Factom Governance Improvement Proposal

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Do you approve this proposal and support the formation of a Working Group for its implementation?


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EDIT: Please also see this update.

When the Governance Working Group originally announced its formation, it had two objectives.
  • Facilitate and improve governance.
  • Perform concurrent work on a full proposal to introduce a new Standing Party.
After the successful Guide removal project, work began to pick up on what is now publicly known as the “GWG proposal”.

Please read it here and please find it attached as a PDF.

The initial version was completed and reviewed internally a while back. In a bid to get some more external feedback on technical aspects, we also brought the proposal to the attention of Kompendium.

Interestingly enough, they had very similar ideas independent of having read the initial GWG version. The similarities were striking enough to warrant collaboration on a merged proposal.

This is the outcome of that partnership. The synergy is there, and in our opinion, many of these changes also reflect long-standing wishes by many other community members. These changes and renovations position the community for growth, improve the rate of development, make the protocol more competitive and foster better use of community resources.

We don’t ask that you agree with every detail. We ask that you recognize the protocol is beyond half measures and that you support a dedicated group working towards creating/revising the necessary documents to enable this proposal.

That next phase would involve all of you. Any people with concerns, suggestions, any who want to roll up their sleeves and help.

For clarity, I will post some bullet points of the major changes. Please do read the full document carefully. There will undoubtedly be questions, we will be here for them. This document will also be cross-posted on other community channels for wider input.

  • Formation of new committees encompassing all key protocol areas
  • Committees get a vote (32%) through representation by an Executive Committee (EC)
  • Appointment of a Community Secretary to facilitate information flow
  • The creation of a community roadmap
  • Committees align eligible grants with the roadmap through sponsorship
  • CHOICE: Standing determinations are either cast exclusively by the EC, or, ANOs maintain their standing votes but will be able to emulate the EC vote to free up time
  • ANOs are ranked into four Standing Categories, each having a different vote weight.
  • ANOs up for removal are subject to a special hearing that considers re-mediation, buy-out or removal
  • Efficiency moves to a two-tier system
 

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Chappie

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Hi guys,

I appreciate all the work that was put toward this governance proposal. I'd like to know, if any of you have could elaborate on these:

1. Lots of ANOs with a lot of commercial potential have seen their standing drop to 40-60% range mainly because of their lack of reporting. Why do you think that these parties are now going to report once per month when they have a hard time doing a report once per year? I fear that this system will not fix this problem and might even exacerbate it. I feel the requirements to be an ANO will simply out weight the reward and we'll see some key ANO drop out instead of simply disengaging on the governance side.

2. How do you envision the buy out option and why wasn't it described more thoroughly?

3. I like the fact that committees would have a bigger voice as it encourage people to engage and influence the protocol's direction

4. Are we dropping the numbers of ANOs permanently to 25 for the time being? Forever ?

5. How is the community secretary going to be chosen ? How much is he going to be paid ? If elected, how many times per year are we going to hold elections ?

Thanks for your time
 
Currently non-development ANOs making some work into Committees or some additional work beyond running servers operate at efficiencies 40-50%, while infrastructure ANOs operate at efficiencies 60-65%.

With proposed model all this ANOs will operate a single server @ 0%, which is equal 1100 FCT.

1. Do we expect infra ANOs to participate in Committees so? Are infra ANOs really interested into bringing any sustainable work into Committees?

2. If we force them to participate, it might create a situation where Committees are ineffective, or there are too many people and many of them inactive.

3. If we are fine that they do only infra and some gov discussions, is it fair for those ANOs who operate in Committees? What the reason to participate in Committees for them if you could move to infra?

4. Or this model doesn't accept infra ANOs at all? There are some talks (publicly and privately) that protocol spends on infrastructure too much, considering token health and usage. @Colin Campbell made a fair statement recently on Discord, that we are like a startup that spends 50k+ USD on servers, while being in loss, and refuses to cut it down.
 
Thanks for the write up.

I like the emphasis on committees and executive power.

I’m concerned at the extra demands on an already disengaged mob.

The proposal leaves the grant pool with lower resources than ever. 94k FCT as per current grant cadence.

If ratified - the executive committee should start an immediate vote on resource allocation. Not begin a further window of opportunity for improvement.
 
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Thank you very much for reading the proposal and your submitting your thoughtful questions. please see responses below following each of your questions. If you feel your questions weren’t’ answered to your satisfaction, please say so and let us talk it out further.

1. Lots of ANOs with a lot of commercial potential have seen their standing drop to 40-60% range mainly because of their lack of reporting. Why do you think that these parties are now going to report once per month when they have a hard time doing a report once per year? I fear that this system will not fix this problem and might even exacerbate it. I feel the requirements to be an ANO will simply out weight the reward and we'll see some key ANO drop out instead of simply disengaging on the governance side.
The proposal is design to maximize incentives for ACTIVE ANO participation in the ecosystem to give the Factom protocol a chance to survive and potentially thrive. Creating an administrative report of an ANO’s own activities once a month should not represent an insurmountable burden; moreover, we expect the addition of the community secretary will likely make the process of capturing value-adding activity even easier. Our aim is for a call to action. We feel this proposal represents a path to improve how the community works, align community resources to create consistent improvements to the protocol, and motivate ANOs to get involved and deliver value to the community.

2. How do you envision the buyout option and why wasn't it described more thoroughly?
The idea of a "buyout" was discussed in a previous governance thread, and is not an important, necessary, or novel part of our proposal. The "buyout" idea is if determined by the EC that that ANO holds critical intellectual property or something of extraordinary value to the success of protocol, the committee could suggest a buyout option on a case-by-case basis. This would likely be rare.

4. Are we dropping the numbers of ANOs permanently to 25 for the time being? Forever?
Nothing is forever and the governance of the Factom community is expected to remain iterative. Given the likely long-term nature of many of the challenges the protocol currently faces, our recommendation to cap ANOs for the reasons provided within the proposal should be understood as a recommendation for the foreseeable future. Our proposed governance would allow for petitioning to expand the number of ANOs if desired in the future. Such a petition would likely be welcomed once many fo the challenges faces the community are overcome.

5. How is the community secretary going to be chosen? How much is he going to be paid? If elected, how many times per year are we going to hold elections?
As stated within the proposal, the Secretary is appointed by the Executive Committee. In practice, this would be like hiring a virtual assistance. It was proposed the position be compensated to provide an incentive for someone to be willing to do the work and improve the EC’s ability to hold the Secretary accountable. The Secretary will likely be the busiest community agent within the ecosystem, and we expect them to provide critically-enabling support to ensure the entire system (namely the committees) receive sufficient support to stay focused and on task so we as a community can accomplish our objectives and progress. Providing a monetary amount might prove useful as it will likely be a difficult and time-consuming role and require much coordination. They will have no vote, make no decisions, and have no standing as to remain politically neutral. The amount would likely be small and determined by the EC; it would likely be paid from committee funds, which would be requested though standard means such as requesting a small operating budget grant through the grant nomination process.

Thank you again, we appreciate your willingness to read the proposal, ask questions, and demonstrate your commitment to make our Factom community stronger.
 
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Thanks for the write up.

I like the emphasis on committees and executive power.

I’m concerned at the extra demands on an already disengaged mob.

The proposal leaves the grant pool with lower resources than ever. 94k FCT as per current grant cadence.

If ratified - the executive committee should start an immediate vote on resource allocation. Not begin a further window of opportunity for improvement.
Hi Colin,

Thank you for reading the proposal and for your questions which are answered below. If these answers don't suffice just say so and we can take the subject further.

"I’m concerned at the extra demands on an already disengaged mob." This proposal seeks to improve engagement, keeps people better informed and ensures consistency of direction. The only demands are: Involvement with roadmap planning, monthly template based reports and whatever participation people want in Committees. Don't forget we free up time in a number of areas and in particular remove the persistent requirement for every ANO to monitor every other ANO.

"The proposal leaves the grant pool with lower resources than ever. 94k FCT as per current grant cadence."
I quickly calculate that with 26 servers at 100% the grant pool gets almost 86k FCT per quarter which is indeed less than 94k FCT. With the maximum number of servers (32) under this proposal generating at 100% we'd create 105K FCT in a quarter. I have checked the previous grant pool sizes which average more that 100K but have been declining with the round due to start on 20 July having 53K FCT. So you make a good point and one we would need to watch carefully during implementation. The proposal does not exclude enabling/expecting certain ANOs to run above 0% regardless of whether they have 1 or 2 servers. In addition, with the proposed contribution system ANOs with excess FCT can contribute to an additional fund. In this way the grant pool can be an assured minimum size but can be larger and even supplemented.

"If ratified - the executive committee should start an immediate vote on resource allocation. Not begin a further window of opportunity for improvement." This could easily be part of the first roadmap and budgeting work.
 
1. Do we expect infra ANOs to participate in Committees so? Are infra ANOs really interested into bringing any sustainable work into Committees?

2. If we force them to participate, it might create a situation where Committees are ineffective, or there are too many people and many of them inactive.

3. If we are fine that they do only infra and some gov discussions, is it fair for those ANOs who operate in Committees? What the reason to participate in Committees for them if you could move to infra?
I really do believe committees are a powerful tool (even more so under this proposal) and its self-organizing capacities should enable anyone to join and be productive. Self-organizing means being creative. This proposal allows for a lot.

  • Committees can opt for a rotation system in both their EC representation or new committee members to avoid being too large.
  • Committees can self-organize into ‘sub-committees’, each having a different internal vote weight to offset the stalemate potential of larger membership.

Sky’s the limit here.

Infra ANOs should be interested to do work and have good reasons to join, because

1. Joining a committee means having a reasonable say in the 32% EC vote
2. I can foresee that not willingly participating in a committee (or being inactive) gets one more easily placed in a lower standing category and therefore at a lower vote weight. That puts more power with those who are active, responsible and willing to actually make decisions.

4. Or this model doesn't accept infra ANOs at all?
This model doesn't make hard, immediate decisions on who is or isn't accepted.

This model places more power in the hands of those who are active, willing to participate and in good standing, at the expense of those who are inactive or unwilling to participate. At the same time we make that additional power as informed as we can through committee expertise.

With some thought, it's not hard to envision how that would develop and what that would mean for the inactive/unwilling parties.
 
This model places more power in the hands of those who are active, willing to participate and in good standing, at the expense of those who are inactive or unwilling to participate. At the same time we make that additional power as informed as we can through committee expertise.
Yeah, I understand this.
But from the reward allocation position it's not fair for those who is active comparing to inactive ANOs.
I believe inactive (infra-only) ANOs will be eventually removed if we ratify this model.

Not telling infra ANOs are not welcome, but that what might happen very likely, so I raised this (not sure if it's problem or not for the protocol).
 
Lots of ANOs with a lot of commercial potential have seen their standing drop to 40-60% range mainly because of their lack of reporting. Why do you think that these parties are now going to report once per month when they have a hard time doing a report once per year? I fear that this system will not fix this problem and might even exacerbate it. I feel the requirements to be an ANO will simply out weight the reward and we'll see some key ANO drop out instead of simply disengaging on the governance side.
Jason gave a comprehensive response, but let me just add a few things.

Reporting will mostly be standardized, so it's as easy as filling out an online form. Once a month really isn't that much to ask, it's been a basic responsibility since M3.

There's again room to think outside the box here. If a party really lacks the time to fill out some forms, then by all means, delegate that responsibility to a community member to do it for you by periodically feeding him or her some info. Meanwhile, consider all the freed up time of not having to track all other 22 ANOs (unless you'd really want to).

I like the fact that committees would have a bigger voice as it encourage people to engage and influence the protocol's direction
Yeah this is the biggest strength in my view. Committees have a big vote and they're motivated to work together through representation by a single EC.

This can and should work.
 
Yeah, I understand this.
But from the reward allocation position it's not fair for those who is active comparing to inactive ANOs.
I believe inactive (infra-only) ANOs will be eventually removed if we ratify this model.

Not telling infra ANOs are not welcome, but that what might happen very likely, so I raised this (not sure if it's problem or not for the protocol).
Hi Anton,

As you may realise the GWG includes both infra and non-infra ANOs.

I would like to emphasise that there is nothing in the proposal which in any way is designed to marginalise infra ANOs. The ethos is very much about what ANOs can contribute (which naturally has to be weighed against their cost to the protocol).

The section in the proposal about standing review hopefully makes it clear that this will be thorough and comprehensive, conducted with sufficient information and considered by qualified, experienced people. In fairness this exposes non-infra ANOs to a high degree of rigour.

ANOs always have and will continue to be able to choose their level of involvement. This could be based on time available, team talent & composition plus a host of other things.
 
As you may realise the GWG includes both infra and non-infra ANOs.
We probably have a different views on what "infra-only" means ;)
For me, infra-only ANOs are those who provide infrastructure and participate in gov discussions. And nothing more.
Active commitments to any Committee/Workgroup and/or development/marketings/etc activities move an ANO to the "not infra-only".
 
Thank you all for the detailed and thorough proposal. I do however have concerns about the continued engagement of these committees amoung a dwindling token price and grant pool. We already have seen this happen with the guides and exisiting committees, so what will be done to ensure committee participation?

The emphasis on subject matter experts within our comittees works for some fields, but I believe part of the reason we have failed in many ways, is that this community does not have experts in some fields such as marketing. We will continue to have the blind leading the blind, wasting tons of FCT along the way.

Also, if the executive committee and their corresponding ANOs voted in favor of a motion, what percentage of the vote would they then hold? I'm weary of an executive committee full of the same people that led us to this current state, now having increased voting weight, again.

I greatly appreciate your commitment to a finding a solution to our governance issues, as the current standing system's implementation has completely torn our community apart.
 
We already have seen this happen with the guides and exisiting committees, so what will be done to ensure committee participation?
Focus on the right people, give committees clear objectives to work towards and make participation meaningful (influence the 32% vote).

In my experience, and I've been in a few committees/WGs now, they work best with a common direction and actual, defined work to perform. As for the Guide system, I continue to believe it didn't need removing. There was nothing wrong with the system, it just had the wrong people.

So with those lessons learned, let's create a new system.

We will continue to have the blind leading the blind, wasting tons of FCT along the way.
The proposed grant system had you in mind every step of the way, because I know of your gripes with the current system. :p It's a massive improvement over the current system. Committees need to pick roadmap objectives and draft operational documents with all of the necessary requirements. That's what incoming bids are based on, and weighed against. That'll take some expertise. A committee without that expertise will struggle to come up with solid operational documents and consequently there will be lack of serious candidates putting up grants for it, or any grants that do come up will struggle to get approved during the grant round.

I would have thought that this kind of multi-level roadmap system with resources in alignment would be right up your alley to prevent that continued waste of FCT. In fact, I'd really like to see you on the committee you'd have the most concerns about.

Also, if the executive committee and their corresponding ANOs voted in favor of a motion, what percentage of the vote would they then hold? I'm weary of an executive committee full of the same people that led us to this current state, now having increased voting weight, again.
Executive Committee representatives follow the committee votes. It's group-based decision with added accountability. Any representative not following the committee vote is easily replaced. That's a clear step up from the former Guide system, and it'll be a clear step up from future tokenholder models that will have the exact same problem.

This can't be solved completely, but can be managed responsibly and I think this is elegant enough.
 
Thank you all for the detailed and thorough proposal. I do however have concerns about the continued engagement of these committees amoung a dwindling token price and grant pool. We already have seen this happen with the guides and exisiting committees, so what will be done to ensure committee participation?

The emphasis on subject matter experts within our comittees works for some fields, but I believe part of the reason we have failed in many ways, is that this community does not have experts in some fields such as marketing. We will continue to have the blind leading the blind, wasting tons of FCT along the way.

Also, if the executive committee and their corresponding ANOs voted in favor of a motion, what percentage of the vote would they then hold? I'm weary of an executive committee full of the same people that led us to this current state, now having increased voting weight, again.

I greatly appreciate your commitment to a finding a solution to our governance issues, as the current standing system's implementation has completely torn our community apart.
Hi Saul,

Thank you for your supportive comments and constructive questions.

You asked ..what will be done to ensure committee participation? My view is that Committee & Working Group participation will lead to increased standing. Increased standing affects presence in the protocol (reduces the risk of deselection) and creates a stronger influence by an ANO in the protocol.

You consider that we have failed in many ways..because the ...community does not have experts in some fields such as marketing. I would expect the proposed Outreach Committee to include a fair representation of marketing experts.

You raise an interesting point about the ANOs associated with Executive Committee members voting. Given that in this proposal the executive committee itself has a weight of 32% we have modelled and considered a number of such issues. If we take a vote in which the Exec and the 4 ANOs of exec members, each in good standing, vote a particular way they will still have less than 40% of the total vote enabling the Standing parties/ANOs to overturn such a vote should they so wish.
 

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Some thoughts:
  1. Big shout out to all who participated in producing this proposal, thank you for your time and energy.
  2. I am wary about the monthly report requirement. Not for myself though. I have been very surprised by the lack of willingness of a bunch of ANOs to report anything. Add to that the current general sluggishness, I feel that requirement is going to cause a lot of friction. What about for instance "suggested monthly reports and mandatory quarterly reports"? (currently there is no formal requirement at all)
  3. There are 2 technical committee, Technology and Diagnostics. I fear we may have some trouble finding enough active people to fill both. Most technically inclined people interested in actively running the tech side of the protocol are in the core committee, and I have to say, that committee has not been overly active the last few months (our last official statement was to remove bug bounty because we couldn't take care of it...)
  4. Not sure about the two tier system for efficiency. Mostly because I don't see an ANO being able to claim it is doing so good that it doesn't have to leave anything for the grant pool. I definitely see the benefits in the simplification of the efficiency system, it's just that 0% efficiency doesn't look a sustainable choice. I think I'd even prefer everybody at 50%. Difference between ANO is then made through grant pool.
  5. I mentioned above things that I am not sold on, but pretty much everything else looks good. My last concern is the work and effort that will be required to implement it in a successful way...
Thanks again!
 
Some thoughts:
I am wary about the monthly report requirement. Not for myself though. I have been very surprised by the lack of willingness of a bunch of ANOs to report anything. Add to that the current general sluggishness, I feel that requirement is going to cause a lot of friction. What about for instance "suggested monthly reports and mandatory quarterly reports"? (currently there is no formal requirement at all.
I’m equally surprised. Unless someone’s running at 100% efficiency, there is a basic requirement for reporting. I don’t care who it is at this stage. You take resources, you report at a set interval. But let's help wherever we can and make it easier. Standardized templates will make a lot of difference. We should also explore the possibility of some kind of delegation.

Standing categories ultimately allow for more advanced standing parties (EC users?) that can have their own set of requirements, possibly with eased governance requirements. Iterative steps, let's get there eventually.

There are 2 technical committee, Technology and Diagnostics. I fear we may have some trouble finding enough active people to fill both.
With our current number of ANOs, we’re not going to run 10-man committees so I believe we can fill all four. Diagnostics is there to allow other committees to do their job. Gather data, analyze it, forward it. See how we’re doing. If there’s any provable progress. Are our efforts paying off? Keeping track of the EC user class as mentioned above?

This keeps the other committees free to work towards their own objectives.

Not sure about the two tier system for efficiency.
We’re removing the entire efficiency debacle and the endless arguing over it. I don’t want to deal with this anymore.

Originally we did have all ANOs set at 50%, with a lower efficiency needing bilateral approval that would last for 30-90 days. Then the approval would need renewing. A unilateral lowering of efficiency resulted in a standing penalty. It would still be a lot of discussion and arguing.

I mentioned above things that I am not sold on, but pretty much everything else looks good
I’m very glad to hear that, coming from you. And yes, there’s effort involved. At the same time we’re making so many things much easier. You no longer need to track every other ANO for updates. Standing votes will be easier too, as you’ll be given the option to emulate the EC vote. This is all technically feasible.
 
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This post, on behalf of the Governance Working Group, is to enable the opportunity for people to anonymously ask questions via the linked Google Form. We will gather these questions over the next few days and provide responses. It is vital that the community are able to get any questions resolved and so we look forward to hearing what you have to say.

 
I appreciate the massive amount of work you guys have put into this. I believe it would likely be an improvement on what we have right now. At the very least it is something different. Given that what we're doing is not working, it may be worth trying.

However, I notice that the proposal lacks any sort of characterisation of the exact problem that it is trying to solve. It is heavy on detail, but light on the bigger picture. My concern is that it misses the wood for the trees. In lieu of an exact characterisation of those problems, I will attempt to submit my own, and in doing so I will outline why I don't think this will ultimately bring the change that we need in order to thrive or, worse, survive.

Much of our current constitution was ordained prior to M3. There were key details that we needed to work out, not least how we interacted and made decisions. Nevertheless, at the root of all that was the federated model. The plan was to introduce standing parties that would be capable of maintaining a balance of power in the protocol. In theory, each would participate meaningfully and, the theory goes, we would achieve a decentralised model of governance that would form the basis for a robust network infrastructure.

However, that vision simply never came to pass. Indeed, we actually have fewer categories of standing party right now than we did at the start of M3 and no realistic hope of adding more in the near future. I believe it was Niels who said that the previous Guide term would be a failure if we were not able to add new standing parties. However, the failure to add new standing parties not only resulted in the failure of the Guide term, but it resulted in the failure of our mission more broadly.

Why is that? It is not for some idealistic notion about democracy and the value of truly decentralised governance, although that is important. No, the reason that it resulted in the failure of our mission more broadly is that a system that attempts to hold itself to account simply doesn't work. It's not that I think anyone is corrupt, it's that I think the entire thing is grossly inefficient. ANOs are network validators, regulators and licensors. We receive 100% of network inflation in return for investing a huge amount of our time in reviewing what we ourselves are doing.

The proposal does go some way to recognising the inefficiency of our current system and attempts to propose a solution to remedy that with the introduction of an executive committee. However, without an understanding of the cause of that inefficiency - which is that we have no outside group with the authority or incentive to regulate the authority set - we are doomed to repeat the same mistake again; we will focus in on ourselves when we should be competing to attract attention and usage. I see no reason that ANOs would suddenly overcome their apathy to invest time and energy into new committees. If they haven't already, why would they now?

If we want to actually fix our problems then we need to identify the cause of those problems. I believe the cause of our problems is that there is no incentive to appeal to stakeholders outside of the authority set, which results in a poor competitive environment and apathy. This proposal does not fix that problem. If this is to be a pivotal moment, we will need to delve much deeper and actually challenge our assumptions about how the authority set works. I don't believe we should iterate on the previous model, i believe we should tear it out and start again.

Delegated proof of stake, or a system akin to DPoS, would be a good starting point for consideration. We don't need to create our own model when we can learn from and imitate the success of others. If ANOs are unwilling or unable to implement such a radical change, then I will support this proposal, but I will not believe in it, and I will not believe in Factom.
 
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@Alex clearly described many of my thoughts. Current gov is inefficient, and almost any update will be better than we have now.

But I also think that we need a radical change, that brings value to the token (I mean voting power) and let regular holders to share the inflation tokens with ANOs.

DPoS is the ideal model for this.
It brings the incentive for ANOs to hold and even buy tokens to have more power.
We can develop it to proportionally share inflation: 50% to stakers and 50% to ANOs, or any other proportion we decide.

Moreover, the inflation IS NOT A PROBLEM. For those who are afraid of inflation, I suggest to take a look on CRO token with 18% annual inflation.

As we are going to make a significant update to the governance, why not to update the protocol and whitepaper? We can set any other inflation than current 63,000 FCT, as the inflation is not our problem right now.

I would rather have a Factom with 18% inflation and staking DPoS, than Factom with ANOs collecting 100% of inflation tokens with decreasing value.

Radical change should happen.
 
To start, the Governance Working Group obviously put a ton of time and thought into this proposal. All your efforts are greatly appreciated. I believe that your work will act as a springboard towards the next iteration of our journey. Much thanks.

@Alex beat me to the punch here regarding GOI's view:

The question that the GWG was solving for was something along the lines of, "How do we optimize the Federated Model?" Like Alex, I think the first question that needs to be answered is, "Is the Federated Model the best model moving forward?"

Answering that question requires us to objectively evaluate the Federated Model's performance over the last 3 years. Here are a few of the conclusions I draw:
  • An ungodly amount of time has been spent by ANOs on Governance, infighting, etc. This is not the recipe for success. We have next to FCT/EC usage after five years. This has to change. We can't continue spending all our time on Governance.
  • We're a Walled off garden to outsiders. There is next to zero incentive for non-ANOs to participate in Factom. For example, why own FCT when they can own something like Tezos and receive an 8% dividend-esque payment a year?
  • Misallocation of FCT funds. Does anyone actually that we have received a positive ROI from every ANO?
  • Poor incentive structure. Does anyone want to argue that ANOs are actually held accountable? We have an ANO that has flat out disappeared, refusing to participate in Governance, yet that ANO still has 40% support? This is laughable.
  • Several months ago, we couldn't even get 5 people to express interest in being a Guide. That speaks volumes.
  • Factom was a top 5 token. Now it's not even in the top 300. Let that sink in. We're obviously doing something wrong.

The Federated Model was a great experiment, the majority of us worked our asses off to try and make it a success. However, it's just not a successful framework. It's time we accept that and cut our losses.

Fortunately, we have a lot of evidence from other projects about what works. We don't need to reinvent the wheel. Like Alex, I am in full support of the Delegated Proof of Stake model (dPOS). To give people a better idea of what this would look like, here's a rough model:

  • The dPOS model would get rid of the ANO walled garden and efficiency entirely. Validators would be required to hold something like 7,500 FCT. Holders of FCT can stake with a validator
    • As a data point, Tezos has around 80% of its token supply locked up in staking. A huge amount of the supply has been taken off the market, which has given the token a very positive upward trajectory.
  • The ANO model, it's complex governance, and the idea of efficiency are eliminated.
  • A decent cut to inflation is needed (math needs to be done on this, we need to make sure validators can still operate somewhat profitably for network security purposes as well as to incentivize new validators/stakers to join Factom.
  • We also need a rebrand
We gave the Federated Model our best shot. It unfortunately did not work out. So, let's use a model that works (dPOS).

Thanks
 
I also want to raise the issue about staking, if we ever decide to implement this.

We have 9 mln tokens in circ supply and we barely know who owns it.
I see many staking blockchains with exchanges dominating as validators and taking lion's share of inflation tokens.

I definitely don't want this for Factom. We even don't know if Polo (Justin Sun) still owns any FCT, where is FCT from Cryptopia, etc.
 
However, that vision simply never came to pass. Indeed, we actually have fewer categories of standing party right now than we did at the start of M3 and no realistic hope of adding more in the near future.
I will argue that the EC is a new standing party category. In fact, the entire introduction of standing categories under this proposal implies you can add more and add whatever requirements you want to them.

The proposal allows for more than it describes. That's what good proposals do.

However, without an understanding of the cause of that inefficiency - which is that we have no outside group with the authority or incentive to regulate the authority set - we are doomed to repeat the same mistake again; we will focus in on ourselves when we should be competing to attract attention and usage.
Again, this is something that our proposal helps enable. Right now the proposed allocation is 32% for the EC, 68% for the ANOs. New categories can shuffle that allocation around.

Iterative steps do matter. What I am reading from some of you is a kind of urgency that's intent on moving from A (apathetic parties with no alignment) to C. (a complete switch in consensus model without any kind of forethought or feasibility study). You're going to come up short for that leap, like many times before, and fall in the pond.

You know you need a step B. Let's not re-invent the wheel, I agree. The wheel is right here in this proposal. Step B is moving to a system that enables more effective decision-making. A system that values expertise. A system that introduces a full-fledged roadmap system with feasibility studies and a grant pool in alignment.

That allows you to move to C. Whatever C is.

I see no reason that ANOs would suddenly overcome their apathy to invest time and energy into new committees. If they haven't already, why would they now?
To focus more effectively on changing the protocol in better ways and under better management. Exactly what you're discussing right here. I see some real enthusiasm. That tells me it's possible, so long as there's a common direction and something to work towards.

That's been extremely lacking over the years. This enables it.

This proposal does not fix that problem. [...] Delegated proof of stake, or a system akin to DPoS, would be a good starting point for consideration
Let's consider it under a structure where we actually take the time to review these things properly. Currently, any DPoS implementation means you surrender control of the network not to a benevolent Executive Committee with 32%, but to two unknown holders at 30%.

This is exactly what our roadmap system is designed for. It's not counter to what you want, at all, it's just a more responsible way to get there.
 
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Thank you all for taking the time to fully read this thoroughly-worked proposal.

For the team who put it together, I assure you no stone was left un-turned in examining the community’s past, present, and desired future; the successes and challenges along the way; and what possible changes/additions could be made to return us to a path to both survive and thrive … heated compromises were all but a daily exchange – this is a good plan.

Thank you also for many of you today sharing your opinions and desires to consider (in the future and hopefully in another forum😊) other consensus models and community organizations. In case you were wondering, a full Factom code rewrite was discussed, and as this proposal suggest, if this is something someday the community (after extensive research) decides to pursue, it could be added to the Factom Community road map and smartly pursued.

Our Factom system of governance hasn’t been perfect and we’ve made a lot of bad decisions that we need to own as a community. There have been many issues – some large, and some small. Our issues haven’t all been systemic, model-driven, or because we failed to do something one thing, but instead, many of our issues were often ANO collective shortsightedness and often apathy. Yes, we’ve had problems, but this proposal looks to keep the best parts of what makes Factom unique and special and either removes those aspects that aren’t working or adds elements that aim to correct or improve our inadequacies. I really do believe this proposal will solve many of the issues cited above and beyond. It will take some effort and I believe we have the talent to do it; from accountability, to resource management, oversight, and deliberate and effective decision making, this proposal provides a detailed path to get us back on track.

We’ll still have some apathy as some ANOs have lost heart, but our new improved system also improves the community’s effectiveness in holding ANO accountable to perform. What really makes this plan truly amazing is the speed of adoption.

One of the guiding principles in putting this proposal together was the requirement for it to be able to be rapidly and affordably put in place. In fact, our existing infrastructure allows these proposal recommendations to be adopted, not is 7 months or 2 years, but in days and weeks.

This proposal provides meaningful major changes across nearly all aspects of how our community will work. This is the bold change we need and desire, or at least need to try. It’s not giving up … it’s what a collective group worked tirelessly over months on to give us a shot at survival and potentially to thrive. There are large shortcomings with every system – our status quo and dPOS the same. There are countless other projects we all could have chosen to work with; the governance and ANO model we have is one that IMO remains a very compelling part of our story; this proposal lays out a great plan to fix what doesn’t work, while at the same time empowering decision making, improving ANOs’ ability to better focus on producing value, creates a sustainable path of funding community objectives, and marries community resources to executing a consensus-driven community road map.

We can make this work and we can do this. Let’s give this a chance to prove it can work.
 
There's a lot of information to digest here, but I didn't see a section on what happens when these committees fail to perform. The idea seems to be that a small group of interested individuals would perform better than the community at large, which means the success of the entire proposal is based on finding the right people to guide the protocol. What happens when a committee fails to live up to their responsibilities? If the answer is that the ANOs in general would have to rise to the occasion to force a change, we are left in a similar position as we are now.

There are 2 technical committee, Technology and Diagnostics. I fear we may have some trouble finding enough active people to fill both. Most technically inclined people interested in actively running the tech side of the protocol are in the core committee, and I have to say, that committee has not been overly active the last few months (our last official statement was to remove bug bounty because we couldn't take care of it...)
That was something that jumped out at me, too. Every single thing listed for the Diagnostics Committee is something that overlaps with the area of the other three, mainly outreach/tech.

A note on the whole efficiency sections, from a code perspective, the efficiency is a really lightweight construct built on top of the chain, it would be very simple to just disable the efficiency code so that every auth node gets a fixed income. That means we could introduce a "protocol efficiency", where we have a set amount of FCT generated, and a certain percentage is split evenly across the ANOs, the rest goes into the grant pool. There is also no technical requirement for payout to be correlated to physical servers, that is just the current way of managing it.
 
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