As we start to prepare our proposal for the governance upgrade we wanted to provide this overview and summary to allow people to engage in discussion around specific objections or concerns with this design.
We welcome you to attend the community call next week (Thursday 15th) where we will walk through the system, invite feedback, and open the floor to anyone to ask questions or get the information they feel they need to be better informed about this important DAO decision.
We hope to see you there!
POKT Network’s proposed governance upgrade is built on three principles:
- Governance power cannot be bought, it must be earned.
- You earn governance power by driving impact, and it should grow with your impact.
- This requires a lot of thought “under the hood” but should be automated as much as possible to be frictionless for participants - you work to earn your governance, but claiming what you’ve earned should be easy.
There are four main challenges with the current system (more info in our original post here):
- Gaps in representation: current paths are not appropriate for many stakeholders (investors, grantees etc) and outright exclude others (i.e. anons who cannot verify via Discord selfies).
- Inertia in representation: earning a vote takes a long time and once it’s earned it persists even after you stop participating. In the last 12 months we had only ~5 new DAO voters.
- Imbalances in representation: it’s much easier to earn a vote for some types of stakeholders compared with others, so we get imbalances.
- Manual processes: the manual nature of the current system produces frustration and can deter vote seekers.
There are many different ways you can positively impact the project.
We look at impact in 3 areas, or “houses”:
- Builders: drive impact by building the ecosystem and protocol. These people are shipping code, building products / tools, winning POPs (RFPs), running experiments, and much more. They earn governance for these types of impact and hold significant weight (40% of total).
- Stakers: drive impact by productively using the POKT token to support or secure the network. These people burn tokens as Gateways, stake POKT as Servicers or Validators, provide liquidity to our wPOKT pool, and much more. The network cannot operate without stake, so they too have significant weight (40% of total).
- Citizens: drive impact by understanding and promoting our mission, values, and vision. Every voter must show this base level of understanding. So every voter (Builder or Staker) must also be a Citizen. But since barriers are low, being a citizen carries less governance power (20% of total).
Because any member of the community can earn power across any / all of these houses, we called the system ‘3D Governance’.
There are a couple of things you need to do at the start but, after that it’s (mostly) automated.
No more manual actions, bottlenecks, or follow-up.
Your governance power accrues automatically as you ship code, stake in LP pools, win an POP or do any of the many many things that positively impact the project (more examples later).
It will also fade if you become inactive.
Here is the process:
- Create a Gitcoin Passport. Retain your anonymity while we make sure that nobody can game the system by using multiple identities.
- Create a digital ID on mygateway.xyz . Connect your wallet(s) and any other sites you wish to the Gateway protocol; this provides the infra for Cred issuance and automations.
- Earn your Citizenship Cred by completing 2 automated ‘quests’.
- Automatically receive Builder Creds. When you launch a successful proposal, win a POP, complete a Socket, have a PR merged, etc. - including within the 12 months before launch of Creds - all of this will automatically be captured and issued to your ID or wallet.
- Automatically receive Staker Creds. When you run your own nodes or stake with a third party your credentials are also automatically issued to you.
- Vote in Snapshot. Exactly the same as today - to vote you simply use your Ethereum wallet and vote. Your voting power is automatically calculated based on your Creds.
As anyone who has ever built anything knows, simple is HARD and it has to be supported by a LOT of deep thought, detailed design, and careful execution.
This section is for those who want to dig into that.
Perhaps the biggest challenge we sought to tackle was to ensure that the system is capture resistant and that power is balanced fairly across individuals and groups.
This balance is achieved in part through:
- Individual Voting Weight
- Collective Voting Weight
Individual Voting Weight recognises that all impact is not equal and creates the granularity needed for power to grow with your impact.
- Weighting of 5 points for shipping a PR to one of the main POKT Network repos (because of the importance of this to the performance of the protocol).
- Weight of 1 point for being approved to open a Quick Grant (Socket) and an additional point if it’s open for more than 2 self-reporting periods.
While there are many more examples of this individual weighting, and many more ways to earn voting weight as a builder, each is just a representation of this same “impact = what?” question.
Collective Voting Weight sets constraints on how much voting power a group can have in the DAO. For example:
- We plan to give 20% of voting power to Citizens, 40% to Builders and 40% to Stakers at launch. As such, no single group can achieve a simple majority on its own.
- Stakers represent all of demand, supply and liquidity and, within the 40% allocated to Stakers, we plan to sub segment further:
- Servicers & Validators collectively holding 16 percentage points
- Gateways collectively holding 12 percentage points
- Liquidity providers (LPs) collectively holding 12 percentage points
This is the full and complete set of collective voting weight constraints.
You can also find the full and complete detail in our forum posts about the concepts of 3D Governance (PGOV1), Modular Implementation (PGOV2), and Personhood (PGOV3), as well as the Citizenship Specification (PGOV4), Builder Specification (PGOV5), Staker Specification (PGOV6), and Voting Specification (PGOV7).
You may have seen us talking about Modularity in Governance.
We’ve used that approach to design this system in a way that will allow us to iterate as we learn, in a modular fashion, without breaking the system. We don’t know as much today as we will tomorrow, and we need to retain flexibility while not undermining our legitimacy.
This means that, if you disagree with one of the parameters referenced above (e.g. 40% to Stakers), you don’t need to reject the whole system.
All of the parameters are designed to be calibrated over time.
More on the modular governance approach here.
Once again, we strongly encourage you to attend the community call next week where we will share a walkthrough of the system, welcome further feedback, and open the floor to anyone to ask questions or get the information they feel they need to be better informed about this important DAO decision.
We hope to see you there!
It is worth noting that the governance power in the Staker house does not include all token holders; it is only linked to productive capital (staked capital). Holding a token is not enough, it needs to be deployed / staked to support the network.
It is also worth noting that, within the Staker house, unlike raw token voting (where each token held correlates to more power) we apply a method that is similar to quadratic voting in order to flatten the curve and more evenly distribute the balance of power.