Governance system - What's the potential?


#1

I’m extremely interested in block chain governance and am going to dump some questions and ideas, thoughts.

Assuming we have the ability to vote on what assets get used for…
Proposals & the teams assigned to deliver the work could be separated in some way. Detailed proposals get accepted, then teams can present themselves to be selected.

I’ve had quite an interest in Aragon decentralised organisations… Would we have similar capabilities to use the voting/governance mechanism to run a whole company, purchase assets, serve coin holders in some way.

Voting for leader/s &/or the governance model itself - Could a governance system protect itself from a very wealthy party, voting to remove the governance system itself?

Could the governance system propose something like, picking a ‘rate’ to convert all ETC into ADA (Essentially performing a merger with another coin it has side chained with, at a certain price) This could be a way to centralize which coin is used, while retaining multiple blockchains.


Voting & delegation questions
#2

Hey @YubYub
Thank you for starting this discussion.
Me and some of the other members of the forum have been discussing the potential threat of ‘whales’, or as you say, individuals or groups with huge amounts of capital manipulating the coin through PoS. I think we could see a ‘Big Money’ vs ‘The people’ scenario early on, and as we well know the majority of people still hold only a fraction of the wealth. This is why I think Cardano will have to have some benevolent whales on its side to prevent the system from being hijacked in the beginning.

Regarding governance I think I understand what you are saying, but I don’t see how separating proposals and implementing teams would help. Generally I think it’s counter productive and often impractical to separate design from execution, and have certain people do only one or the other. Especially when it comes to advanced technical subjects such as the development of a crypto-currency, the people who will be in a position to make detailed actionable proposals probably should/will be the people who implement them.

Perhaps Strategic Roadmap/Policies would be a better term, and we should probably discuss how it could be possible to create a dedicated mechanism that prevents/makes it harder for Cardano to be hijacked by malicious stakeholders.


#3

I think in the early days, the motivation to be a malicious stakeholder don’t really exist, it costs a lot of money and going against the crowd would likely devalue the coin.

Long term there may be scenarios, where there are scenarios that benefit the few significantly enough, without devaluing the coin. I personally think you are right, in that benevolent wales who have a set of core beliefs matching those of the community will be essential.

For governance of proposals, you’re probably right in the 1-3 year scale. I’m just thinking about, down the track, when governance is more than just the crypto aspect. When there are a lot more traditional business activities, how these get managed appropriately, and how much or how little an input voters should have to let people do their jobs.


#4

Well, that’s a long way off no? ;D Just very hard to imagine, since we don’t know yet how the stakers’ community will look like at the beginning, and that’s gonna impact the 1-3 years time-frame substantially :slight_smile:

I also believe we will see malicious players positioning themselves from the start, if nothing only to be a part of the circle and have their finger on the button. Anyone threatened by Cardano’s success will unfortunately probably find it most effective to sabotage the project from within.

As far as longer term governance as you say, I think delegation will have to be the key word. Experts and opinion leaders and publicists etc. will orbit the Cardano-sphere and people (and more centrally, staking pools) will have to decide who gets their stake in what.

Possibly, a technocracy/meritocracy will be best for things like scalability/security/stability etc and maybe we could have “Technical Stake” that you delegate to your favorite dev teams.

On the more strategic/social/regulatory aspects we’ll need leaders (I hate to say, politicians) that can shape and evolve the ethos of different voter groups on different matters. People who can communicate and persuade.

This is why it’s so important the community/network be as diversified as possible - geographically, socioeconomically, and in their level of self organization. If the community becomes too uniform in its components I believe we will have a very hard time making any of this happen in a healthy manner.

Early in the morning, so sorry if I’m a bit hazy ;]


#5

some very interesting thoughts.
I wonder if one or some staking pools - consciously made for “poor” stakeholders - could help in this case.
Let’s say (please correct if I’m comepletely wrong on the numbers) a poor participant can permanently stake 500 ADAs. And a whale who want his project funded is going to stake 50,000,000 ADAs. The poor pool would require 100,000 delegating participants, in order to “vote down” the whales proposal.
A whale could try to infiltrate such a poor pool, which could be prevented when the poor pool is not allowing single stakes larger then 1000 ADA’s combined with some “bureaucratic” hurdles. For example, if after the first captcha confirmation a responding captcha contains a code and some random time frames within the next 7 days where the user has to confirm his stake a second time. The goal is to make it easily doable for poor stakers worried about whales, but very time-consuming for single whales

BTW: I also started a thread about the treasury/governance system some days ago and asked some questions. Feel free to comment there too: Questions about treasury system


#6

Hey @werkof :wink:

I think you and @intutionismRus hit the nail on the head here, in the reality we live in, 1000 people with 1000$ have substantially less power than 1 person with 1M$. The question here is how do we ensure that 1000 people with 1000 ADA have the same power as one with 1M ADA. Well, PoS allows just that, but we will have to find the wise and effective delegation mechanisms that allow 1000x1000 = 1M in the bottom line (and who knows maybe even 1000x1000 > 1M :slight_smile: )
Anybody got any ideas?

regarding your questions (answering here just because this thread is newer) -

1.) How do you find majorities for evolutions that many recognize as necessary but are very complex/expensive? (let’s say something like inventing a provable PoS instead of wasteful PoW)

Delegation and technocracy. People will need to choose bloggers/developers they trust or that their pool managers trust, to vote for them on technical subjects. I say bloggers because the important thing here is for people to understand the consequences rather than the implementation of new features.

2.) who defines the timing for votings? is there something like a monthly submission deadline, and then a general pre-defined scheduling like: 15 days for promotion and discussion, then vote. Or are there different timings for small&simple and huge proposals?

Up to us to decide and evolve. I think major decisions will need order and scheduling, small things could be decided on the fly by whoever votes.

3.) what happens (or better who acts) in case of ultimate urgency?

Emergency plans should be made in advance or they don’t work in any world :stuck_out_tongue: Great thought though. We may need things like this that could should be decided is some mega-vote on strategic issues, with a long conference etc.

4.) what if a majority votes for simplicity’s sake against a minority that must bear the consequences?

I think this is very important in the long term. But in the short term, and in open source tradition, people should only vote on things that affect themselves, or that someone else has already volunteered to implement. You can’t “vote” that the devs will implement feature X. You have to find devs that are willing to do it before you propose :smiley:


#7

One of the most important governance principles that I hope is added to Cardano’s governance protocol is the concept of a supermajority, which is typically defined as 2/3 or 3/5 of all the votes in a given referendum or election. Requiring a supermajority substantially reduces the probability of “mob passions” running away with the system, oppressing minorities, and abusing the system in various ways.

Within the context of the U.S. Constitution and many other national constitutions around the world, a supermajority of citizens and/or legislative members (either at the state and/or national levels) is required to ratify constitutional amendments that are intended to fundamentally alter the relationship between specific governmental systems and their citizens.

The supermajority and simple majority are not mutually exclusive. For example, a simple majority (50%+1) of ADA voting stake can be required for feature-based decisions that do not fundamentally change the Cardano governance procedures or any of its core protocol mechanisms and system structures. Then, a supermajority (>= 66.7%) could be required to modify core governance procedures and protocol/system structures.


#8

Great conversation! I trust you have all watched Dr. Zhang’s presentation on the Treasury system. Committees look to be a critical part of the model, and I think will apply to much of what you’re discussing as to how CIPs are brought to a vote. https://youtu.be/Hyh3h_yX-S0


#9

Great topic @YubYub!

I’ve been thinking about governance and treasury systems, and trying to envision the structure of an effective model. It seems, like any successful enterprise, that there are steps to be taken in the value adding process that are reasonably clear:

  1. Define the issue and it’s impact on the enterprise.
  2. Agree upon a solution for the issue, if warranted.
  3. Prioritize the solution.
  4. Assign a supervisory committee and a project team.
  5. Develop the project plan, resource requirements, budget and timeline.
  6. Finalize agreements.
  7. Execute the plan and implement the solution.

Stakeholders should have the right to vote on the first four and the sixth items of the list, with a caveat to item four:

Supervisory committee and project team members should come from pools of qualified individuals elected to the pools by the community and regularly evaluated for performance.

For instance, supervisory committee members might be members of the Cardano Foundation, IOHK, government representatives, journalists, blockchain professionals, and academics.

Project team members might be developers and other professionals qualified to develop and implement the solutions.

A database system could be developed, and added to the UI, to evaluate the performance of the individuals and teams, with performance level triggers built in to prompt action by the community should individuals or teams fail to meet minimum performance levels. Additionally, pool members’ professional profiles, with performance levels and project history, should be available through the UI for stakeholders to review.

Other ideas:

To limit the power of the whales and the staking pools, we might look at balancing voting between amount of stake votes versus unique address votes.

It might also be a good idea to disallow staking pool operators from voting against the wishes of those delegating stake to them. That might be kind of tricky, but I bet it can be figured out.

Just some ideas. I really don’t think it would be all that difficult to build technology to facilitate governance.


#10

I just wanted to add a thought to this discussion. Do you think voting will be private or verifiable( transparent) ? If you have been in this space for a while you might remember James D’Angelo. One of his lectures that has really stuck me is the necessity of private voting in a democracy. https://youtu.be/1gEz__sMVaY
Without private voting the voter is vulnerable to intimidation and vote buying. Imagine a whale offering me 100 ADA to vote in his interest. If he pays money to my ADA address and then is able to verify how that address voted he can successfully buy my vote and influence the election. If I accept his money and he is unable to verify my vote (private vote) I can vote however I want and buying my vote looses value to him discouraging the practice of vote buying. In a system like Cardano, I suspect it might even be easy to create a smart contract which will release funds to my ADA address upon receipt that that address voted as agreed upon in the contract. It is interesting stuff to think about and might be a vector for adversarial influence in elections. This can be reduced or eliminated by secret ballots.


#11

Ye I don’t think technology is going to be the hitch here.
The steps you outline make perfect sense, they actually sound a bit like how Cardano is being run so far.

But there’s not going to be anyone “to run it”.

We need to find the best circumstances and the best avenues for people to somehow self-organize this way. Like you said item 4 is a caveat because who exactly is the party that knows who is suitable for a committee or how to assemble a team.
Laying these responsibilities at the feet of IOHK & the foundation is just reverting to old patterns of centralized governance. We cannot rely on them to head the project, and if they stand behind their words they don’y want to either.

The problems we face are harder than engineering problems, they’re social, psychological, political & logistical. super challenging realms.

A crucial aspect I think in achieving what I mean through what @tknowny describes is the flow and control of information.

I think publicizing team members’ performance online is oppressive and counterproductive. We don’t want to put this kind of stress on our people, and I don’t think monitoring their productivity will really be an issue.
But getting the information out there to people will be.

Having effective integrated content platforms + project performance (instead of people) + general statistics -> In a powerful accessible UX/UI - That would something I’d consider remarkable. A huge step towards the governance I imagine.

Any UX superheroes in the crowd? :smiley:


#12

What you describe makes me think of regulating individuals’ relationship with staking pools (or voting pools or w/e). I’m not sure how we could do that.

I suppose technically it won’t be a problem to have all the pool-owners/community-leaders register and have people delegate stake to them anonymously. It would have to be integrated directly to the blockchain but other than that I don’t see a problem.

If we will need to spend stake in several different ways, which I imagine we will (fee staking, dev/tech voting, strategic voting, treasury budget voting) then this anonymous platform will also be the place to organize your different “voting (delegation) powers”, and equally important will allow leaders/poolers/teams/associations etc to register clearly under an official system.

Not an easy one to crack though…


#13

I guess when you delegate it is very much like electing a house or senate representative in the United States. James mentions in the above linked video that it is much cheaper to buy elected representives’ votes than the entire population because there are far fewer of them. So I guess if vote buying were to take place it would probably be at the delegated rep level which would influence all of the votes under his/her control. It’s way above my head how to mitigate this risk but I trust the minds at IOHK have included this in their models. it will be fascinating to see what they come up with and how this all plays out. Hopefully there will be enough flexibility on the incentive/punishment system to adapt to these things as they arise. Thanks for your input.


#14

Check out Buterin’s frame for a DAICO and my suggestion for a CDAICO - which build upon it. Development teams become 26% owners with No one owning more than 10% of the 26%. Same 26% for Advisory and auditing and outside teams that serve as board/ombudsmen/budget approval. 48% is for investors. No one group controls. 2 groups must agree in cases of conflict.


#15

In response to the concerns raised by @rin9s:

I haven’t delved deeply into the nuts and bolts of this issue. I’m just throwing ideas out there that, I think, might be worth considering.
Initially, a super committee of people from organizations I mentioned in my original reply might propose suitably vetted individuals to serve in the supervisory and project team pools. These individuals would create profiles describing themselves, their skills, and their experience. Much like Linked-In profiles.
Individuals in the supervisory pool would be assigned responsibility for addressing issues raised by the community. Once consensus within the community is reached on a proposed solution, the supervisory committee would assign the project to a team formed by members of the project team pool, and work with them to develop the roadmap and budget for the project. The supervisory committee then becomes the gatekeepers and facilitators for the project.
Individuals would be elected to the pools. I think it would be a good idea for anyone seeking positions of responsibility to submit profiles with verifiable documentation to the community for consideration.
A rating system could be developed for the community to give input on the performance of supervisory pool members, and supervisory committees could rate the performance of members of the project teams. Visibility of performance ratings could be provided at various levels of specificity, based on the need to know of any group.

As for voting:
I agree with @regsanman that voting should be anonymous to prevent bribery and intimidation.
Also, the influence of staking pool operators could be greatly diminished if individuals delegating stake were given an option to vote individually or to delegate their voting stake to the staking pool on each issue. Again, this might be a little tricky, but I think it’s workable.


#16

Great thread here guys. I’d like to make an observation about the staking governance, as governance with a treasury is a bit far off at this point.

Much of staking and governance is going to be dictated by pool rewards.

For example if all pools are offering rewards of 99.9 or 100% then choosing a pool will only be based on maximizing payout considerations. Simply vote for a pool, any pool and you’re done.

On the other hand, if pools are invited to stake, because of their intention to provide value to the ecosystem, and they receive votes from stakeholders based on the value of their proposals, we now have governance considerations that are quite different. In this case pools might retain 5% to 25% of rewards, that go toward developing their individual projects.

In this case delegating your stake becomes quite meaningful as you have a role to play in picking and supporting pools/projects which you think benefit the entire ecosystem, and of course, your investment.