The need for a dispute resolution mechanism that helps address the issue of “majority rule without minority rights” was clear. Since then we have refined the implementation details. You can find the full history in our whitepaper repo and you can follow the development in the court repo.

In our most recent designs, participation as a juror requires staking ANT. Unlike other staking approaches, we are using a bonding curve to incentivize early participation. This bootstraps the supply side even in early stages when the Court's total fee volume is low.

The staking and un-staking actions are governed by the following formulas:

Staking:

$s&space;=&space;t&space;*&space;$$\(1&space;+&space;d&space;/&space;b$$^r-1$

Unstaking:

$c&space;=&space;b&space;*&space;$$1+s&space;/&space;t$$^{\frac{1}{r}}$

Where s is the resulting stake in the court and d is the user's deposit. When un-staking, c is the amount of ANT returned. The other variables represent the state and parameters of the staking curve. r is the ratio of deposits to total stake, b is the balance of ANT in the staking contract, and t is the total amount of distributed stake.

Jurors participate in the process in order to earn a share of the fees collected from users of the Court. There are two types of fees that are imposed on users of the Court:

• Subscription Fee: A Subscription Fee is imposed on organizations that choose to use the Court as an arbitration provider. Subscription Fees must be paid on a recurring basis for the agreement to remain valid. These fees are split between the Aragon Network's treasury and among all actively staked jurors.
• Dispute Fee: Dispute Fees are collected at the time a dispute or appeal occurs. The fee amount is a flat value multiplied by the amount of juror stake selected in the dispute or appeal round. Dispute Fees are distributed only to drafted jurors who ruled in favor of the winning side.

The exact parameters of the staking curve and fees have not been determined yet. For example’s sake we can make some assumptions to create a rough model for the dynamics of ANT demand as a result of fees captured by jurors.

It’s difficult to estimate how much revenue would be generated by Dispute Fees without any historical data. However, Dispute Fees, much like an insurance deductible, will serve more as a deterrent against frivolous disputes and appeals than as a primary driver of the court’s revenue.

Let’s assume we have a monthly Subscription Fee of $10 and 1000 organizations subscribed. That is$10,000 in monthly fee revenue as a base compensation for jurors who are actively staked. Disregarding speculation around future fee growth or the presence of disputes, a prospective juror can make an assessment on how much to stake based on the opportunity cost of their capital and the risk (of both labor and capital) of being drafted. The market will determine what a fair rate of return is for jurors, but to make math simple let’s say that the market equilibrium for participating as a juror is 10% per month, then we can expect jurors to stake up to \$100,000 worth of ANT in the court. As the number of organization subscriptions grows, so will the fee revenue, and assuming the same market rate, so will demand for staking ANT.

## The Aragon Court and The Aragon Network DAO

The Aragon Network is a DAO governed by ANT holders. Unlike the AGP process, the Aragon Association will not be required to curate proposals. Instead the Aragon Network DAO will rely on the Aragon Court and Proposal Agreements to ensure that proposals meet certain subjective requirements.

Specifically that Proposals must be made in good faith with the intention to improve the Network's operational efficiency, quality, or breadth of service, and benefit all ANT holders in equal measure.

The existing AGP process will continue to be used in parallel. The expectation is that as the Aragon Network DAO proves successful, additional Finance and Meta track AGPs will be used to transfer more authority away from the Aragon Association and into the hands of the Aragon Network DAO. With this, ANT holders will gain more direct control of the Aragon project’s resources and be in a position to better influence how the project evolves.

#### Luke Duncan

Research at Aragon One