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DIP-2: Baseline Issuance

Headline: Default $DIMO rewards for users who connect valid devices to the network
Author: The DIMO Foundation
Submitter(s): The DIMO Foundation [0xCED3c922200559128930180d3f0bfFd4d9f4F123]
Status: Deployed
Voting URL: Snapshot​
Discussion Forum: Discord #🗳️governance forum
Vote Type: Level 3​

Abstract

This proposal specifies the conditions by which DIMO users will earn baseline $DIMO token rewards for connecting to the network.
Baseline Issuance rewards users with a piece of a weekly issuance pool of $DIMO tokens. Users earn varying amounts based on how they're connected and how long they've been connected, even if there is no end customer using their data. The amount that is distributed each week will start at 1,105,000 $DIMO and will decrease 15% each year.
This stands in contrast to Marketplace Issuance, which rewards users based on fees generated by the network based on demand for user data.
450,000,000 $DIMO tokens (45% of total supply) are allocated to driver rewards. Deducting the airdrop, this leaves 382,491,185 $DIMO (38% of the total supply) to be issued over 40 years for Baseline Issuance.

Motivation

The goal of Baseline Issuance is to prime the network by incentivizing drivers to connect vehicles and stream data prior to the growth of demand from data consumers and app developers. As DIMO matures, Market Issuance will gradually supplement and replace Baseline Issuance, thus removing the need to inflate the supply of $DIMO in perpetuity.
It is also designed to: reward and give control to those who show long-term support for DIMO; incentivize a continuous data connection, which tells a fuller story of driver behavior and vehicle performance when maintained over a long-period of time; reward those who provide a greater quantity and frequency of reliable data; and avoid rewarding based on distance or time traveled as not to incentivize unnecessary and wasteful driving.

Specification

Per this DIP, the weekly issuance will be allocated per the following methodology. $DIMO token holders can vote to alter these rewards formulas, alter the issuance amounts, and make other changes in subsequent DIPs.
In year one, DIMO will issue 1,105,000 $DIMO per week to all qualified DIMO users at 5 AM UTC each Monday. This issuance amount will automatically decrease by 15% every year, with Baseline Issuance ending in 40 years, unless modified by a future DIP.
A weekly issuance was chosen because driving behavior varies dramatically by time of day (i.e., it’s concentrated during peak commuting hours). If the issuance protocol were to distribute $DIMO by the hour, then drivers would be under-compensated during rush hour (as the reward would be split between a high percentage of drivers) and overcompensated for driving at 3AM US Eastern Time. A weekly issuance allows for a predictable issuance schedule, transaction fee optimization, and relatively frequent rewards distributions without incentivizing abnormal driving behavior.
Qualified users will earn their share of this weekly issuance based on how many points they've earned relative to other users in that period. In other words, if you earn 1% of the points in a given week, you also get 1% of the tokens distributed that week.
To be qualified for rewards, users must: download an authorized DIMO client; add their vehicle and establish an integration; complete vehicle minting and device pairing on-chain as applicable; and transmit data each week. As of the time of this writing, DIMO Mobile is the only authorized client.
Users must also opt-in to allowing their aggregated and anonymized data to be used to improve the network for troubleshooting purposes, and to create data products. This work will be done by Digital Infrastructure Inc. on behalf of the DIMO Foundation. Aggregated and anonymized means that consumers of user data will not be able to determine personal information about an individual user. An example of such a report would be "the average range of Tesla Model Y's in California" and even this report could only be compiled if there were a statistically significant number of Tesla Model Y's connected in California. Proceeds from the sale of user data will increase Market Issuance and will fund future the DIMO Foundation. This may also be amended by a future DIP.
Lastly, user wallets must not be flagged by Chainalysis' AML tools as risky or fraudulent.
Points are calculated as follows:
Users who fail to connect for three consecutive weeks will fall back one level.
In the example shown in the table above, Alice earns 2,000 points for having been connected between 20 to 36 weeks, 1,000 points for her Smartcar software connection, and 6,000 points for having a Full-Size OBD Dongle installed in her vehicle.
Here there are 10,000 cars connected to DIMO and each car generates an average of 6,000 points that week, for a total of 60,000,000 points. Alice's 9,000 points represent 0.015% of the points for that week (9,000 ÷ 60,000,000). Therefore, she earns 165.75 out of the 1,105,000 tokens from this pool (1,105,000 * 0.015%).
Curious how this would play out for people besides Alice? The table below shows earnings for a small sample of hypothetical drivers in the same hypothetical week. This is meant to be illustrative using a small handful of made up users, not an exhaustive list of every combination of attributes.

Implementation

In order to enact the specification above, the DIMO Foundation has engaged Digital Infrastructure Inc., the publisher of DIMO Mobile, to confirm eligibility, calculate points, and trigger the rewards smart contract to distribute tokens. Technical documents can be found here.
Copyright and related rights waived via CC0​

Citation

Please cite this document as:
The DIMO Foundation, "DIP-2: Baseline Issuance", no. 2, November 2022. [Online serial]. Available: [https://github.com/DIMO-Network/DIP]

Changelog

Dec 7, 2022: added discussion forum and voting type to the DIP header.
Dec 7, 2022: adjusted review date to give people more time to claim the Airdrop prior to voting going live.
Jan 6, 2023: final adjustment to review date — proposals go to vote on Tuesday Jan 10.
Jan 26, 2023: adjusted review date again to allow for fixes to delegation strategy prior to voting.
Aug 31, 2023: passed DIP-2: Amendment 1​

Token Disclaimer

The contract address for $DIMO is 0x5fab9761d60419c9eeebe3915a8fa1ed7e8d2e1b on Ethereum and 0xE261D618a959aFfFd53168Cd07D12E37B26761db on Polygon. Please always confirm that you are interacting with this contract address and not that of a fraudulent imitator. This proposal may not be enacted if it violates Cayman Islands law. Please triple check that any communications are authentic as it’s common for scammers to try to trick you into sending them crypto or into revealing your private keys.