Contrax DAO Starter Guide

The Contrax Team
10 min readJan 1, 2024

Welcome everyone to the newly launched, Wyoming-registered Contrax DAO! Unlike most DAOs, Contrax is starting off with an extensively refined and tested product with legal and compliance prerequisites in place. This means a further-along project at the start of the DAO, allowing us to go to market right away.

This is a guide for every new DAO member, project partner, potential investor, or anyone else that wants to quickly yet comprehensively learn about Contrax.

Table of Contents

· Table of Contents
· The Contrax dApp
Overview
Dapp Differentiators
DApp Development
· The Contrax DAO
DAO Set Up
DAO Treasury
The TRAX Token
· Due Diligence
Project Transparency
Contract Security
Legal Compliance
· Next Steps for Contrax
Leveling up the dApp
Leveling up the DAO
Leveling up Our Diligence
Seed Round
How to Get Involved

The Contrax dApp

The dApp is in beta and can be used right now from any browser on any device: https://beta.contrax.finance

Overview

The Contrax dApp is a web-based app that makes staking and farming as simple as possible. Users create a web3 wallet with a social login (or use their existing web3 wallet), and then deposit into an auto-compounding vault with either ETH or USDC in three clicks, no gas needed. Rewarded are auto-compounded for the user, so they only ever have to deal with a single token. Users can buy USDC easily with simplified KYC from one of our three gateways, or follow our guides to send over funds from their exchange of choice.

“Earn” is the main page, with all the “single token” vaults first, and the more common two-token LP farms lower down. The single token farms are simpler to understand and less risk, as there is no impermanent loss. These farms either earn from the protocol directly, like GMX, or create liquidity between two types of the same token, like ETH for wETH and stETH liquidity. The rewards from the underlying farm and trading fees.

Users earn auto-compounded APY along with xTRAX tokens, and can withdraw their position in USDC or ETH. They can see their positions and their gain/loss per farm in USD on the dashboard. The point of the Contrax dApp is to simplify DeFi, and make it a more appealing for all user types. A newcomer would prefer Contrax to a centralized exhange with little to no APY while requiring trust, while a degen would prefer Contrax to save time and hassle to get into vaults.

Dapp Differentiators

The theme of Contrax is “simple and approachable.” This is accomplished by abstracting away difficulties of other platforms, such as:

  1. Quick wallet creation using social login.
  2. User-friendly interface with a tutorial-like workflow.
  3. Easy purchase of USDC with simplified KYC.
  4. Gas fees waived, simplifying transactions and allowing USDC only.
  5. Auto-bridging of ETH from other networks to Arbitrum.
  6. Zapping allows seamless vault access with USDC or ETH.
  7. Auto-creation of LPs through zapping, no specific token ratio needed.
  8. Simulated transactions for precise fee and slippage information.
  9. Rewards auto-compounded into your entry/exit token.

DApp Development

The Contrax dApp went into initial development in 2022, and was launched into a closed beta exactly one year ago. In this time, the farms were tested and improved on. We tested deposits over time to ensure values changed as expected, APYs were accurate, and the tokens correctly auto-compounded.

The front end of the dApp is hosted on AWS, and the code it builds from is hosted here on GitHub. The app also utilizes several APIs for data such as prices and APYs. We have also integrated Socket for manual bridging, Uniswap for token swaps, and several third party fiat gateways.

Input from early testers helped guide the major decisions of the app, with further iterations from Contrax reps attending ETH Denver 2023 and getting feedback from over 100 different attendees throughout the conference floor. Their feedback was used to further improve Contrax to be even more appealing to crypto enthusiasts.

The Contrax DAO

The Contrax DAO controls the Contrax dApp, treasury, and all projected-owned resources. DAO ownership is represented by the TRAX token, earned via staking on the dApp or completing tasks for it.

DAO Set Up

The DAO was first formed as a committee to solve the paradox of needing a DAO to form a DAO. The DAO committee members were beta testers of the app that ended up largely being crypto professionals who knew about us via partnerships or in-person meet. All the proposals that passed under the committee can be found on the Contrax Snapshot.

Under the directive of the committee, Contrax registered on August 23rd as a Wyoming LLC. Doola is the registered agent of Contrax. The committee established the Contrax Notion where DAO related information is stored, and tasks are assigned for TRAX token payouts.

There is currently an arrangement between Contrax and Leios, the company that originally created the Contrax dApp, that ensures all essential services and bills for Contrax will remain covered by Leios until the first round of funding for Contrax is completed.

DAO Treasury

The DAO earns revenue by collecting a percentage of the APY that is auto-compounded. The current percentage is set to 10% but can be modified. The revenue is collected to the multi-sig wallet of the project. The control of this revenue goes to the DAO. Based on the initial tokenomics, the current proposal is to split this revenue between the DAO treasury and creating TRAX-USDC (or TRAX-ETH) LP tokens that are given as rewards for voting on proposals.

The DAO treasury also consists of all undistributed xTRAX tokens. These tokens are used as incentives to complete tasks for Contrax, and upon the point the DAO has a tradable token, can be used to directly incentivize

The TRAX Token

The full article about the TRAX token can be found here.

TRAX is the DAO token of Contrax, currently earn-able by either staking in any farm on the dApp, or by completing tasks for Contrax through our Notion (see “Get Involved” section below). The main things to know about the token are:

  • It represents ownership and governance for the Contrax DAO.
  • It is an ERC-20 token on Arbitrum One.
  • It has a total supply of 800 million.
  • It is non-transferable for now but retains voting rights.

The token smart contract address can be found here. If you have earned TRAX tokens, you can vote on proposals by joining our space here. You are also able to vote directly from the app in our DAO page, here.

Due Diligence

We understand the importance of security and compliance in DeFi. In the DeFi Wild West days, many project were fast and loose with due dilligence, but Contrax strives to be transparent, measured, and to prefer long term viability over short term profits.

Project Transparency

Contrax aims to be fully transparent as all decentralized projects should be. We believe this also means the founders being public, which is why all Leios and the DAO committee members have been publicly named on Notion, here. Beyond the market advantages of being in the U.S., we believe Contrax will stand out by meeting the higher levels of compliance expected U.S. companies. This will also open the door to more U.S-based investment.

Contract Security

The auto-compounding contracts used on Contrax are exactly the same as the ones used by every other major autocompounder (Yearn, Beefy, Pickle, etc.). Contrax worked with Pickle which directed us to work with Snowball, a fork which included additional zapper contracts. We modified the zapper to work with USDC or ETH as the entry currency into any farm. Contrax was audited by CyberScope in Febuary, 2024. You can see the audit report here.

Additionally, Contrax lists all of its smart contracts on Immunefi and has responded to over a dozen bounty attempts. No vulnerabilities have found in our code since being listed nine months ago. We have also run Consensys Diligent fuzzing simulations, which run automated exploit tests on all of our contracts.

Legal Compliance

The founding company Leios and the Contrax DAO so far have taken all steps to ensure that the product and tokens are offered in a compliant manner, and only ensure all functionality offered will remain possible to offer within the U.S. Leios and then Contrax created the framework for the product and token launch working closely with Riveles Wahab LLP — an NYC-based firm specializing in digital investments — and council from Mari Tomunen — a crypto securities specialist with Flipside Crypto. This includes the product, the flow of funds, the DAO committee, the current token and its tokenomics, and future plans for fundraising using the TRAX token.

The major points for any DAO member to remember are: Contrax will never custody user funds. Currently, we do not directly offer farms, and we should not do so without legal counsel. The TRAX token will not passively give rewards to holders. Instead, we reward DAO-positive actions, like voting. The token itself is not an investment and will only be part of a sale with legal counsel.

Next Steps for Contrax

Leveling up the dApp

Contrax is on Arbitrum but aims to be network agnostic. We should therefore offer vaults on multiple networks. We have Socket set up to auto-bridge but it takes a bit of time and can fail depending on the route, amount, or timing. If we can abstract away layer 2, we add another extremely compelling value add in line with our abstraction goals.

Related to this, we currently cover gas for social wallets, but we use a centralized Heroku server to do. We need to switch to using ERC-4337 to abstract away wallets for all types of users in a decentralized way, and have the option to pass the cost to the user from their actual deposit. We tried to switch a few months ago, but it introduced complications while also breaking much of the app’s functionality.

Most importantly, Contrax needs more stakers for the app. We need to spread the word and take input from users and continue to refine the app so it is the premiere staking experience for users of all backgrounds.

Leveling up the DAO

The primary and most essential goal is to get the DAO active. We need to form and fill committees, have the Notion active, and the TRAX earning ecosystem alive and well. This will also decentralize the DAO further and bring in a more diverse pool of voters. We can then hold our first DAO elecections to have a board that regularly meets and manages tasks

We also need to upgrade the TRAX token to have the functionality agreed upon by the DAO (whether it is the current initial tokenomics or an iteration of it by DAO members). This will require more users to be active in the tokenomics and development committees to take these plans from idea to implementation.

Leveling up Our Diligence

Transparency and clear documentation should be a top priority as we scale so that there can be no question about the legitimacy and authenticity of the DAO. Contrax should endeavor to publish all its process and workflow details on the DAO Notion. This also serves as a way to easily onboard users to the DAO, even for more niche roles.

We should also aim to have all layers of our application perceptually audited and insured. Users should have as much peace of mind as possible when using Contrax. In the same vein, in order to remain compliant within the U.S for both our app and DAO, we should retain DeFi-specialized legal council.

Seed Round

In order to reach these goals, Contrax can hold a seed round, likely using a SAFT or similar instrument, to raise 1 to 1.5 million USD for 7-10% of the total supply. The raise amount and percentage to sell can vary based on the project needs, traction, and market timing.

In preparation for this round, Contrax has partnered with the Dubai-based Accelerator Faster Capital to help us find the right investors for the project. Independent of this, Contrax has its own list of over two dozen VCs and angels in the crypto space that we have given monthly updates about the project for over a year.

How to Get Involved

If you want to get Involved today, here are some concrete steps that take a minute to do:

  • Join the Contrax Discord and just message your desire to get involved.
  • Follow us on Twitter to stay up-to-date on all things Contrax.
  • Check out the Notion and pick up tasks, or make new ones.
  • Join our Snapshot to see proposals and vote on them.
  • Most importantly, stake on the Contrax beta. Earn APY and xTRAX tokens you can vote with. To see how, just follow along with this video.

Currently, all compensation for DAO work in TRAX token, but we aim to switch over to mix or USDC-based compensation in the future. TRAX tokens will allow you vote on all decisions about the project, from the election of the board to the distribution of the revenue.

If you have anything else you want to know about Contrax, just come ask us on Discord, anything at all. Approachability is our whole thing! See you soon, and welcome to Contrax!

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The Contrax Team

Contrax provides DeFi scaling tools to new and existing projects. Check it out at www.contrax.finance