UPDATE - Please read
Thank you to everyone who attended the recent community call to discuss the governance upgrade. If you missed it, you can find the recording here.
We want to provide the following update based on the call and subsequent discussions with voters and community members.
- We recognise that the original design created a cognitive burden. This led to genuine concerns around capture resistance that we want to avoid. Below, we propose some changes that we hope to resolve this.
- Otherwise it felt as though we were generally aligned on the implementation and technical architecture.
We are therefore reducing the scope back to our common ground so we can move forward on implementation. We want to reiterate that this upgrade is being provided in an MVP form. We hope that perfection does not become the enemy of progress as we move to a vote.
Summarising the final proposal we plan to bring:
We will outline a simplified final proposal to the DAO next week. The new proposal is for 2 governance “houses”, the primary one for Builders (of all sorts) and the second one for Stakers.
The Builder’s house would hold 80% of the vote weight and be governed on a simple 1-Person-1-Vote basis (1P1V). The time after which you lose your vote, if you become inactive, would be determined by the size of your impact.
The Staker’s house would hold 20% of the total vote weight and this would then be divided equally between supply (nodes and LPs) and demand (Gateways). Vote here would be token-weighted but with a square root function for more equal representation.
Citizenship would be a pre-requisite to vote in either house, but without any voting power in and of itself.
As in the previous iteration, parameters are flexible and designed to be optimised over time, but with the total number of parameters significantly reduced from the original proposal. We will retain the automations and platform improvements from our original proposal.
Confirming the final changes:
After assessing the concerns raised, we want to reaffirm our commitment to POKT’s best-in-class 1P1V Proof of Participation model. We plan to do this through the following changes:
- Citizenship is required to become a DAO voter, but we will remove the “Citizen’s House” from our governance design to reduce complexity.
- Proof of Participation is really about Proof of Impact/Contribution. This will be the primary source of power in the DAO and all voters within the Builder/Impact house will have 1 Vote. We will use the decay functions so the highest impact contributions have the maximum power decay period (12 months)
- We will retain the proposed Staker house but simplify it further with an equal split between supply stake (nodes, LPs) and demand stake (gateways). It will retain the square root function to provide more equal representation of stake.
- We will now have only two houses. The balance between the two houses is to be controlled by a single IMPACT:STAKE Ratio parameter which we intend to set at 80% Impact and 20% Stake at launch.
Reasoning for these changes:
- Citizenship is an important part of onboarding and governance but the citizen house added complexity that can be abstracted away.
- We heard clear feedback around the simplicity of a 1P1V system. We will retain this but use decay to more effectively recognises high impact contributions over time. This enfranchises new contributors without the complexity of weighting.
- We heard the concerns about the risks of introducing staked tokens to governance. However, stake plays an important role in any system “owned and governed by its users”. We don’t want to kick this question further down the road and plan to bootstrap small and controlled experiments with the creation of the Staker house. We will further assess the role of stake in governance only when we have collected more evidence and data.
- By having one parameter - the Impact:Stake Ratio - we have the ability to further tune the system without creating cognitive overload in understanding the power distribution. Everyone can (mostly) just focus on driving impact.
- With these changes, we think we have created a strong MVP and truly believe this latest round of community engagement and feedback has led to a better and safer version of the system to emerge.
- We will provide an update on governance for discussion at the end of each three-month cycle so that the community can be an active design partner in the continued evolution of the system.
If you have any further questions, please share them here in the forum or reach out to me directly.