Abstract
Updating blockchain-based protocols remains a significant challenge. If the community does not come to an agreement, a hard-fork can occur, splitting the blockchain’s community. Previous protocols have provided mechanisms to establish community consensus through the protocol itself, but these protocols either facilitate substantial, infrequent updates, or they allow more frequent but only minor changes. This work offers a mechanism that allows clients to vote by locking tokens, making the clients’ tokens temporarily unavailable in exchange for their vote. This design introduces an economic cost to voting, allowing us to measure both breadth and depth of support. Since there is an economic cost to voting, we wish to make non-contentious issues cheap to pass, but still allow the community to establish agreement on larger, more disputatious proposals. We achieve this property by a ping-pong governance model. An issue is tentatively accepted when it achieves enough votes within a fixed period. The proposal then enters a review period, where the opponents must gather enough votes to veto it. The supporters then have their own opportunity to overrule the veto. This process continues with new voting rounds until one side is unable to exceed the needed threshold, settling the issue. Our simulations show that this model allows the community to come to agreement quickly on popular changes, but still come to resolution when the community is more divided. Finally, we define the ideal properties of a blockchain governance protocol, and evaluate different governance protocols under these criteria.
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Notes
- 1.
Specifically, 0Chain’s protocol features sharders responsible for the long-term storage of the blockchain, and validators whose role is to verify that the sharders are storing what they claim.
- 2.
A pool is an account holding locked tokens, where a smart contract dictates the terms for unlocking the tokens. In the case of the accept and reject pools, the tokens are never unlocked.
- 3.
Token rewards in the reject pool may be weighted differently than tokens in the accept pool. In our discussion of yay and nay votes, the vote tallies are assumed to have been adjusted for their weight already. See Sect. 4.4 for more details.
- 4.
The same analysis would apply to a client voting against a proposal.
- 5.
The Tezos foundation maintained veto power for the initial operation as they evaluated their governance protocol, breaking the fairness property; they have since relinquished that power [16].
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Merrill, P., Austin, T.H., Rietz, J., Pearce, J. (2020). Ping-Pong Governance: Token Locking for Enabling Blockchain Self-governance. In: Pardalos, P., Kotsireas, I., Guo, Y., Knottenbelt, W. (eds) Mathematical Research for Blockchain Economy. Springer Proceedings in Business and Economics. Springer, Cham. https://doi.org/10.1007/978-3-030-37110-4_2
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