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Preface: There has never been a lack of governance disputes in the history of blockchain. Bitcoin and Ethereum have both had hard forks. Recently, the most controversial ones are Ethereum's ProgPoW and the Steemit voting incident a few days ago. For the growth of any chain, governance disputes are almost inevitable. In the process of disputes, the governance flexibility of different chains and the resilience of the blockchain itself can be demonstrated. This is also the key to whether the blockchain can continue to grow, and it is also an important part of evaluating its value. This article was written by Checkmate and translated by "SIEN" of "Blue Fox Notes". Ethereum is currently deep in the negotiation process regarding the ProgPoW mining algorithm change. It has undoubtedly become a contentious issue as community members rise up against the core developers. In a recent conference call, community members considered the ProgPoW EIP to be a “ninja-approved” EIP. Given that the EIP was thought to have gone cold, this has sparked heated discussions and served as a valuable test of Ethereum’s governance structure. The reading of this is that the ProgPoW controversy is largely focused on discussing Ethereum’s power structure, rather than the technical merits of ProgPoW. In many ways, this controversy is similar to the Bitcoin scaling/SegWit controversy, which lasted for years and ultimately became a question of who actually controls Bitcoin. Is it the users, miners, developers, or economic nodes? Rather than focusing on the technical merits of SegWit. This is a good thing. As Spencer Nunn points out, this is a sign of Ethereum's maturity, reaching the stage of a $30 billion network. (Blue Fox Note: Currently around $25 billion due to price fluctuations) More than $1 billion of this is locked in leveraged, price-sensitive DeFi applications, and there is significant parallel value that relies on its primitives, protocols, and people. Scott Lewis noted that this won’t be the last time a discussion of a contentious and dangerous fork occurs. If all goes according to plan, then the next time there’s a governance dispute on a $300 billion network, it will be even more important to reach a reliable consensus before it escalates into a potential chain split. This article is from an outsider who considers himself relatively knowledgeable about blockchain mechanics and has experience with the Decred project. The purpose of the opinion is simply to provide constructive feedback based on the author's lessons learned from actively participating in the Decred governance process. After observing the way the Ethereum community addressed the issue publicly during the ProgPow debate, it became clear that many thought leaders were “live discussing” the Decred model. The “wish list” was quickly converging to what was needed for a system: *Consensus opinions cannot be gamed *To make meaningful comments, one must have a personal interest in them *The ability to upgrade via consensus, as upgrading the consensus of the Bitcoin model would risk a destructive chain split, which is largely unacceptable in the case of DeFi. In fact, the real inspiration for this article came from seeing the responses from Ameen and MolochDAO, which suggested the need for a coordination system where there needs to be a stake behind every signal, which can be achieved through unforgeable on-chain voting (not necessarily on Layer 1). I think this is very powerful and I completely agree. This article does not attempt to tell Ethereum how to govern, nor does it attempt to undermine the crude consensus model it has adopted. Instead, the purpose of this article is to highlight how the Ethereum community can benefit from the governance principles and tools pioneered by Decred. The first three principles are directly relevant to the discussion according to Decred’s constitution. * Free and open source software - All software developed as part of Decred should be free and open source * Free speech and consideration - Everyone has the right to express their opinions and ideas. All constructive speech based on facts and reason should be considered. * Multi-stakeholder Inclusiveness – Inclusive systems represent a variety of stakeholders and should actively strive to include a variety of different opinions and users. These processes underpin mechanisms for effective and decisive social coordination. Together, they work to give the broader community a meaningful voice within the constraints of distributed ledger technology. The bottom line is that if Ethereum can implement a set of tools that allow for better coordination of “contentious” fork proposals, it could render the supposed “advantages” of its most likely competitor, Tezso, useless. The combination of on-chain and off-chain governance fits with the Ethereum social contract and the path to innovation and DAOs. Ultimately, much of the initial code for the Decred DAO has already been written and tested in product implementations over the years, which will hopefully reduce the risk of others’ efforts. Ideally, this discussion will provide a springboard for new ideas, coordination tools, and processes to safely manage future contentious forks. This solution will hopefully make James Hancock’s job easier and less stressful (by automating much of the work) The following sections discuss tweets and ideas. This is about examples of Ethereum community members saying “I wish Ethereum had x” in terms of social coordination. Overall, the community is gradually focusing on the key elements that make the Decred governance model strong. It is important to remember that Decred's governance model involves both off-chain social contracts and on-chain technology and hard fork capabilities. Decred chooses to provide transparent and common rules of engagement and build tools to facilitate discussion. These principles apply to any blockchain governance model, with the possible exception of Bitcoin. Twitter polls don’t work, and neither do closed conference calls. The latter is actually destructive because it undermines trust in the community, which can’t know the actual impact of their statements on core developers, such as ProgPoW being the latest example. People don’t need to own any ETH to answer Twitter polls. In fact, what will happen if you find that most of the votes come from fans of EOS, Tezos, or Bitcoin, which will only destroy your statistics? It’s in their fans’ best interest to do so. I’m sure the Ethereum community is much larger than 625-2070 people, and I’m also sure the number of people trying to undermine it is even larger. The most powerful approach so far has been the release of EIP-2538, which amounted to a signed petition from many leading product developers and community influencers. The counter-proposal to ProgPoW (EIP-1057) formalized the opposition and certainly made ProgPoW undeniably controversial. If developers and miners collude and push ProgPoW, it is likely to lead to a chain fork, a breakdown of trust, and the reliability of the current governance model. This is obviously an undesirable outcome. Where the EIP process can be praised is for including unforgeable signatures that can carry economic meaning behind their signatures. The MolochDAO signature has a verifiable hash that contains a certain amount of ETH (the root of some hashed state) to support or oppose the change. The list of anonymous signers is a positive step towards privacy, however, the system is easy to game, which requires some cryptographic and behavioral proof of existence for each entity. Pseudonymous accounts make up the majority of DecredDAO, and these people must gradually gain the trust of the community based on their good performance and delivery. Once trust is gained, they can easily communicate through their identity and cryptographic signatures. 2. Clarity of rules and education One of the striking features of the ProgPoW controversy is that very little of the discussion has centered around whether the project actually needs it. A lot of people seem to lack a proper understanding of the technical or game theory issues, and there is little discussion of the merits of either side of this change. There have been some attempts to aggregate support or opposition. However, the discussion on Twitter has tended more toward shouting matches and a lack of understanding of what ProgPoW actually means for blockchains in the long term. As an off-chain governance system, Politeia’s main advantage is that it is a process with clearly defined rules of participation. People know how to actively participate. Decred’s governance rules are clear, which means that even if an issue is controversial, the path to a decision is clear. This process is supplemented by the monthly Decred Journal and the Decred In-depth Podcast, which educate stakeholders. These two media provide stakeholders with a means to track progress and learn the refined details of each change, long before the debate. (Blue Fox Note: In other words, an important part of governance is to explain the changes in things through normal explanations so that everyone can reach a relatively equal level of understanding to facilitate communication. Publicity is an important part of governance) Generally speaking, a subset of the Decred community are regular participants in governance, however, occasionally new and old voices appear at the same time, especially on controversial issues. This shows that they are still paying attention to the issues and jumping in when others do not fully understand their opinions. You can see a lot of similarities with the EIP-2538 signatories. Keep people well-informed, incentivize them, and give them the tools to actively participate. In keeping with game theory, participation must require participants to stake their savings (to achieve a stake) in order to achieve more correct and risk-minimized decisions. Decred is a relatively small network compared to Ethereum and faces challenges in scaling. Ultimately, it is the social contract of the network that needs to scale, and this is true for all distributed ledgers. Education, clear rules of engagement, and acting in one’s own best interest scale well. In contrast, opaque governance and sketchy consensus, while characteristic in many ways, most certainly lead to toxic, unproductive debates that ultimately distract from the real issues at hand. Don’t let toxicity become Ethereum’s governance mechanism. 3. Related to personal interests Bitcoin supporters who are left with only ETHBTC shorts in their portfolios should have close to zero say in Ethereum governance. People who temporarily hold ETH should have mechanisms for them to have a say, but as a collective, those with more signatures are the most powerful. The people working at MolochDAO, Maker, and Compound are important. They are the cornerstone of DeFi, supporting large-scale investment and controlling a large amount of user assets under management. Their voice should be appropriately expanded to provide guidance to the community. Based on a poll published on etherchain.org, miners have expressed support for voting on the ProgPoW migration, with tools to demonstrate consensus. This is where “having a vested interest” becomes important. There are many models for this, each with their own tradeoffs: One CPU, one vote. This leads to miner centralization, especially when ASICs enter the fray (a problem faced by ProgPoW). It also creates a vulnerability to contentious hard forks, since PoW is great at following the rules but terrible at making new ones. *One token, one vote. Generally speaking, it is relatively easy to game the system due to noise, borrowing and selling DAOs. It also tends to achieve authoritative or oligarchic governance, and has great influence on the largest token holders, while at the same time there are few tools to mitigate their influence. (Blue Fox Note: From the Steemit incident, we can see that token voting is easily controlled by super token holders) * Opt in and show us your stake in the process. Make an appropriately sized vote. This is Decred’s model. Incentives are aligned by tying voters’ storage/investment to the success of the chain for an undetermined period of time. Voters must feel the risk of their decisions, and as a result, those with the greatest financial stakes will make rational decisions. Just like ASICs in PoW, validators in PoS, voters are incentivized to protect their investment in their best interest. Ethereum already has more transactions than Decred and Bitcoin today, and while this article doesn’t have the full answer, it does recognize that Eric is asking the same question, and there are undoubtedly enough smart people on Ethereum to work out these tradeoffs and realities. The thorny issue for the Ethereum community is ensuring that very large stakeholders (founders, developers, and ETs) play their part in a clear rulebook set by the community. At the same time, the Ethereum community also faces challenges brought about by rewards in lending and money markets. Ethereum has become a DAO that simply lacks the critical component of an effective mechanism that can mediate contentious issues (external toxicity and chaos). The long-term result is ossification, which at this stage in the game is not ideal given the innovation currently taking place. Bitcoiners always criticize Ethereum (and Decred) for their coordination mechanisms. Ignore them. Let Bitcoin do its thing and become hard money. Decred is the perfect counter-answer to Bitcoin. It embraces human intelligence and makes it deterministic through formalized hive-mind coordination. It sees the world from the perspective of what can be accomplished through teamwork, and time lost through toxic and unproductive arguments. Instead, Decred chooses to educate, inform, and invest money online and on conference calls. From my perspective, there is no harm in adopting a similar model for Ethereum, even if that model only includes unforgeable soft signals generated through on-chain tools. Just give the community a voice beyond node versions and Twitter polls. As a DAO, Decred generally follows Scott's solution path, advocating conservative, informed, and gradual governance and evolution. If no consensus is reached, it maintains the status quo. Controversial or not, Decred makes decisions and delivers. Ethereum already hosts many sub-DAOs, each with its own mandate and economic value. These sub-DAOs can aggregate meaningful votes and calculate actual economic weight behind their decisions. There is no reason why Ethereum cannot create DAOs that issue temporary voting tokens (or equivalent) under the token standard purely for the purpose of approving hard fork consensus changes. By anchoring these tokens into a Politeia instance (similar to Decred's tickets), each representing the aggregated voice of people with the same opinion. Votes come from a large number of sub-DAOs, DeFi applications, and businesses built on Ethereum. This system can most likely be integrated directly into your smart contract wallet interface. Lessons Learned from Decred Overall, the authors see some key lessons that are similar to the Decred model. Some may (or may not) be applicable to Ethereum: *Decred works through a combination of off-chain and on-chain governance mechanisms. Ethereum can build all the on-chain parts (DAO, staking contracts, token standards, etc.) using eth-native technology. The challenge comes from shaping the off-chain social layer. Considering social tools other than Twitter polls and gameable petitions are heard, this will prove fruitful and stimulate further governance innovation. *Toxicity is a waste of time. The article linked above perfectly summarizes the Bitcoin model of consensus through toxicity, and Decred is the perfect reverse vote against it. Toxicity is a defense mechanism, and while used to impose a position, it is generally ineffective. Clarity of signaling is much more powerful, and we have the tools to provide the ultimate transparency and reliability. *The EIP process could be intertwined with systems like Politeia where account identities require a small amount of upfront capital to generate (0.1DCR/0.01ETH), making spamming expensive. Perhaps this scales in proportion to the economic voting/signaling weight an entity seeks. * Create a pool of knowable, trusted, pseudonymous crypto identities. Once MolochDAO, Ameen, Eric, or future heavy metal fan club MetallicaDAO have a verified Politeia identity, voting and reaching a legitimate and unforgeable consensus becomes less of a challenge. Communities often follow these thought leaders (especially MetallicaDAO). *Politeia (or similar) forces developers to educate, inform, and win community support when proposing changes, minimizing unfinished work and reducing the risk of disputes. It also provides a central, uncensorable platform for the community to push back, ask for clarification, and debate when needed. These records are stored for many generations to come as a reference to what we have experienced. *Politeia manages censorship by anchoring conversations into the Decred (or Ethereum) blockchain every hour. If someone’s comment is censored, Politeia publishes the censorship hash along with the administrator’s mandatory reasoning for the censorship as proof that it happened. * Having a vested interest is an important part of governance. The more people who have a vested interest, the more they feel the risk of consensus-level decisions. The secret is to ensure that any capital with voting rights is tied to the decision results judged by the market. How to coordinate with Ethereum's unique token distribution, lending market, and various stakeholder groups remains a challenge. * Triggering a "contentious fork process" only after a certain number of node upgrades and other signaling requirements are met. For example, Decred requires 95% of miners and 75% of stakeholders to upgrade nodes with lazy code before any consensus vote can begin. Perhaps an Ethereum EIP could trigger something after enough identities prove it is indeed controversial. Decred requires 95% of miners and 75% of stakeholders to upgrade their nodes before consensus voting can begin. Ultimately, governance is a very hard problem, and fixing a system in the rearview mirror is even harder. Zcash, Bcash, and now Ethereum are all high-profile projects where governance is on the agenda. As Bitcoin supporters like to say, governance doesn’t exist, but it certainly exists, and it makes or breaks the protocol. As the Ethereum project moves toward PoS, there is an opportunity to consider how this governance system can be built into the social and technical levels to improve the lifecycle of innovation. Ethereum embraces open innovation, why take risks with the Bitcoin model that relies on upgrading nodes to reach consensus? ! Any social consensus mechanism doesn’t even need to be tied to the chain. Just provide your community with a mechanism to provide unforgeable, verifiable proofs of opinion to miners and developers. We are still human, and without people, blockchain is worthless. Stakeholders come in all sizes, and their economic contributions are dynamic, subjective, but usually measurable. The author believes that if the governance of a system that affects everyone becomes centralized, then the system will eventually collapse, as evidenced by countless examples in human history. Decred pioneered the strategy of gamifying good governance to ensure that its value storage properties and innovation potential are enhanced and developed over time. Many of these features may not be directly compatible with ETH1.0, but some software and some principles are definitely compatible, and ETH2.0 will be more compatible. Provide your community with an unforgeable mechanism for legitimate voices to be heard. Instead of relying on counting node versions, deploy Ethereum’s own brand of verifiable signaling. Keep invalid noise out of the system. The trends, patterns, and arguments that the author has observed in the ProgPoW debate seem to have led thinkers to converge on many solutions that Decred has elegantly solved in its own bubble. There are lessons to be learned, and the validity and applicability of these are left for the Ethereum community to ponder. If this article has produced a fruitful discussion, then the author has achieved his purpose. Risk Warning: All articles in Blue Fox Notes cannot be used as investment advice or recommendations. Investment involves risks. Investment should consider personal risk tolerance. It is recommended to conduct in-depth research on the project and make your own investment decisions carefully. |
