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EOS Community Governance Proposal Draft

The purpose of this document is to outline a process for vetting and appointing individuals to control the allocation of EOS token creation, and therefore, the future direction of EOS. Control over financial resources is the ability to incentives the action of the community toward a particular vision.

There is a lot of background research and deep thinking that goes into the design of this governance proposal. To understand the philosophy please read the free book, “More Equal Animals - The subtle art of true democracy” where I expose the principles behind organizing people to work together under the law of the jungle.

One of the most difficult challenges for any community is identifying who is in the community and who is out of the community. Those who are in the community are committed to support the outcome of the governance process or to resign from the community. Communities are most powerful when people can yield to the group decisions without choosing to leave. Communities are most weak when they cannot make group decisions without creating division, resentment, and bitter culture.

In the crypto-currency world the definition of “community member” is often fuzzy and “self attested”. As a result, anyone can claim to be a member of the community and act in ways that are inconsistent with the desired code of conduct of other community members. This enables trolls and adversarial groups to paint the community in a bad light.

A true democracy is created on the basis of “invitation” where new members must be accepted by the group and must in turn voluntarily agree to be part of the group. Without this process a group can lose its identity and is unable to act in unity or maintain quality control and integrity to the group vision.

The most “basic” requirement to be a community member is to have skin in the game: to hold tokens. If you cannot demonstrate that you hold tokens then clearly you are not a community member. This is the approximate standard applied to all crypto currency communities. Unfortunately, this allows anyone with cash to join. Imagine if your country allowed anyone to buy a passport for one dollar. Uncontrolled immigration would allow a populous country to overtake the culture of a less populous country by simply sending an army of trolls to buy their way in.

It is not enough to hold a token. In fact, one could argue that holding a token is meaningless. Imagine if everyone that held a US dollar was automatically a “community member” aka “citizen” of the United States? Clearly the United States as a community benefits from the rest of the world (not part of the community) using their currency. Therefore, I would like to assert that token ownership is a necessary but not sufficient measure of community membership.

A better definition of a community member is a person who voluntarily submits to and honors the community governance process. The purpose of the community is to strengthen and protect its members independence and influence in the world. A community divided against itself cannot stand. This is not to say that everyone in a community must agree on everything, that is impossible. It is to say that they must agree on the process of governance and then honor the result.

All communities start with a single person establishing a vision and inviting others to join. Alternatively it could start with a small group of people who unanimously agree on a governance process and then that group starts inviting people to join. It is not effective to have an “open community” that allows people to join without invitation. Such a community would have a composition approximating the culture of existing wealth holders. Furthermore, your status of community member is contingent upon maintaining good standing with respect to the governance process. Invitations can be retracted. This is derived from he right to secede inherent to voluntary consent.

Becoming a Member

To become a member you must request (or be offered) an invitation from an existing member and have it confirmed by two other members. This means it takes 3 people to agree to accept a new member into the community. Finally the new member must be approved by at least one elected official of the community.

You can only invite or endorse new members after successfully participating in your first election. The reason for this is that the new member will be randomly assigned to meet with 9 other members of the community which will minimize opportunity for collusion and multiple accounts.

Every time the community grows by 10% an election is triggered automatically and no new members can officially join until the election process is concluded. This mitigates the risk of sybil attacking the election by creating a large number of fake users relative to real users.

Furthermore, each new member must make a contribution of 10 EOS to the community fund per election they participate in. The combination of financial contribution and endorsement ensures quality control, skin in the game, accountability, and sybil attack resistance.

Each member will be allowed to invite or endorse up to 20 people per election. This means that a group of 3 people can collude to invite at most 20 people per election.

Elections will be held at least once per year.

Evicting a Member

From time to time a community member may be found to be out of compliance with community standards and unwilling to make necessary corrections. The most obvious example could be the failure to complete a “proof of person” challenge. A “proof of person” challenge can be initiated by any existing member if they suspect another member account is either “fake” or “duplicate”.

The eviction process starts with an individual submitting a “evection request” along with a bond of 100 EOS. If 3 of 5 randomly selected elected officials approve the eviction then the bond is returned, otherwise the bond is forfeit.

When an individual is evicted from the community they lose their power to participate in the governance process, but they do not necessarily lose their blockchain account or any assets not explicitly contingent upon being a community member.

Authority Hierarchy

Every election starts by randomly assigning members to groups of 10. Each group of 10 must reach an 8 of 10 agreement on who represents their group. This would represent a Level 1 elected official. All Level 1 officials are then randomly assigned to groups of 10 which must reach 8 of 10 agreement on someone to represent the group, this represents a Level 2 member. If 8 of 10 agreement is not achieved then no official is elected from that group. This process is repeated until there are less than 10.

The final group of representatives (of size less than 10) will consist of 1 person with 2/3+1 approval (the president) and 2 people randomly selected from the top group (co-vice presidents). This will create 3 people who collectively form the root of the governance authority (a triumvirate).

Any action taken by the Triumvirate must be approved the president and at least one of the vice presidents.

Allocating Funds

Given a community budget of $10 million dollars per year (or about 0.25% of EOS inflation) this is how authority of the funds would be distributed:

50% of the community funds are allocated by 2/3 agreement of the triumvirate.
50% of the community funds are evenly divided as “budget” among the next lower level groups.

For each group that is awarded a budget:

50% of the budget is controlled by the elected representative of the group in combination with any other member of their group.

50% of the budget is divided among the groups below.

This process is repeated until there Level 1 representative gets full control of the budget for his group.

The outcome of this process is that a community with 10,000 people would elect 1000 representatives each of which will receive full autonomy over $12,500. There would be 100 Level 2 representatives which have control over $250,000 assuming they can get approval of one other member of their group. Lastly the president would control spending of $5 million dollars assuming he could get agreement from one of 2 randomly selected vice presidents.

If the community grew to 100,000 members with the same total budget, then the allocation would look something like this:

Interestingly enough, a community with 100,000 members each contributing 10 EOS per election would generate $4 million dollars worth of budget automatically without the need for any inflation. As the community grows and the value of EOS grows with it then the budget would scale automatically.

Do you like the general direction of this proposal?
  • Yes
  • Maybe
  • No

0 voters

64 Likes

Part of me is excited to participate in groundbreaking governance that I think will probably shape other communities outside of EOS going forward. The world is hungry for governance and institutions that work.

The other part of me worries that this will be too much work. Facebook has scared me into my own little corner of independence where I don’t want to worry about having to agree with anybody.

12 Likes

What are some of the examples of what the money would be used for? If Level 1,2,3 etc. get a certain amount of funds for the year what are some of the potential things that can be done with the money? A big concern of EOS around people who feel burned is that current governance structure doesn’t improve nor add value to the system. Many of the bp’s don’t contribute useful tools and many that did were eventually forced out.

6 Likes

Ok, there is a lot of information on this post and a lot to take in so I wont jump to any conclusions on the methodology of how the community governance structure could work, I suppose those are things that can be debated and worked upon if we do decide to go this route (which should be question 1 for everyone reading).

However, knowing the EOS ecosystem well from being part of this project from day 0, I do think the hardest sell here is getting top21 to approve an inflation change, the best thing would be to be self-funded (if possible) or refund that inflation in someway (burning the entrance and other fees).

There is also a lot of political work in getting the Asian BPs onboard, it is important to have their participation on this if it is to be approved…

A lot of thinking and work to do on the weekend, that’s for sure!

8 Likes

Yes, there are many eos projects in China that have not received attention and support. Asian BPs (like DFS, Pizza and Tokenpocket, not the exchange) will improve this situation.

12 Likes

What happens if the final level can’t get 2/3 + 1

1 Like

I design collaborative systems, so I’m opinionated. But besides my opinions on building a decent system, there are clear problems with this one, even if we assume the mechanics are sound. I hope you can fix these or start from scratch.

“A “proof of person” challenge”

First off, come on, this is a HUGE problem in any system, and you’re just glossing over it with three words. Maybe look into the Telos Identity solution, openID’s social verification, or anything besides three vague words.
Also WTF is this??

#1 The eviction process starts with an individual submitting a “evection request” along with a bond of 100 EOS. If 3 of 5 randomly selected elected officials approve the eviction then the bond is returned, otherwise the bond is forfeit.

So I have to trust $300 USD to random people and maybe I’ll get it back later? Opportunity costs?

Every election starts by randomly assigning members to groups of 10.

In my systems (sorry, have to here) we assign groups based on geodomains, or people that live in the same region or have similar attached data. You can do a similar system by allowing people to select from something they believe in. Random groups aren’t how humans organize. I understand the thinking, but it’s not natural.

Other than that, I think it’s great to give back 10m for community projects.

If you want to see a system I’ve designed on EOSIO, let me know. We use geodomains, time tokens to give verified accounts equal power, and a tree-modeled funding system where trees are general goals, branches have specific tasks + capital, and leafs are actions to complete that task that anyone (registered) can do and get paid.

9 Likes

Eosio would tremendously benefit from such kind of dao. If you want an eosio based chain involved (Ultra) let me know, we’d love to participate.

5 Likes

Very intelligent governance system, also very admirable thinking process, WOW . 10 EOS per year is very, very reasonable . Let it Fly .

2 Likes

I agree with what you’re saying.

I’m probably just saying what you’ve already said but here goes:

Having actions triggered by paying is fine but when you denominate it in a currency who’s value could potentially go up…a lot, you’re creating a VERY high barrier to entry. The little man is why EOS is so large but you’ve proposed a system that creates an unsustainable participation model.

“Furthermore, each new member must make a contribution of 10 EOS to the community fund per election they participate in.”

&

“The eviction process starts with an individual submitting a “evection request” along with a bond of 100 EOS.”

Basically what you’re saying is, if EOS hits $1K a piece, it would cost $10,000.00 JUST to participate in a community who’s influence may or may not reflect the majority. Yes, it’s good to have skin in the game but I shouldn’t have to sell a kidney to be able to do so.

If you have a bad actor, you would need to pay $100,000.00 JUST to remove this individual. That is for a SINGLE bad actor. The thing is, cartels are not made up of just 1 person. When you create a system of governance, people will always find loopholes to benefit themselves.

Pin these triggers to a method of payment that is stable.

Basically you’ve created a pay to play system.

1 Like

Can you provide any objective data to support your subjective concerns?

EOS demand is daily trade volume. Which is close to 100% of the market cap…

How is 0.25% going to impact the price?

Thats mathematically impossible.

We have far more fluctuation than that on a daily basis, and many people complain the eos price is too stable.

Unless anyone can show a model where the 0.25% has any impact at all…, its pure FUD in my opinion

3 Likes

I am in support of this proposal, excited to be a part of it! :+1:

7 Likes

It’s their choice. That question is unanswerable

I like it.

Soooooo much better than ecaf

More than happy to contribute 10eos and to take part in the process.

Lets do it!

2 Likes

Great job Dan, Really well thought and excellent idea and exposition. I Like the idea of the random seed of the voting system. A don’t see any gaming opening on the first election. On the second election and on, I see one opening and have one concern that we should consider:

  1. What would stop the last 10 people group, from the first election, to be entrenched on power forever?
    Imagine, On the second year election round, they will have, not only their original standing, but in addition, they have experience running the complex system.
    Now, Imagine they going back to the first level of 10, who would not elected them back to power? (Imagina Dan in your group, all of us will say, well there it goes my chance :sweat_smile:).

Many countries have different levels of power distance, and culturally they will honor seniority of standing. I know many anglo western will not identify with the prior statement, but is a proven fact of cultural power distance studies.

If this cultural phenomena happens, the same people will be elected over and over.

Possible solution, How about if the last 10 of the first election form a new 10 group themselves in the second election, ensuring that only one of them goes up into the next level. They will self eliminate and chose their best candidate.

This way, each election cycle will really start from zero.

  1. The 10 EOS- I understand the need to have skin in the game, accountability, and sybil attack resistance, but that threshold will leave out of the election cycle most of the communities that are REALLY using the chains as a life saving tool.

Solution: thinking about it, don’t know how to harmonize both needs

1 Like

By all means, lets go for it, but only if we have a strong base of ALL paid block producers first. I don’t want to have an automated sock puppet 4$ AWS node siphoning EOS to an exchange account, have a say over the community budget.

I used nominal numbers, the governance structure would allow the community to dynamically adjust the membership cost.

3 Likes

There’s a lot to like here as a great starting point which we can refine over time. @dougbutner does make some good points around organizing into totally random groups. I think at least lining folks up by general region and interest might be useful.

Organizing by region helps with cultural issues, etc. I hope that anyone willing to participate is also going to want to be active and supportive whether or not they end up in an elected position. Therefore it makes sense for folks to self assign themselves to at least a broad category(technical development, entrepreneurship, marketing and PR for example) so they feel connected to their voted official and then might be more inclined to want to connect with and help them out in the future.

I do have concerns about general accountability for the return on investment(ROI) of the allocated funds. There are many people who might have good ideas or deep technical skills, but efficiently allocating resources to create value is a skill that few people have meaningful experience with. Even folks with lots of experience end up failing to create more value in these types of situations.

I know we want to be thinking long term and the whole point of this isn’t to just pump the EOS token price, but the long term success of this initiative will depend on its early results. So it might be a good idea to be sure that we have a consensus on the general strategy for resource allocation in the first 6 months to a year.

I’d also like to see us take some portion of the funds that come in from membership fees and inflation to be automatically put aside as they come in to create an endowment. A long term goal to generate renewable funding resources that help grow the endowment over time will expand our impact and reduce reliance on inflation funding over time.

I’d also like to know what you’re thinking about in terms of the actual; legal structure for all of this. Are we going to form an international Foundation somewhere? If so, what is the jurisdiction you’re thinking about? I’m happy to help on this topic if needed.

6 Likes

Unless there are 3 people in the group who happen to hate me. I would have to have a very high approval rating to be secure. At the very least I would have to avoid pissing off 30% of the people.

3 Likes

If you read my book you will see that I also support grouping people by region. You wouldn’t want to group people by opinion or you will create a two-party system. I was thinking of grouping by language.

8 Likes