An introduction to CENNZnet governance

Intro to Governance

Translations can be found here:

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It’s been a big year for CENNZnet. In the last 12 months, our team have successfully launched staking, CENNZX our decentralised exchange, point and click NFTs, the Emery token bridge and even gone carbon negative! But there is one more important piece of the puzzle left before the year is out: a decentralised community governance system. 

At CENNZnet we have always been driven by the desire to achieve true community ownership and with it, full decentralisation. Now that the stage is set we are ready to begin delivering our protocol level decentralised governance model. Here’s the plan:

 

What is blockchain governance?

Governance as a term describes the processes of decision making within organisation s. National governments to local football clubs all require at least a rough model of governance to determine processes such as:  who is responsible for certain tasks, how are major decisions taken and implemented, where authority is vested (in a select few or distributed among all participants).

Blockchains are no exception; they also need a system of governance in order to make decisions on everything from run-of-the-mill functioning to dealing with a crisis or deciding the direction of development. As a decentralised system, where there is no single party or person who has total control or sway over the network, it is even more crucial that our governance mechanisms are fair and transparent. 

 

On-chain vs off-chain governance

There are two methods of blockchain governance:

Off-chain governance 

Used by most PoW blockchains, off-chain governance requires a majority of stakeholders to agree and make all relevant updates and implementations in unison. These actions are agreed upon using off-chain methods such as conferences, online forums, mailing lists etc. Stakeholders wishing to be involved in governance must use these channels to have their say.

Off-chain governance can be very functional but it poses some major issues. Off-chain formats for decision making often lead to shadow hierarchies where a few powerful and influential people can gain sway over the forum and are the ones making decisions. The other issue is the lack of structure. There are often no clear or easily enforced formats for how to make a decision or enact one once it has been made. Networks using this governance framework can suffer from community apathy as the collective fails to advance its propositions and dithers with decisions. 

On-chain governance

Arguably the most decentralised governance method, and also the newest, uses an on-chain format. On-chain governance is a mechanism that enables a decentralised community to update a blockchain by voting directly on-chain. Members of the chain community can propose changes or updates and have these agreed upon by their peers. As everything from the proposed changes to the voting process is literally coded into the foundation of the chain, the process is entirely transparent and agreed changes can be enacted instantly by the blockchain protocol. 

CENNZnet has chosen to base its governance on the on-chain method. We believe it best delivers our goal of a truly transparent decentralised blockchain community. It allows for equal representation for all our members and, long term, will make CENNZnet more adaptable and progressive as changes and innovations can quickly be instigated. By implementing our on-chain governance method we will be among the first blockchain’s to function with totally on-chain governance. 

 

The roadmap to governance on CENNZnet

CENNZnet will move towards full on-chain governance using a staged roadmap. This is primarily to allow us to complete the Identity module, which will be crucial to enabling our final vision, which will allow all token holders to take part in votes on-chain.

Initial Phase: Elected Council

The first step in our governance development plan will work using an elected council. The council will be able to propose changes to the network. These changes could include anything from altering the colour scheme of cennznet.io to developing new protocols – the sky’s the limit. 

The only rule is that each proposition must have an attached document that explains exactly what the proposal is and how it will benefit the network. Once a proposal or transaction decision has been posted by a member, the rest of the council will vote either for or against the motion. 

If a motion is approved then it will execute on the chain at a pre-agreed time. 

Final Stage: Referendum Model

The final version of the CENNZnet governance model uses almost the same system but as well as an elected council, all token holders who have used the identity module (see the section below) and have staked CENNZ can participate and have their say. 

The process is as follows:

  1. Proposal: Proposals are made by a member of the elected council.
  2. Submit transaction: The council member proposing change will submit a transaction detailing the proposed change.
  3. Council votes: The elected council will then vote on whether the proposed change can proceed or not. If more than 50% of the council vote in favour of the proposal it succeeds. Note: if a council member does not vote it will be counted as a vote against the proposal.
  4. Referendum to CENNZ community: A successful proposal at council stage will then be passed to a referendum vote by the wider CENNZnet community. The community has the power to veto the proposed change if 33% of the community vote to not go ahead with the change. 
  5. Proposal passed or vetoed by community: If the change is passed then it will be executed at a pre-agreed time. If the community vetoes the change it will not proceed.

 

governance process

This process allows the CENNZnet community to have their say over decisions made about the blockchain which will ultimately impact their tokens. Using a system of vetos rather than affirmative votes gears the network to be more proactive. Apathy in voters will not prevent motions from going ahead and if voters subsequently disagree with an approved motion, they can themselves propose to have it rolled back. 

It’s worth noting here that while the votes and proposals will be made on-chain, we expect that there will be alot of discussion about proposed changes and rallying for support in offline channels such as Discord. 

 

The Identity module

The CENNZnet governance model only assigns votes to an authentic identity. This is essential for creating a fair and transparent voting system that includes all our token holders. Any token holder who wishes to be involved in the CENNZnet voting procedure will need to first use the identity module to prove they are a real person. 

The identity module will require the following information to determine token holder identity:

  • Link to a Discord account
  • Link to a Twitter account
  • Proof of minimum stake

This process will mean that voters won’t be completely anonymous. However, it does not require voters to give away private information, it will simply establish enough friction to prevent individuals from registering as multiple voters. 

It’s also important to note that this process, as with anything on the CENNZnet chain, can be altered and changed by subsequent decisions made using the governance model. 

 

When to expect governance on CENNZnet

The first step of the process is to elect our council. There will be more information as to exactly what is expected of the council and what you’ll need to apply to come very soon.

In the meantime, join the CENNZnet governance Discord channel here to stay up to date on all governance news.