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"Life is movement, movement is change, and the only change in movement is stagnation or death." - Faulkner
Both Polkadot and its parachains need to change over time in order to remain relevant, and we designed Polkadot to have a transparent and sophisticated process that not only approves or rejects changes, but also automates them.
All systems evolve or die, and blockchains are no exception. Ease of managing change, the knowledge that someone can fix a problem or add a new feature, is a big draw of a centralized system. But to be sustainable over long periods of time, the system must be decentralized. Economies that cut off the flow of transactions, authoritarian regimes that block, and that don't accept new languages are all dead, or already dead.
The common thread between these examples is a lack of agency, both perceived and real. When people are incapable of organizing or expressing their voices, or when they perceive their voices as powerless, they withdraw. With a centralized company's product, user agents can be as simple as hearing product feedback, such as privacy concerns. In a nation-state, agency can mean having the freedom to create one's own future. Much of the debate about wealth inequality revolves not around inequality itself, but rather that the system is rigged.
Affecting change depends on the things that change. Although change in a distributed system takes a different form than change in a centralized system, humans have evolved ways to manage change. Language, perhaps the most decentralized system of all, can be changed in a number of ways, some declarative (like l'académie française) and some descriptive, where the users of the language control and collectively understand words meaning. Descriptive changes often follow descriptive changes; for example, most English style guides now allow "singular".
In linguistics, the death of a language has to do with how often the language changes, not whether people still speak it. Linguists classify Latin as a "dead language," even though it has speakers. Language changes over time as people invent or discover new things they want to communicate, people want to express emotions in new ways, or new generations challenge long-held worldviews.
Blockchains themselves are challenging entrenched worldviews, and for that they need a way to evolve. This evolution has already happened. Blockchains started as a way of expressing financial transactions, but quickly evolved to express zero-knowledge operations or abstract logic. No one knows how people will use the blockchain in the future, but rolling out a new blockchain with every new idea is not sustainable.
Blockchain governance frameworks have faced several problems so far. Forking separates the community and the software, and the reliance on security and adoption leads to a zero-sum game where only one chain emerges. Some claim that there is no governance at all, and that groups can fork the network through parameters such as block size, and must defend their fork with religious zeal. Others use off-chain collectives organized over the phone or in meetings, leading to shadow hierarchies where only an unwritten few make decisions, or lacking a framework for making decisions, the collective never progresses. These issues lead some to vote directly by throwing money at them.
Coin voting is a good first step towards transparent, open, on-chain governance, but low turnout makes it vulnerable to large constituency-controlled voting. In all blockchains to date, governance has stopped at decisions. They lack the means to make decisions even if agreements are reached through block voting or coin voting. The real power remains outside the protocol, such as miners or validators. For example, just because a country holds elections, it doesn't mean it's considered a democracy. The system must include the means to develop results. The same is true for blockchain. Coin voting is not enough if it is not binding. The system must include the means to develop results. The same is true for blockchain. Coin voting is not enough if it is not binding. The system must include the means to develop results. The same is true for blockchain. Coin voting is not enough if it is not binding.
first level title
The Origin of Collective Consciousness
Polkadot has several ways for users to express their desire for change. In addition to making it easy for users to propose changes, Polkadot also provides a structure for users to form collective groups with unique privileges. The motivation behind the collective comes from seeing votes in other decentralized protocols or applications controlled by individual voters. These decisions include sensitive topics such as killing apps.
Stakeholders should ultimately have control, which is why all changes to Polkadot are subject to a public vote, but stakeholders should also have the ability to elect representatives for such decisions. Collective protection mechanisms can protect users with small funds from the "whims" of a single large token holder.
Polkadot has two special groups related to governance: the Council and the Technical Committee. By meeting certain conditions, the two collectives can call privileged functions that affect how proposed changes make it to the referendum. Polkadot uses origins to express privilege. In most cases, such as a typical balance transfer, the source is simply the account that sent the transaction. But Polkadot can express different sources under certain conditions, such as having 2/3 of the collective submit the same transaction, and calling a function when a higher vote is reached.
council
council
The Council is an on-chain collective that represents passive stakeholders. It does this by proposing important changes and canceling uncontroversially dangerous proposals. Any DOT token holder can run for council, but to act in good faith for the network, their reputation will be at stake.
Polkadot will be established with a 13-seat council and gradually expand to 23 councils. Council elections use an approval voting scheme where users can vote for any number of candidates they support. Elections use the same Phragmen process as validator selection, selecting councilors by choosing the configuration with the highest support. Phragmen is a method of approval voting where the user selects all acceptable candidates and a vote counting algorithm finds the most supported, most acceptable member of parliament.
Council elections also account for the order of elections by users voting for directors based on their rank in the top few. The MP with the highest score is the Prime Minister. If the primary votes in favor, it applies to all abstainers at the end of the council voting period. [2]
The council separates its own queue of proposals from the public and votes on which should be given the top spot in the next referendum. In addition to normal proposals and special council proposals (such as unslashing), the council can also use polkadot's treasury. The treasury is an account that accumulates money through inflation and a portion of transaction fees and slashes. The council can make and pass proposals to use these funds for developers, community engagement, or more complex activities such as using bridges and decentralized exchanges to trade their own DOTs for other tokens.
When the Council votes on its own proposals, the votes are counted by membership, not stake. This makes it very difficult for large shareholders to wield undue power in polkadot's governance; they may be able to join the council, but they cannot hold referendums with low turnout.
technical committee
technical committee
Technical committees are Polkadot's last line of defense against software errors. Unlike the Council, the Technical Committee is not elected by voting, but is elected by the Council based on the formal specifications or client implementations provided by the Polkadot protocol.
Technical committees do not comment themselves, but can fast-track existing recommendations to complete them in a shorter time than normal. If agreed, the technical committee can skip the development delay (discussed later) and develop the proposal as soon as it is approved.
first level title
Proposal: Seeds of Change
All governance decisions start with proposals and are subject to public referendums. Bidding can be any of a set of privileged features that are not available to most users. Some of them are simple, such as setting account balances. Others set system parameters, such as the number of validators. The most powerful features can change the logic of Polkadot itself.
Proposals can start in three ways, namely:
(1) As with any DOT token holder, from the public
(2) Council from the Council, which is made up of publicly elected DOT holders
(3) As a result of another proposal
Regardless of origin, the recommendation is to start only with hashes of privileged function calls. The actual proposal (the preimage of the hash) must be charged separately relative to its size. This separation prevents attacks where users take up a lot of space in the chain database in proposals. Proposers can provide preimages off-chain for token holders to discuss. Using this approach, users with very little capital can still make large proposals as long as some larger token holders support it enough to register their preimage and make a deposit to put it on-chain.
first level title
referendum
The core principle of Polkadot is that a majority of shares (defined as the total number of shares issued) always controls the network. Blockchain is an economic tool that does not understand the one-person-one-vote system of democracy. [4] Those who want to have an influence in the direction of the system must actively participate in it.
Proposals must pass a public vote where all stakeholders can contribute. Polkadot's governance system alternates between waiting for the council and public proposals every 30 days to autonomously select the next proposal to go to a referendum to ensure that public proposals have an equal chance to participate in the referendum.
Once a referendum is held, users can start voting. But unlike other blockchains, voting is not strictly the number of tokens in the account. Every vote comes with a certain amount of conviction, and some semblance in the game. By default, users who vote on approved proposals must lock tokens until the proposal passes. This staking system allows them to remain in the network and endure the outcome of their vote, while those who lose the referendum are free to withdraw. However, users can increase their voting power by taking decisions for a longer period of time, thereby increasing their knowledge of the outcome. The user's voting power increases with each doubling of the lock time, all the way up to six times the account balance (this would be a lock for 32 era periods).
secondary title
adaptive arbitration
In the name of decentralization, Polkadot allows anyone to come up with new ideas, but with that comes a certain amount of volatility. One of the benefits of a centralized system is that no one person can get radical ideas through. Adaptive quorum bias allows Polkadot to facilitate efficient changes in a volatility-proof manner.
All public proposals use what is known as positive adaptive group bias, meaning that as referendum turnout increases, the threshold for the number of yes votes needed to pass a bill decreases. Because of the risks associated with changing the protocol, the system is designed to support the status quo. The results of many contested votes (e.g. Brexit, US elections) are only reversed after a few days. Positive bias ensures that only uncontroversial proposals pass. Even referendums using positive adaptive quota bias require majority passage when voter turnout is low, but as turnout increases the passage threshold becomes a simple majority. This preserves the core principle that a majority stake can always control the network.
first level title
proposal making
So far, a proposal has gone from some origin (either the council or the public) and passed through Polkadot's voting system, where stakeholders approve or reject the proposal. Governance structures must hold those in power accountable for their decisions, and Polkadot does this through two mechanisms: token locks and autonomous proposals.
After the referendum has concluded, successful proposals enter a lock-up period before enactment; rejected proposals are simply discarded. Remember that all votes in a referendum have an associated belief. Those on the winning side are locked and cannot transfer their tokens until their lockup period is over.
secondary title
protocol upgrade
The most powerful management behavior is runtime upgrades. A blockchain's runtime encompasses the types of information it stores and the logic that users can access to alter the data. It's the UI, the state transition functionality, the business logic, the DNA.
Most proposals are made by updating appropriate storage entries in the blockchain database, e.g. changing the number of validators. Runtime upgrades are the same - Polkadot stores runtime logic in its own database and includes privileged functions to change it - but upgrades also rely on another aspect of Polkadot's design.
At a high level, a Polkadot client consists of two parts: the client and the runtime. The client contains all the infrastructure to execute the runtime, specifically the WebAssembly execution environment. There are many ways to implement clients, and there are actually several teams building Polkadot clients. But there is only one runtime: because the runtime is in state, nodes must agree that it is on the same chain. This way, Polkadot can be upgraded without requiring users to install upgrades.
Kusama is the first blockchain to be upgraded in this way. Self-enactment makes Polkadot an autogenous system—a system capable of being generated through its interactions and processes—like a programming language for a self-compiling or evolving organism. More importantly, on-chain governance and self-determination give token holder institutions the tools to express their views and the assurance of impact on their expression. Outside groups won't get in trouble just because they don't like the proposal. Validators must validate transactions in the protocol, and changing the protocol is itself a transaction, so any validator can manually prevent enactments that violate the protocol.
first level title
Governance Beyond the Relay Chain
This article focuses on the governance of the relay chain. However, governance operates alongside other systems such as staking, which locks tokens to secure the network. Users can lock the same token for multiple purposes, meaning tokens from the same account can be bonded together to participate in NPoS and still vote in a referendum. The delay in enactment of the proposal is 30 days, which is longer than the 28-day period for lending unsecured, so stakeholders who are not satisfied with the result of the referendum can stop lending unsecured.
Additionally, Polkadot isolates staking and governance. Other PoS protocols apply passing rights to validators to vote on behalf of their supporters. In Polkadot, nominating a group of validators does not give them any voting rights in a referendum, nor does it prevent nominators from voting on their own. Validation nodes exist to ensure the availability and validity of Polkadot's parachains, its parachains and parathreads' state transitions, rather than controlling changes while the Relay Chain is running.
To date, most accounts on the blockchain represent individuals or smart contracts. Therefore, one might assume that users and stakeholders are separate token holders. But in Polkadot, parachains are the primary users of Polkadot's security, and they have their own accounts with locked tokens on the relay chain. Using Polkadot's lock system, parachains can have their own logic on how to use locked tokens to vote in referendums. Additionally, parachain logic can control individual DOTtokens, yet still allow them to express their voting rights through the parachain. [6] For example, a parachain without its own native token can provide users with a DOT storage address and issue a local representative token for use in the parachain.
In addition to the relay chain, each of Polkadot's parachains has its own runtime and stores its own state. When a validator checks a parachain block, the validator executes the block according to the unique runtime of the parachain to which the block belongs. But to validators, the parachain's runtime is just an abstract "blob" of bytes, a WebAssembly function called an "execute block". In this sense, all parachains look the same. The magic here is that each parachain can implement its own governance logic to update its runtime completely independent of the relay chain. The ability to secure a unique and independent blockchain makes Polkadot a unified network of sovereign systems.
Literature reference
Literature reference
[1] When the system detects malicious behavior, it puts these penalties in a queue before applying them, so there is an opportunity to cancel penalties after detection but before they are applied.
[2] Council proposals come with a base-based pass threshold, such as "16/23", so an abstention is equivalent to a veto.
[3] In a contested situation, the council can only cancel a proposal once, so the public can still override the council by voting again on the canceled proposal.
[4] This deserves a fat footnote because in the Introduction I used the example of a false democracy to make an argument that one's vote must have some power. Blockchains cannot hold one-person-one-vote elections, and they cannot be permissioned at the same time. Blockchains cannot understand citizenship the way democracies do;
Instead, the blockchain understands its own token as the primary means of interacting with the outside world. The opposite of this is that a blockchain cannot prevent someone from becoming a "citizen" like a country, meaning anyone can have an opinion. Of course, the decisions made by some global democratic superpower affect your life, but unless you are a citizen, it does not provide you with the means to express your opinion. Anyone can hold Polkadot.
[5] Users can also vote without a lock, but only get 10% of the normal voting strength.
[6] One thing parachains cannot do with these accounts is participate in staking. The opportunity cost of not betting is the cost of leasing a sidechain slot.
