danielle
Pivian
presstab
Apr '17
Formatted PDF can be found here: http://www.presstab.pw/PivxGovernanceProposal.pdf 14
PIVX Governance Proposal: An Equal Weighted Three-Tier System Comprised of Masternodes, Stakers, and Votenodes
presstab, Core Developer, PIVX
Abstract—A governance system with three equal voting groups, masternodes, stakers, and votenodes. For a proposal to be successful, each group will need to vote yes.
1 Introduction
An open source crypto-currency which takes pride in decentralization should naturally have a decentralized governance system. Such a system should allow users a fair and clearly defined way to vote on important coin parameters and issues.
When first considering governance models, it is easy to come to the conclusion that one person should get one vote. The obvious problem with this is that it allows people that have absolutely no association with the coin to vote. Coin rivals, hackers, etc. would have just as valid of a vote as an honest holder of the coin.
If it does not make sense to use the one person one vote model, then the next logical step would be one coin one vote. Anyone that owns a coin has a vote worth one coin. This brings up its own complications such as how long do you have to own that coin for? Can you make a vote, send the coin to another address giving it another transaction hash and then vote again? Is it possible that many people will create spam votes? Will this still prevent rivals from voting?
A solution to these problems is a governance system that has checks and balances. A three tier governance system will prevent most forms of gridlock by encouraging 3 different voting blocks to find solutions that can be agreed upon by everyone, not just for their own groups economic or political advantage.
This proposal will suggest that PIVX use a three tiered governance system comprised of mutually exclusive groups: masternodes, stakers, and votenodes.
2 Masternodes – 1/3 of the vote
Masternodes play an essential role in the PIVX ecosystem. At the time of writing there are approximately 2,000 masternodes on the PIVX network.
Giving 1/3 of the vote to masternodes will ensure that vote share is given to people that have a large financial incentive for the coin to perform well.
The masternodes group most likely has the smallest human population within the three proposed groups. Although there are about 2,000 masternodes, it is commonly assumed that many people own numerous masternodes. Anecdotal evidence suggest that there may be early PIVX adopters that own 50+ masternodes. On one hand these large masternode holders can be seen as too much concentration of voting power, but on the other hand large holders that have been with the coin a long time (or maybe even new holders that bought in and acquired a large amount) should have a lot of voting power because they have so much at risk.
Within the three tier voting system being proposed, the potential for large long term masternode holders to dictate the terms of PIVX will be limited to their influence within the masternode group.
3 Stakers – 1/3 of the vote
Stakers arguably play the most critical role in the security of PIVX. The entire coin would cease to exist if the method of consensus (Proof of Stake) were compromised. The benefits of using stakers as a voting group would be the following:
A new user class should be created called a votenode. A votenode will have very similar properties to a masternode, but will be much more accessible to the average user. Currently the cost of obtaining a masternode of 10,000 Piv is not accessible to small time users. It is important that average users are able to get as much representation in the voting process without compromising potential exploits of the governance system.
Although the exact details and a parameters of a votenode are not to be decided within this proposal, imagine the following parameters:
In order for a proposal to successfully pass, each group should have the majority of their participants vote yes on the proposal. For example a proposal that has a yes vote from votenodes and masternode but a no vote from stakers would be considered a failed proposal.
One thing to consider is what the definition of majority is for each group. Would a majority be anything over 50% of the vote? It might be wise to notch up to 60% to ensure that it is a clear yes vote for something to get passed. Perhaps it even makes sense to have some type of sub-governance within each group that allows them to determine their own rules for the definition of majority.
6 Mutual Exclusivity
It is important that each of the groups have as little overlap with each other as possible. For example it would be best to prevent a votenode from voting, then staking its coins after it votes. If mutual exclusivity of voting groups does not occur, then it is likely that one of the voting groups could game the system and gain too much voting power.
Apr '17
Formatted PDF can be found here: http://www.presstab.pw/PivxGovernanceProposal.pdf 14
PIVX Governance Proposal: An Equal Weighted Three-Tier System Comprised of Masternodes, Stakers, and Votenodes
presstab, Core Developer, PIVX
Abstract—A governance system with three equal voting groups, masternodes, stakers, and votenodes. For a proposal to be successful, each group will need to vote yes.
1 Introduction
An open source crypto-currency which takes pride in decentralization should naturally have a decentralized governance system. Such a system should allow users a fair and clearly defined way to vote on important coin parameters and issues.
When first considering governance models, it is easy to come to the conclusion that one person should get one vote. The obvious problem with this is that it allows people that have absolutely no association with the coin to vote. Coin rivals, hackers, etc. would have just as valid of a vote as an honest holder of the coin.
If it does not make sense to use the one person one vote model, then the next logical step would be one coin one vote. Anyone that owns a coin has a vote worth one coin. This brings up its own complications such as how long do you have to own that coin for? Can you make a vote, send the coin to another address giving it another transaction hash and then vote again? Is it possible that many people will create spam votes? Will this still prevent rivals from voting?
A solution to these problems is a governance system that has checks and balances. A three tier governance system will prevent most forms of gridlock by encouraging 3 different voting blocks to find solutions that can be agreed upon by everyone, not just for their own groups economic or political advantage.
This proposal will suggest that PIVX use a three tiered governance system comprised of mutually exclusive groups: masternodes, stakers, and votenodes.
2 Masternodes – 1/3 of the vote
Masternodes play an essential role in the PIVX ecosystem. At the time of writing there are approximately 2,000 masternodes on the PIVX network.
Giving 1/3 of the vote to masternodes will ensure that vote share is given to people that have a large financial incentive for the coin to perform well.
The masternodes group most likely has the smallest human population within the three proposed groups. Although there are about 2,000 masternodes, it is commonly assumed that many people own numerous masternodes. Anecdotal evidence suggest that there may be early PIVX adopters that own 50+ masternodes. On one hand these large masternode holders can be seen as too much concentration of voting power, but on the other hand large holders that have been with the coin a long time (or maybe even new holders that bought in and acquired a large amount) should have a lot of voting power because they have so much at risk.
Within the three tier voting system being proposed, the potential for large long term masternode holders to dictate the terms of PIVX will be limited to their influence within the masternode group.
3 Stakers – 1/3 of the vote
Stakers arguably play the most critical role in the security of PIVX. The entire coin would cease to exist if the method of consensus (Proof of Stake) were compromised. The benefits of using stakers as a voting group would be the following:
- Like masternodes, stakers are a class of users that must have a financial incentive for the coin to succeed because they must be active holders of the coin.
- Staking is pseudo-random because of the use of SHA256d in the staking process. This means that no specific staker will be able to easily game the system and be overrepresented within the group.
- The Staking group’s vote could be polled by adding voting information into the block header. Since the staker creates the block, they will have the ability to place their vote in each block that they stake. A formula could be decided on that for example looks at the last 7 days of blocks and sums up the votes over that timespan. This will allow wallets that stake every few days to still be counted in the voting process.
A new user class should be created called a votenode. A votenode will have very similar properties to a masternode, but will be much more accessible to the average user. Currently the cost of obtaining a masternode of 10,000 Piv is not accessible to small time users. It is important that average users are able to get as much representation in the voting process without compromising potential exploits of the governance system.
Although the exact details and a parameters of a votenode are not to be decided within this proposal, imagine the following parameters:
- Like a masternode, a votenode will need to ‘lock up’ a UTXO (unspent transaction out) and hold it for a period of time while being active and available on the network. Instead of requiring a UTXO with a value of 10,000 PIV, a votenode could instead require 100 PIV. This would make a votenode much more accessible to newcomers.
- Votenodes are ideally created for the purpose of voting, but it should also be given part of the rewards that are minted each block in order to encourage votenodes in participating. Currently PIVX has a seesaw reward mechanism setup between masternodes and stakers. A votenode could take a share of the masternode payment each block. An additional seesaw mechanism could be setup between masternodes and votenodes. A votenode should not receive a proportional reward of the Masternode reward (for example since the votenode is 1% the size of a masternode it should not get 1% of the masternode reward) because it should still be economically more profitable to run a masternode which is not only more expensive, but also more important to other aspects of the network.
- Votenodes may have some type of time restrictions added to them. For example, it is beneficial to the network to have as many peers as possible, so if the votenode were required to be online for a certain period of time (maybe 2-7 days) then it would actually be beneficial to the network, instead of a user class that simply exists for the sake of voting.
In order for a proposal to successfully pass, each group should have the majority of their participants vote yes on the proposal. For example a proposal that has a yes vote from votenodes and masternode but a no vote from stakers would be considered a failed proposal.
One thing to consider is what the definition of majority is for each group. Would a majority be anything over 50% of the vote? It might be wise to notch up to 60% to ensure that it is a clear yes vote for something to get passed. Perhaps it even makes sense to have some type of sub-governance within each group that allows them to determine their own rules for the definition of majority.
6 Mutual Exclusivity
It is important that each of the groups have as little overlap with each other as possible. For example it would be best to prevent a votenode from voting, then staking its coins after it votes. If mutual exclusivity of voting groups does not occur, then it is likely that one of the voting groups could game the system and gain too much voting power.