Factom Director Proposal - Comment Period

Would you like to see this draft turned into a formalized Governance proposal?


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Can we go back to the very first point by @Paul B. and to some degree by @Julian Fletcher-Taylor?

Say there's a decision to move all ANO efficiency to 50%. If that decision irks some ANOs the wrong way, the 70% veto doesn't have a lot of value here. If some percentage don't update their servers, we have a problem. The Director could have a mandate to remove them from the Authority Set, but with a high risk of being replaced by yes-men (if replaced at all). That's a complete surrender of the protocol and any decentralization efforts that are supposed to give it longevity and protection against conflicting interests, nepotism and greed.

How do we protect against this, especially in light of @Azn1nvas1on's post?

I've heard the claim that the Director is good for finding consensus. Finding consensus takes time, so there are no fast decisions anymore. That was the only point of having a Director over a Council. What I like about a council is that even at 100% vote power and with strong mandates, it would have that consensus baked in and accounted for when casting a vote.

Choose your endgame carefully.
 
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I'm a big fan of directionality, which we've been lacking. I appreciated and voted for the recent governance docs as put forward by Jason and WB in part because I felt we needed to get going somewhere, even if there were some things I didn't 100% agree with. As if to sum Factom in a singular event, the vote went 50-50. I've come to the conclusion that, from my perspective, ad hoc committees haven't been able to drive the protocol forward and find consensus. I find myself agreeing that what we need to do is appoint a director who can set a roadmap and drive the protocol forward.
 
I've heard the claim that the Director is good for finding consensus. Finding consensus takes time, so there are no fast decisions anymore. That was the only point of having a Director over a Council.
Huh, a director will make impopulair decisions and will certainly not do everything based on consensus. The whole point is that a director sets out a direction. Obviously he/she will seek contact with all stakeholders, but there would certainly not be consensus and/or discussion on every aspect and/or decision. That doesn't make sense at all, since then you are simply bolting another role onto the current failing decision making system
 
Niels, would you consider the role?
I think that is not a question to be answered at this point in time. I am not saying a hard no, but I also am not giving people hope (if any) that I would be open to it. I am already very busy with Sphereon and a role like this has impact on a personal and business level and relationships. Besides that there are other factors to consider, so it is not a no, but certainly not a big yes as well.

Are there going to be conflicts of interest between the Director and potential affiliated ANOs?
Assuming the director comes from an ANO, which is fair at this point, yes there will be, there is however a big but.
You want someone with experience. That persoon ideally has a proven track record, which means his/her career/reputation is at stake when taking on a role like this.

First of all in deciding to accept it, some questions need to be answered: "Isn't it a lost cause already? Is current system capable of being bent into something that works? Are parties willing enough to change?". If somebody believe these questions could be answered in a positive manner and would choose to run or accept the role, you get into situation that his/her reputation and career would be on the line if you would see something like nepotism happening. Especially when you have 20 smallish part-time teams mostly that kinda act as a board, given they have ultimate power over the role, whilst the role is there to bring change to these exact parties and the protocol. A director would make sure that he/she makes these decisions, has a discretionary budget/mandate, but at the same time provides transparency about expenses, including providing reasons, to prevent any possibility of accusations being made.
 
Can we go back to the very first point by @Paul B. and to some degree by @Julian Fletcher-Taylor?

Say there's a decision to move all ANO efficiency to 50%. If that decision irks some ANOs the wrong way, the 70% veto doesn't have a lot of value here. If some percentage don't update their servers, we have a problem. The Director could have a mandate to remove them from the Authority Set, but with a high risk of being replaced by yes-men (if replaced at all). That's a complete surrender of the protocol and any decentralization efforts that are supposed to give it longevity and protection against conflicting interests, nepotism and greed.

How do we protect against this, especially in light of @Azn1nvas1on's post?
Obviously a director needs to come up with a solid plan ensuring most parties will fall in line. If they don't and wouldn't update it means they risk being booted regardless. A change to move towards 50% efficiency for instance doesn't have to mean it needs to be solved in the software immediately. But let's say it does, then parties not wanting to move with what is set out means they will stand out and have to provide their reasons for not falling in line. These have to be damned good reasons for others to not start removing support.

A director role brings in a dynamic that is currently missing. As I explained before, we would probably not be okay with every single decision that will be made by a director, but at the same time it is a rather simple consideration we would be making as an ANO:

- Is a current decision and past decisions for the protocol in the best interest of the protocol and something we can live with as long as the protocol moves on? If no there are 2 options.
  • We decide to leave as an ANO
  • We decide to try to remove the director

For the latter we would need support of the rest of the ANO set, and at the same time it would also mean that either the director or the protocol as a whole would have failed spectacularly. You could say the protocol would have failed at that point. Is simply becomes more apparent instead of it bleeding out more over time as it has been doing till date.

Some ANOs leaving by themselves or more or less being pushed by changes made by a director is a rather logical outcome of going down this route btw.
 
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I'm a big fan of directionality, which we've been lacking. I appreciated and voted for the recent governance docs as put forward by Jason and WB in part because I felt we needed to get going somewhere, even if there were some things I didn't 100% agree with. As if to sum Factom in a singular event, the vote went 50-50. I've come to the conclusion that, from my perspective, ad hoc committees haven't been able to drive the protocol forward and find consensus. I find myself agreeing that what we need to do is appoint a director who can set a roadmap and drive the protocol forward.
Agreed. It exactly shows what is wrong currently and why a proposal like that without proper mandates will not work. It IMO also shows why we need to start at the other end of the spectrum currently and then move into something roughly in the middle.
 
The Director could have a mandate to remove them from the Authority Set, but with a high risk of being replaced by yes-men (if replaced at all). That's a complete surrender of the protocol and any decentralization efforts that are supposed to give it longevity and protection against conflicting interests, nepotism and greed.
Just to be ultrasafe for those that are skimming, this proposal would not give the Director power to remove an ANO from the Authority Set.
 
I think some people may be in denial about how big of an uphill climb Factom is facing. There seems to be a belief that we can survive for 10-15 years and just muddle through this. That's false, as we need buy-side liquidity to actually absorb FCT selling in order to fund growth and development. Our buy-side liquidity is disastrous right now. ANOs aren't buying FCT. Hell, how many ANOs are actually still holding FCT at this point? There's no reason to buy FCT right. There, I said what we all know.

So, in addition to all the other failures that have been detailed ad nauseam at this point (massive price decline, no big exchange listings, developer exodus, stagnant ANOs, broken Governance, Inc bankruptcy, etc), the elephant in the room is actually buy-side liquidity. Without that, we're toast.

Somewhat on that note, Electric Capital puts out an annual "Developer Report." I highly recommend reading the 128-page document. The below slide stuck out to me for obvious reasons. Please let it sink in, because that's us now.

Screen Shot 2020-12-16 at 11.45.18 AM.png


As I've said a few times now, I sincerely appreciate all the work the GWG put in. However, if Factom wants to have a chance of escaping this doom vortex we're in, we need to go the Director route for reasons previously detailed. It's really not even a choice at this point. Our hand has been forced by our current "situation." Let's at least give ourselves a fighting chance. There will be a time and place for something akin to the GWG structure, it's just not right now.
 
Thanks for all the discussions. I’m desperate for change.

We need to a) print FCT, and b) authority for decisions and c) change tokenomics

ASAP

Whatever gets us there quickest. No one is getting anything from this stagnation.

Print 10m and give Niels 50k a month to be Director for a year as he sees fit. Give Who another 50k a month to rewrite the code as he sees fit.

Decide what we need to build - and pay them.

Done.
 
My take is that at this point in time a director would be best vs having consensus for all decisions with the hope to move toward a council w/in a few years. I think this is our best hope. Ultimately ANOs still have the power to change the director if thing goes South.

Hopefully we can get the majority to approve this change this time.
 
There are millions of successful examples of CEO/Director/Manager-like structures leading to success. There are near-zero examples of Governance models like ours leading to success
Most such CEO/Director/Manager successes fail.

Distributed governance exists as a success with Bitcoin, litecoin, and other blockchain projects. Quite a number of successful open source projects don't have formal hierarchical governence.

We have tied ourselves in knots over governance processes and attempts to synthesize a more traditional recession making process out of a distributed protocol.

We didn't deploy all the paths to governence originally envisioned like grantees and EC burns. Staking has been suggested. Not that more voices would make decisions easier.

So what we have been doing is trying to be both decentralized and have formal decision making process.

This leans towards giving up on decentralization. But it would simplify governance processes.

I'd rather make small decisions that can be coated with existing resources. And step by step make significant fixes. For example, unlike here, I make changes to the tokenomics. That's a smallish change. Then bite off the next idea and the next. Stuff that just means we change the code, of issue tokens for listings.

Both paths are possible. If this one fails, I think smaller changes should be made in series that get us somewhere sooner than always trying to get the next vast governance rework approved.
 
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Although we acknowledge the work of some members to get something into motion with regards to governance and a roadmap, I think it is time for people to look critically at the state of the protocol and its stakeholders in general. We have too many absent people in 2-3 man ANOs still collecting FCT at lower efficiencies, not really bringing much back to the protocol.
To pile onto this, I think we eventually need to leave behind the concept that ANOs are parties that "further the protocol" in return for FCT. Ideally we should end up in a place where companies chose to become ANOs because it gives them some influence over the technology platform they are building on, but not as a thing that can finance their whole business. The ANOs should deliver infrastructure and a governance mandate and nothing else. It should not be a huge hassle to be an ANO and the payment should not be stellar either (and I know very well that it is hardly paying off to be an ANO at the moment). Then the grant pool can pay for management, development and outreach and ANOs as well as others can apply or ignore it, as they see fit.

It is food for thought that both Triall and Zoints are being built, without either of the companies trying to become ANOs.
 
@PaulSnow's point is important and I'm glad someone finally mentioned it.

Three months ago, I said this:

34g3gdfs.png


I'll take Doc 002 as the perfect example. Even though the two largest proponents of this Director proposal voted against it because of 'bureaucracy', they will benefit in having a lower approval barrier. Judging by Chappie, it will also help to interpret the poll results as it'll be open to non-ANOs.

Any major change is good, but please don't underestimate the importance of gradually improving the structure for invisible effects instead of slapping on a top layer to mask our faults. We have given you new tokenomics and governance ideas. Draw from it.

If all we have are hares (yes we need them too), we will burn out in six months. The $500k CEO will shrug his shoulders and leave. Likely blame ANOs along the way. And that'll be that, because again, we're stepping into the endgame.
 
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I would suggest a few modifications to the proposal by @Matt Osborne

  • The director decides an efficiency that will be the same for all ANOs that is meant to cover the costs of operating a node, including infrastructure costs and time spent.
    No more "your ANO is at X% efficiency but only does Y and Z" squabbling. ANOs can focus the majority of their time on running their companies, either building commercial solutions on top of Factom or delivering on grant work. Obviously ANOs should have to be paid for the infrastructure services they deliver. On the other hand no reason to pay more or demand more.
  • There is no working group to approve larger decisions, but rather a time lag for expenditures over a certain amount
    Having a working group leads to discussions about who sits there, how they are elected and removed and so on and so forth. It is not needed. Let us put trust in the director. The ANOs can remove the director if he/she underperforms, so obviously the director will not go and do something completely crazy.
  • The standing system amongst ANOs is kept as it is. They can vote each other out or take new ANOs in
    If everyone has the same standing and is not entitled to any special positions within the protocol due to being an ANO, then standing is reduced to a matter of whether an ANO operates their nodes properly, not about what kind of work they are doing on the side. If an ANO does not deliver proper infrastructure other ANOs can remove it. If an ANO does not deliver on grants they can keep on being an ANO, but probably will not get more grants
  • Instead of having a removal procedure for the director, he/she will have to maintain standing, like an ANO. If standing falls below a certain threshold for a certain time a new director will have to be appointed
    Time will be saved when ANOs do not have to be dragged into motions about removing the director. If standing is going down any wise director would reach out to ANOs to understand why and consider if the course should be adjusted.

With those adjustments we could have a very light framework, with the ANOs functioning similar to a board. ANOs can chose to run their servers while focusing on building an outward facing business or can run their servers while going for grant work. Either is fine. On the other hand the director cannot force anyone out, nor force anyone to do work. The director will either have to pay people or talk them into doing things for the protocol, because it will be for their own benefit as well.
There would still have to be well dosed amount of bureaucracy: processes around appointing a director, what happens when a director steps down, approvals by the treasury manager etc. And, as Matt already pointed out, the framework would still have checks and balances with a time lag and a treasury manager for expenditures, as well as certain changes, such as tokenomics, being dependent on ANOs actually agreeing to run the software on their nodes.
 
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Hi @Hinamatsuri some good suggestions, some would be logical conclusions others I think should be left up to a director and should not be made part of this "deal" as to not make it a big thing.

If I would be director (and don't make any conclusions from those), one of the things I for sure would do is address misalignment and current ANO efficiency definitely is a factor in that. Except it should be seen in a larger picture. That is what the director would describe in order to get parties on board. If you make it part of current proposal it become a roadblock.
 
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@PaulSnow's point is important and I'm glad someone finally mentioned it.

Three months ago, I said this:

View attachment 2829

I'll take Doc 002 as the perfect example. Even though the two largest proponents of this Director proposal voted against it because of 'bureaucracy', they will benefit in having a lower approval barrier. Judging by Chappie, it will also help to interpret the poll results as it'll be open to non-ANOs.

Any major change is good, but please don't underestimate the importance of gradually improving the structure for invisible effects instead of slapping on a top layer to mask our faults. We have given you new tokenomics and governance ideas. Draw from it.

If all we have are hares (yes we need them too), we will burn out in six months. The $500k CEO will shrug his shoulders and leave. Likely blame ANOs along the way. And that'll be that, because again, we're stepping into the endgame.
So how many of these small changes have been executed last 9 months?
 
This thread has got me thinking about how we are so radically different than most blockchains, and the direction we have pushed ourselves since M3.

What is very natural for people to do is try and see how the organization is managed. To hold people "accountable". How to get people who actually run the protocol involved in the protocol and get them to make decisions. We really saw this in Bitcoin.

So what is the governance and the priorities in Bitcoin, the massively most successful blockchain in our space?

Pretty much chaos. What is done is ruled mostly by non-binding proposals and arguments. They have no governance documents. So some simple observations.

  • At one point the biggest argument in Bitcoin that split it into multiple chains was the blocksize limits.
  • The miners sort of wanted bigger blocks. More fees, more income.
  • Of course, higher fees are more income too.
  • Miners in China (where the biggest miners were/are/will be) met with Gavin Andreson, and he came back with BIP 101, a proposal to raise the limit to 8 MB
  • Then at the second Bitcoin Scaling conference, some miners from china and elsewhere pointed out that the 8 MB proposal really came from China's view of 8 as lucky. It wasn't really a technical number.
  • The Developers didn't like any size increase, and proposed the complex solution of Segregated Witness.
  • This was hugely controversial, so they added voting to get it activated in the blocks, and got it activated.
  • The Developers won because they did the work and some crude method got it deployed.

Drama in Bitcoin has been constant. They lack "grants". They even lack distributed control (as PoW has been massively centralized for years). The miners don't contribute by any mechanism to development. And developers do what the heck they want (it seems from a governance perspective).

So what if we go the opposite way?

  • Maybe force a minimum efficiency (can do it in code)
  • Allocate tokens to development and/or exchanges and or protocols using Factom for now (a straight up vote by standing parties)
  • Throw away most of the governance red tape we have
  • Put future governance on-chain

So for now we vote as we do, but get an app built to allow ANOs to vote on chain.
When an ANO ticks off enough other ANOs, take a vote and kick them out.

It appeals to many to mimic real world corporations. But a distributed open source project isn't something we have had for 300 years, and it doesn't have the same "physics" of a real world corporation.

Let people earn tokens. Figure out how using Factom for your project can gain you tokens. If the tokens allocated to someone go up in value, GREAT! Quit judging people by how many tokens they earned! But if we feel someone did a bad job, then don't give them tokens anymore!

Make change simple and incremental.

In our current world, we can limit the token supply. Fix efficiency. Add staking. Add on-chain voting. Add on-chain forums. The things we can do are pretty impressive if we were not wasting so much time talking meta, i.e. how do we structure governance so we can know how to build what we need.

If anyone wants to recruit a committee to do something, Let 'em. And when they come back with a code proposal to build what they want, vote it up or down.

A few people who can gather the resources that can actually do the work can absolutely end up looking like a CEO of Factom, just like Adam Back did during the block size revolts of 2014 to 2017. Because he gathered the resources to build his proposal, and gained the support of most of the development of Bitcoin.

We are different, and the nature of Factom can build in more diversity. But as a general rule, we don't have to have all the heavy overhead we have built over the last few years which hasn't gained us much, but has cost many wasted hours of everyone's limited time and resources.

tl;dr
Make the "governance" of Factom about writing code that runs on the blockchain. Get rid of all the formal governance documents and formal processes and formal reporting that almost nobody has time to read and process. Quit tearing everything down like a crypto project is a zero sum game. Accept the chaos which is such an obvious feature of the most successful crypto projects.
 
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If I would be director (and don't make any conclusions from those), one of the things I for sure would do is address misalignment and current ANO efficiency definitely is a factor in that. Except it should be seen in a larger picture. That is what the director would describe in order to get parties on board. If you make it part of current proposal it become a roadblock.
Yeah, not touching efficiency as part of the governance proposal itself definitely makes it more palatable, but boy has this community spent a lot of time fighting over efficiency and how much work each other does or does not do.

Also, did you just sign up to become director?? 😛
 
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