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Governance

The xx Network uses stake-based governance based upon the standard governance within the Substrate Ecosystem.

The primary goal of governance is to allow the network to evolve over time at the direction of the network's stakeholders. Fundamentally, governance strives to balance the will of the coin holders with the needs of a user-driven blockchain.

In general, there are three structures within the platform for decision making:

  1. The Coin Holders
  2. The Council
  3. The Technical Committee

The general flow of the network is that the coin Holders elect the Council, and the Council elects the Technical Committee. Thus, the coin Holders are the root of all authority within the xx Network.

Coin Holders use their coins to nominate nodes, pass referenda, and elect the Council.

Boxed values are configurable and subject to change before release or by governance.

Referenda​

Referenda are changes to the network. Each referendum is a proposal to alter anything from network parameters, code, or state all the way to triggering a hard fork of the network.

In general, there are three types of referenda:

  1. Public Referenda: Referenda submitted and propagated by coin holders
  2. Council Referenda: Referenda submitted by the Council
  3. Scheduled Referenda: Referenda triggered as part of a previously passed referenda

Outside of fast-tracked referenda (see the section below), only one referendum is active for voting at any given time. These referenda occur in a fixed time window that will be, on network launch, 7 days. All referenda are binary, giving voters a choice between either “yay” or “nay.”

All referenda have an enactment delay, a period of time after the referendum is accepted but before it is enacted. Outside of fast-tracked referenda, the enactment period is 7 days.

The network alternates between putting up a public referendum and a council referendum for a vote every 7 days. If only one kind of proposal is waiting to become a referendum, then it is selected regardless of the kind of the previous one.

Proposal Mechanism​

Public Referenda​

Any coin holder can propose a public referendum. To do so, the proposer deposits a number of coins of at least 100 xx coins. Then, any other coin holder may second the proposal by depositing the same amount of coins on the proposal.

The proposal with the highest deposit will be voted on during the next public referenda period (as described above).

The public proposal queue has a maximum size of 100 proposals.

Proposals that become a referendum have a passing threshold that is computed according to the standard positive turnout biasing within the Substrate Ecosystem. In this type of voting, as the turnout increases, the passing threshold for the referendum decreases.

Council Referenda​

Every other referendum period is dedicated to proposals put forward by the Council. Council members vote internally on a motion and when it is approved, it becomes a referendum. Depending on the support found within the Council when passing the motion, the Council proposed referendum has different voting requirements.

  • Majority

    When a simple majority (>50%) of Council members approves the motion, the resulting referendum has the same passing threshold as for public referenda (described above).

  • Supermajority

    When a supermajority (>60.0%) of Council members approves the motion, the resulting referendum has a simple majority passing threshold. meaning that it requires >50% of positive votes to pass.

  • Unanimity

    When all members of the Council support approve a motion, the resulting referendum has a passing threshold computed according to the standard negative turnout biasing within the Substrate Ecosystem. Negative turnout biasing is a voting system where the rejecting threshold for the referendum decreases as the turnout increases.

Any member Technical Committee can veto a Council referendum. However, the veto only applies once to any unique referendum, and for a cool-down period of 7 days. After this period, the same referendum can be resubmitted.

Fast-Track Referenda​

The Technical Committee has the power to fast-track Council referenda that were passed with either supermajority or unanimity. In the fast-track process, the Technical Committee selects the enactment period.

If the Technical Committee has a two-thirds supermajority, the referendum enters a fast-track voting period with a minimum of 3 hours. If unanimity is achieved, a voting period smaller than 3 hours is possible.

Proposal Cancellation​

The Technical Committee can cancel any public proposal with an unanimous vote before it becomes an active referendum. Doing so slashes the total deposit associated with the proposal (proposer and seconders).

Referendum Cancellation​

A supermajority, 2/3rd of the Council, can cancel any active referendum. This is designed to be used as a last resort if a malicious referendum is ever brought up to voting.

Council​

The Council is an on-chain representative body designed to represent passive stakeholders within the xx Network. At launch, the Council will have 13 members.

All Council members are selected via the Phragmén election process standard within the Substrate Ecosystem. All coin holders can vote on Council members in each period. These terms will last 7 days. The election selects the 13 Council members and the 10 runners-up, which keep their votes in the election.

The Council has the power to propose referenda (See Council Referenda), control the treasury, cancel Active Referenda, and elect the Technical Committee. Individual members have limited veto power over proposals presented to the Council, but an individual member cannot veto the same proposal more than once.

Treasury​

The treasury consists of funds collected through transaction fees, slashing, staking, and inefficiency (i.e., the network missing the ideal staking ratio). Any coin holder may make proposals to the Council to access funds by staking a minimum of 5% of the request, or 100 coins, whichever is higher. The stake is slashed if the proposal is rejected and returned if it is accepted.

To accept a proposal, at least 3/5th of the Council must support it. The threshold to reject a proposal is a simple majority.

If there are unspent funds at the end of a 24 day treasury period, a portion will be burned. At network launch, this burn rate will be set at 1%.

Along with the proposal system, any coin holder can suggest a tip. Any Council member can back the tip by recommending an amount the recipient of the tip can receive. Once more than half the Council backs a tip, it enters a closing phase where Council members can still submit their backing, but the tip has already passed. Once closed, the amount awarded is equal to the median suggested tip amount.

When tips are started by the public, they must be accompanied by a deposit, and the suggester receives 20% of the total tip award.

Electing the Technical Committee​

A motion with 50% support by Council members can add or remove members from the technical committee. Any referendum can do so as well.

Others​

The Council can perform the following on-chain decisions, requiring different levels of acceptance of its members:

  • 2/3 of the Council can set the on-chain CmixVariables. This includes, for example, points assigned to blocks produced, cMixx rounds completed and penalty for realtime failures; and the geographic multipliers.
  • 3/4 of the Council can cancel a Slash on a validator.
  • 2/3 of the Council can set a Phragmen election solution for the validator set selection, in case of failure of the on-chain election algorithm.
  • Half of the Council can set an identity pallet registrar.

Technical Committee​

The technical committee, as described above, is elected by the Council by a simple majority vote. The technical committee’s primary responsibilities are to manage a series of on-chain values to ensure the proper functioning of the xx Network, veto power of council proposals (as described in Council Referenda, and the ability to fast-track and expedite council proposals (as described above). Any of these on-chain values can also be changed via a referendum.

Cmix Hashes​

The Technical Committee has, with democracy’s permission, the ability to change the on-chain version hashes of the cMixx software and its services. It requires 2/3 approval to enact a change.

At launch, this ability expires after 6 months, and it must be renewed via a referendum.

Economics​

Technical committee unanimity is required to make any changes to the chain's economic parameters: inflation parameters, interest points and liquidity rewards.

Custody​

Technical committee unanimity is required to make any changes to the custody pallet, which includes altering a team member's account and adding/removing custodian accounts.

Staking​

Technical committee unanimity is required to make any changes to Staking parameters, which includes setting the desired validator set size, minimum validator and nominator bonds, minimum commission, etc.

Claims​

Two thirds of the Technical committee is required to move a claim from one ETH address to another.

Bridge​

At MainNet launch a bridge pallet is included but not active yet. Once active, two thirds of the Technical committee is required to make any changes to the bridge parameters, which includes adding/removing resources and relayers.