Democracy V0.1

this feature is work in progress and currently only deployed on testnet Gesell. See Governance to learn how it currently works_on mainnet

V0.1 only encompasses a subset of local community governance actions

The democracy module will bring decentralized governance to Encointer, facilitating participants to take decisions. Such a universal human suffrage (one person one vote) governance shall render the current Encointer council obsolete. Examples of such decisions are the addition of new meetup locations to a community, an adjustment of the Demurrage rate or changes in the ceremony schdeule.

The decision making process should follow the subsidiarity principle, meaning that decisions should be taken on the lowest possible level. So for example, if a community wants to extend their region by adding some new meetup locations, only community members should be allowed to participate in the vote.

Proposals

There is a set of predefined proposal actions that can be proposed and voted on. Everyone can start a proposal on any action (ie. set basic income to 48 LEU) at any time. There can even be multiple proposals ongoing in parallel.

Every member of the community can use their personhood reputation to vote on each proposal. A proposal gets approved if it has enough Aye votes continuously for a long enough time period.

Practical Examples

Let's assume a proposal has been submitted at the end of the last registering phase. During the first day, the proposal doesn't reach the minimal turnout yet, but on day two it enters the passing state and the confirmation period starts. More people make up their mind and vote Nay, so the proposal drops out of confirming state before the end of the confirmation period. Over time, more Aye votes are coming in and the approval threshold is surpassed. This time, the proposal stays in the passing state during the entire confirmation period gets approved. Any community member can call the lazy evaluation and the proposal action will be scheduled for enaction at the start of the upcoming registering phase.

Another example shows a proposal with insufficient approval. After an initial boost, it stays in the failing state until the the end of its lifetime. Any community member can request lazy evaluation and the proposal will be cancelled.

Voting

Eligible Reputations

Each successful cycle attendance for a set of eligible cycles gives you one vote. We currently allow only reputations older than the previous cycle but younger than the reputation lifetime (relative to proposal submission) to participate in the vote. This is because the count of those reputations is not subject to change anymore. We need a reliable count of all eligible reputations in order to determine the maximum amount of possible votes (the electorate), which is required for Adaptive Quorum Biasing (AQB) and to determine the minimum turnout.

Your own voting power depends on the number of cycles you have attended during the eligible period. The more cycles you have attended during this period, the more voting power you have. This is a sybil-resilient approximation of universal suffrage which rewards your dedication to participate in community cycles regularly. Thanks to the reputation lifetime, however, there is no undue bias towards longtime community members as only recent reputation is eligible for voting.

Adaptive Quorum Biasing (AQB) and Minimum Approval

In order to determine if a proposal is passing, we use positive turnout bias. The approval threshold follows the formula: \(thrs = \frac{1}{1+\sqrt{turnout}}\) where \(turnout \in [0, 1]\) and \(thrs \in [0, 1]\)

In addition we enforce a minimum turnout of 5%.

The goal of AQB is to ensure proposals can be approved even if turnout is low. Especially noncontroversial proposals may suffer from low turnout as they fail to mobilize the crowd. However, low turnout should require a higher approval rate to pass.

The blue trace depicts a possible turnout over time. It can be expected that the initiators of a proposal will immediately vote Aye, leading to very high approval at start. Nevertheless, as long as less than 5% of the elecorate have cast their vote, the proposal is in failing state. Over time, more people will make up their mind and the proposal may flip between passing and failing state several times before eventually staying in the passing state for the confirmation period. The end of the confirmation period is depicted by the blue dot.

Tutorial

For a tutorial about hands-on testing the democracy module, please see the Democracy Tutorial

Deep Dive

Scope of Democracy

This section describes the powers of Encointer's onchain democracy (post-V0.1) and at what level decisions are to be made.

Protocol Changes

Changes to the Encointer protocol are out of scope because they need to be decided by Kusama Relay-Chain Governance as Encointer is a common good parachain. Upgrades to the Encointer Protocol must pass a public referendum on Kusama, where KSM token holders decide.

For a vision of how Encointer could execute global democratic protocol governance in the future, we refer to this research blog post

Global Actions

These actions can only be decided upon by the quorum of all encointer communities globally

• Adjust ceremony schedule (can be adjusted anytime)
  • next_phase: force progress to next ceremony phase
  • push_by_one_day: postpone next phase change by one day push_by_one_day
  • set_phase_duration: adjust ceremony schedule phase durations
  • set_next_phase_timestamp: arbitrarily define the time for next phase change
• Manage communities (can only be enacted during Registering phase)
  • new_community: Register new communities
  • purge_community: well...
• Manage Ceremony Parameters (may only make sense to enact during Registering phase)
  • set_min_solar_trip_time_s: security parameter to calculate minimal location distance
  • set_max_speed_mps: security parameter defining the maximal speed over ground of an adversary
  • set_inactivity_timeout: define how many ceremonies a community can be idle before getting purged
  • set_endorsement_tickets_per_bootstrapper: define how many endorsement tickets bootstrappers should get to invite people they trust
  • set_reputation_lifetime: define how long proof-of-personhood reputation is valid for and stored
  • set_meetup_time_offset: finetune meetup time difference to high sun
• Decide on global treasury spending proposals

Community Actions

These actions can be decided per community for themselves

• add_location: add meetup location for community
• remove_location: remove meetup location for community
• update_nominal_income: the amount of basic income per ceremony per person per community
• update_community_metadata: change name, currency, artwork IPFS cid for community
• update_demurrage: change how fast balances are demurraged per community
• Decide on community treasury spending proposals

Petitions

Petitions are votes on matters that cannot automatically be enforced by the Encointer protocol. Therefore, they are non-binding for the network. They can have global or local scope. Petitions can be used to signal the network or community leaders about the will of the community.

Detailed Proposal States and Lifetime

Let's look a bit closer at more complex cases:

There can be multiple proposals up for vote simultaneously, even on the same action

When a proposal gets approved, all other proposals on the same action get cancelled, to avoid conflicts

When a proposal A gets approved, its enactment will be scheduled to the beginning of the next ceremony cycle.

Proposal Lifetime

The following examples will describe examples of how proposals change their state over time based on a changing number of votes and on other proposals.

Let

• Confirmation Period = 3 units,
• Proposal Lifetime = 12 units,
• X/Y denote X aye votes and Y total votes,
• O = Ongoing,
• C = Confirming,
• A = Approved,
• X = Cancelled.

For the sake of simplicity, we assume that just a simple majority is needed for a proposal to pass and there is no minimum vote required.

In the case of multiple proposals, all proposals shall be of the same action.