On-chain Governance in Tezos
In "On-chain Governance in Tezos," we immerse ourselves in understanding how Tezos has revolutionized blockchain governance. Distinct from traditional models, Tezos' governance is not a top-down approach dictated by a central authority but a truly democratic process embedded in the blockchain itself. This module explores the inner workings of this governance model, dissecting its mechanics, democratic principles, case studies, and future implications.
Tezos’ on-chain governance model, a key feature of its blockchain architecture, is a sophisticated, multi-stage process designed for transparent and democratic decision-making. Here’s an enriched explanation of this model:
Five-Stage Governance Cycle
The governance process in Tezos is divided into five distinct stages, spanning approximately 2.5 months in total:
- Proposal Period: Validators, known as bakers, propose amendments to the protocol, with each baker able to inject up to 20 proposals. The proposals are voted on, and the one with the most votes (requiring a minimum of 5% of network votes) moves to the next phase
- Exploration Period: This stage focuses on a single proposal - the one that received the most votes in the previous period. Validators vote (Yea, Nay, or Pass), and two thresholds must be met for the proposal to proceed: a quorum (minimum participation of all network’s voting power) and a supermajority (at least 80% Yea votes)
- Cooldown Period: A period for the community to discuss, test, and scrutinize the proposal in detail without any voting, allowing informed decision-making in subsequent stages
- Promotion Period: Stakeholders cast their final votes on the proposal using the same mechanics as the Exploration Period. Specific quorum and a supermajority of Yea votes are required for the proposal to be accepted
- Adoption Period: The final stage where the proposal, once passed, can no longer be canceled. The ecosystem prepares for the implementation of the new protocol upgrade, which becomes active on the mainnet at the end of this period
Community Involvement and Tezos Agora Forum
Tezos facilitates community engagement in its governance through the Tezos Agora Forum. This platform allows the community to discuss and voice opinions on proposals and features. Both validators and token holders play active roles in governance: validators can vote or inject proposals, while holders can delegate their voting power to validators who align with their views. This inclusive model ensures that Tezos evolves without sacrificing decentralization, as evidenced by its history of major protocol upgrades without any hard forks.
Checks and Balances
The Tezos governance model incorporates checks and balances to prevent dominance by any single entity. The requirement of quorum and supermajority thresholds in the voting process ensures broad consensus is needed for proposals to pass. Additionally, the Cooldown Period offers a necessary pause for contemplation and debate, preventing rushed decisions. The ability for stakeholders to delegate or retract their voting power to different validators based on shared values further democratizes the process.
Tezos’ governance model is grounded in democratic and decentralized decision-making, exemplifying a transformative approach in the blockchain space. This model contrasts starkly with traditional governance models, often centralized around a limited group of developers or founders.
Democratic Governance and Community Involvement
Tezos’ democratic ethos is embodied in the Tezos Ecosystem DAO (Decentralized Autonomous Organization). This initiative, involving entities like Tezos Commons and the Tezos Foundation, utilizes a multisig model for decision-making. It represents an innovative approach to inclusive and democratic blockchain governance. This model sees funding derived from NFT sales and community contributions, with community members encouraged to submit initiatives through Tezos Agora, fostering a participatory ecosystem where every stakeholder has a voice.
Governance Mechanism
Tezos’ governance is managed via an on-chain process, directly incorporated into the protocol’s code. This process enables seamless integration of amendments without the risk of hard forks. In Tezos, “bakers” (validators), who often double as developers, propose protocol upgrades. The weight of their votes is proportional to their staking balance, and non-baker coin holders can delegate their coins to bakers whose views align with their own. This ensures that all stakeholders, regardless of their technical role, can participate in the network’s development.
Protocol Updates as Case Studies
The regularity of Tezos’ protocol updates, approximately every four months, ensures well-planned improvements beneficial to both Tezos and projects built on it. However, this also requires developers to stay abreast of changes and understand their impact. For instance, the Nairobi protocol proposal, currently undergoing voting, aims to increase transaction processing speed (TPS) and improve the gas model, among other updates. These protocol upgrades, approved through on-chain governance, highlight the community’s active role in shaping Tezos’ evolution.
Real-World Implications
Tezos’ governance model, through its regular protocol updates and community-centric initiatives like the Tezos Ecosystem DAO, demonstrates a real-world application of democratic decision-making in the blockchain domain. This model not only fosters a more inclusive and participatory ecosystem but also challenges the conventional governance norms in blockchain technology. The regular involvement of the community in significant decisions, ranging from protocol upgrades to governance changes, highlights the model’s effectiveness in balancing diverse opinions and interests within the community.
Highlights
- Revolutionary Five-Stage Governance Cycle: Tezos features a unique, multi-stage governance process, ensuring transparent and democratic decision-making by its validators and stakeholders.
- Community Engagement via Tezos Agora Forum: Tezos fosters active community participation in governance through platforms like the Tezos Agora Forum, where proposals and features are openly discussed.
- Checks and Balances for Equitable Governance: The governance model incorporates checks and balances, including quorum and supermajority requirements, to ensure broad consensus and prevent dominance by any single entity.
- Democratic Ethos in Ecosystem DAO: The Tezos Ecosystem DAO exemplifies democratic governance, allowing community-driven initiatives and decisions, fostering a participatory ecosystem.
- Seamless Protocol Integration and Amendments: Tezos’ on-chain governance allows for seamless protocol updates without the risk of hard forks, maintaining network unity and progress.
- Inclusive Stakeholder Participation: The governance system empowers all stakeholders, including non-technical token holders, to participate in the network’s evolution through delegation or direct voting.
- Case Studies of Protocol Updates: Regular protocol updates, such as the Nairobi proposal, showcase the community’s active role in Tezos’ continuous evolution and improvement.
- Real-World Democratic Decision-Making Impact: The governance model’s effectiveness is demonstrated by its real-world application, balancing diverse community opinions and interests, and challenging conventional governance norms in blockchain technology.
On-chain Governance in Tezos
In "On-chain Governance in Tezos," we immerse ourselves in understanding how Tezos has revolutionized blockchain governance. Distinct from traditional models, Tezos' governance is not a top-down approach dictated by a central authority but a truly democratic process embedded in the blockchain itself. This module explores the inner workings of this governance model, dissecting its mechanics, democratic principles, case studies, and future implications.
Tezos’ on-chain governance model, a key feature of its blockchain architecture, is a sophisticated, multi-stage process designed for transparent and democratic decision-making. Here’s an enriched explanation of this model:
Five-Stage Governance Cycle
The governance process in Tezos is divided into five distinct stages, spanning approximately 2.5 months in total:
- Proposal Period: Validators, known as bakers, propose amendments to the protocol, with each baker able to inject up to 20 proposals. The proposals are voted on, and the one with the most votes (requiring a minimum of 5% of network votes) moves to the next phase
- Exploration Period: This stage focuses on a single proposal - the one that received the most votes in the previous period. Validators vote (Yea, Nay, or Pass), and two thresholds must be met for the proposal to proceed: a quorum (minimum participation of all network’s voting power) and a supermajority (at least 80% Yea votes)
- Cooldown Period: A period for the community to discuss, test, and scrutinize the proposal in detail without any voting, allowing informed decision-making in subsequent stages
- Promotion Period: Stakeholders cast their final votes on the proposal using the same mechanics as the Exploration Period. Specific quorum and a supermajority of Yea votes are required for the proposal to be accepted
- Adoption Period: The final stage where the proposal, once passed, can no longer be canceled. The ecosystem prepares for the implementation of the new protocol upgrade, which becomes active on the mainnet at the end of this period
Community Involvement and Tezos Agora Forum
Tezos facilitates community engagement in its governance through the Tezos Agora Forum. This platform allows the community to discuss and voice opinions on proposals and features. Both validators and token holders play active roles in governance: validators can vote or inject proposals, while holders can delegate their voting power to validators who align with their views. This inclusive model ensures that Tezos evolves without sacrificing decentralization, as evidenced by its history of major protocol upgrades without any hard forks.
Checks and Balances
The Tezos governance model incorporates checks and balances to prevent dominance by any single entity. The requirement of quorum and supermajority thresholds in the voting process ensures broad consensus is needed for proposals to pass. Additionally, the Cooldown Period offers a necessary pause for contemplation and debate, preventing rushed decisions. The ability for stakeholders to delegate or retract their voting power to different validators based on shared values further democratizes the process.
Tezos’ governance model is grounded in democratic and decentralized decision-making, exemplifying a transformative approach in the blockchain space. This model contrasts starkly with traditional governance models, often centralized around a limited group of developers or founders.
Democratic Governance and Community Involvement
Tezos’ democratic ethos is embodied in the Tezos Ecosystem DAO (Decentralized Autonomous Organization). This initiative, involving entities like Tezos Commons and the Tezos Foundation, utilizes a multisig model for decision-making. It represents an innovative approach to inclusive and democratic blockchain governance. This model sees funding derived from NFT sales and community contributions, with community members encouraged to submit initiatives through Tezos Agora, fostering a participatory ecosystem where every stakeholder has a voice.
Governance Mechanism
Tezos’ governance is managed via an on-chain process, directly incorporated into the protocol’s code. This process enables seamless integration of amendments without the risk of hard forks. In Tezos, “bakers” (validators), who often double as developers, propose protocol upgrades. The weight of their votes is proportional to their staking balance, and non-baker coin holders can delegate their coins to bakers whose views align with their own. This ensures that all stakeholders, regardless of their technical role, can participate in the network’s development.
Protocol Updates as Case Studies
The regularity of Tezos’ protocol updates, approximately every four months, ensures well-planned improvements beneficial to both Tezos and projects built on it. However, this also requires developers to stay abreast of changes and understand their impact. For instance, the Nairobi protocol proposal, currently undergoing voting, aims to increase transaction processing speed (TPS) and improve the gas model, among other updates. These protocol upgrades, approved through on-chain governance, highlight the community’s active role in shaping Tezos’ evolution.
Real-World Implications
Tezos’ governance model, through its regular protocol updates and community-centric initiatives like the Tezos Ecosystem DAO, demonstrates a real-world application of democratic decision-making in the blockchain domain. This model not only fosters a more inclusive and participatory ecosystem but also challenges the conventional governance norms in blockchain technology. The regular involvement of the community in significant decisions, ranging from protocol upgrades to governance changes, highlights the model’s effectiveness in balancing diverse opinions and interests within the community.
Highlights
- Revolutionary Five-Stage Governance Cycle: Tezos features a unique, multi-stage governance process, ensuring transparent and democratic decision-making by its validators and stakeholders.
- Community Engagement via Tezos Agora Forum: Tezos fosters active community participation in governance through platforms like the Tezos Agora Forum, where proposals and features are openly discussed.
- Checks and Balances for Equitable Governance: The governance model incorporates checks and balances, including quorum and supermajority requirements, to ensure broad consensus and prevent dominance by any single entity.
- Democratic Ethos in Ecosystem DAO: The Tezos Ecosystem DAO exemplifies democratic governance, allowing community-driven initiatives and decisions, fostering a participatory ecosystem.
- Seamless Protocol Integration and Amendments: Tezos’ on-chain governance allows for seamless protocol updates without the risk of hard forks, maintaining network unity and progress.
- Inclusive Stakeholder Participation: The governance system empowers all stakeholders, including non-technical token holders, to participate in the network’s evolution through delegation or direct voting.
- Case Studies of Protocol Updates: Regular protocol updates, such as the Nairobi proposal, showcase the community’s active role in Tezos’ continuous evolution and improvement.
- Real-World Democratic Decision-Making Impact: The governance model’s effectiveness is demonstrated by its real-world application, balancing diverse community opinions and interests, and challenging conventional governance norms in blockchain technology.