@donhylo

@donhylo

@donhylo

@donhylo

@donhylo

@donhylo

@donhylo

@donhylo

# THE DAO IS CODE.|

### engage with users

@donhylo

@donhylo

@donhylo

@donhylo

very low participation ~4.5%

very unequal wealth distribution

### solve issues or crisis

Collateralised Debt Position

## Dai

cryptocurrency, assets, etc.

stablecoin

@donhylo

collateral

dai

### Good CDP

$300$180

@donhylo

Reference [Dollar]

Stablecoin [Dai]

stable

unstable

risky

@donhylo

## Lines of defence

market forces

market keepers

reserve of value

governance parameters

oracles

global settlement

off–chain reserves

@donhylo

# Layers of governance

## consensus algorithms

to reach consensus

@donhylo

## token designs

to reach consensus

@donhylo

@donhylo

## What is governance

in the context of blockchains

every node on the blockchain network implements a version of the protocol

@donhylo

@donhylo

@donhylo

# private information

(preferences or types)

@donhylo

tokens

@donhylo

@donhylo

# Part Two

## Design of Governance Protocols

@donhylo

@donhylo

### GOVERNANCE language

governance process

decisions

participants

stakeholders

structure

behavior

information

incentives

internal

external

formalised

institutionalised

@donhylo

@donhylo

@donhylo

## Governance is the process of establishing and maintaining the legitimacy of decision making processes

@donhylo

@donhylo

On-Chain

Off-Chain

@donhylo

@donhylo

### GOVERNANCE On-Chain vs. Off-Chain governance

"Governance is a process, if it's not a process it's arbitrary and probably random. It will only work effectively if it's a process. On–chain governance is simply the effective execution of that process."

gavin.wood

"...people who think that the purpose of blockchains is to completely expunge soft mushy human intuitions and feelings in favor of completely algorithmic governance (emphasis on “completely”) are absolutely crazy."

vitalik.buterin

@donhylo

@donhylo

### EOS

Through a Delegated Proof–of–Stake, 21 delegates get elected to be block producers and verify transactions by staking. All the governance happens on–chain.

### TEZOS

An on–chain governance process allows the Proof–of–Stake core protocol to be upgraded automatically.

### In the application layer

Governance affect the usage of the service: tokens in circulation, upgrades, fees, internal decisions

### In the blockchain layer

Governance affect the infrastructure: consensus mechanism, architecture, attacks, rewards, fees, language

@donhylo

@donhylo

### GOVERNANCE governance toolbox

@donhylo

1 voice credit gives you 1 vote

4 voices credit give you 2 votes

25 voices credit give you 5 votes

...

the more voice you want in the issue, the less votes you can cast

@donhylo

Antoine Belle Charles
Chop 3 1 2
Restore 2 3 1
Go Free 1 2 3

Chop prevails over Restore as both Antoine and Charles prefer it to the alternative

Restore prevails over Go Free as both Antoine and Belle prefer it to the alternative

### Freedom beats Execution by 2:1

Go Free prevails over Chop as both Belle and Charles prefer it to the alternative

@donhylo

### GOVERNANCE CONDORCET JURY THEOREM

"...most people would be both incapable of, and uninterested in, making informed decisions on proposals to update a computer program, as the questions would involve technical issues of both finance and programming. Some kind of representative system might be necessary, but the representatives would necessarily have discretion, and be vulnerable to political influence, and we are back where we started."

e.posner

"...most people would be both incapable of, and uninterested in, making informed decisions on proposals to update a computer program, as the questions would involve technical issues of both finance and programming. Some kind of representative system might be necessary, but the representatives would necessarily have discretion, and be vulnerable to political influence, and we are back where we started."

e.posner

@donhylo

# any idea?

@donhylo

unstoppable organisations

## Aragon Core

Aragon is a project that aims to disintermediate the creation and maintenance of organizational structures by using blockchain technology.

We want to empower people across the world to easily and securely manage their organizations.

We provide the tools for anyone to become an entrepreneur and run their own organization, to take control of their own lives.

source: aragon.one

## Aragon Network

The Aragon Network will decentralise its governance by gradually handing over control of the project to its users.

Aragon Network will be the first community governed decentralized organization whose goal is to act as a digital jurisdiction, an online decentralised court system that isn’t bound by traditional artificial barriers such as national jurisdictions or the borders of a single country.

source: aragon.one

source: Colony website

source: Colony website

# Colony features

• ### Dispute and Resolution

source: Colony website

# What is reputation?

diplomas

certificates

GitHub commits

publications

products built

opinions

spoken languages

social media

\sum{merits}=Reputation
$\sum{merits}=Reputation$

XP

### Reputation scores encapsulate everything

What work you did, how much that work was worth, what your peers thought of your work, how long you’ve been doing work.

### Reputation is organized

By domains and tagged with different skills, so that colony members gain influence only in the areas of their expertise.

### Reputation decays over time

Persistent and regular contribution toward a colony is the only way to stay influential.

v.buterin

developers

investors

# Pros

Safe refund for investors

51% attack resistant

# Cons

Susceptible to unequal distribution of tokens

Education of investors is required

Maintaining engagement is required

No weighting votes according to reputation

By Laurent Hardy

# Governance On and Off the Blockchain

Governance is critical and hard because it should allow participants to engage in the decision making process of any project, and at the same time let them feel represented and engaged. Unfortunately, it is often the weak spot of new projects in the blockchain space. We explore the structure of the governance process proposed by Vlad Zamfir, some governance tools, and finally we take a look at a couple of projects to illustrate the concept.

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