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IOST On-Chain Governance Proposal Mechanism Taking Effect On July 1

4y ago
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IOST On-Chain Governance Mechanism Taking Effect On July 1, 2020

On May 27th, 2020, IOST held May Global Node Conference and first introduced its On-chain Governance proposal. With no disagreement or objection from our nodes being raised during this period, the proposal is approved and will take effect on July 1 as planned. This mechanism will promote more decentralization in the governance and healthy growth of the IOST ecosystem.

Proposal Process

Round 1: Proposal submission period

  • Top 30 nodes by votes and contribution scores (to be explained later) are eligible to initiate a proposal
  • Nodes initiate a proposal and fill in the proposal form.
  • There is no cap for the number of proposals submitted every quarter.

Round 2: Initial Screening Period

  • The first month of each quarter will be the showcase period to announce the submitted proposals and conduct an initial screening
  • A proposal has to pass this first round of initial screening to enter the final round
  • All elected nodes will each have 1 vote. If more than 50% of the elected partner nodes agree to a proposal, that proposal will enter the voting process; otherwise, it will be withdrawn.

*All elected partner nodes must vote to participate in the construction of the IOST ecosystem; otherwise, they will lose the qualification to receive the contribution rewards for the quarter.

Round 3: Final Voting Period

  • A. The 2nd to 3rd month of each quarter will be the voting period. When yes votes exceed 66.6%, the proposal is approved.
  • B. The IOST Foundation has veto power, and the proposal rejected by the foundation will automatically re-initiate the voting process. There is one exception, that is when yes votes exceed 80%, the proposal will automatically pass regardless of the IOST Foundation’s vote.
  • Note: The amount of voting right one node depends on its staking volume and its contribution to the ecosystem. Voting rights will be updated once every quarter. Within the quarter, changes in the node’s staking volume will not affect its voting right.

How is voting right distributed among nodes?

Voting right is divided into 3 parts:

Voting right of the IOST foundation + Voting right of nodes based on staking volume+ Voting right of nodes based on contribution tier ranking

1. Voting Rights by The IOST Foundation

In 2020 Q3, when the on-chain voting first starts, the foundation will hold 30% of the total voting right and then it decreases by 1% every quarter until reaching 15%, the fixed proportion.

1. From the second quarter after the implementation of this new mechanism, the foundation will evenly distribute 1% of the votes to the elected partner nodes. This process will happen until the 15th quarter, in which the foundation will stop distributing voting rights and keep a fixed amount of 15%.

2. Foundation has veto power. When a proposal has more than 66.6% of the votes but is rejected by the foundation, it will automatically initiate a new round of votes. If it gets more than 80% of the votes, the proposal will pass.

In the 10th quarter, the foundation’s voting rights will only account for 20%. This means the total voting rights of the community and partner nodes will exceed 80%, hence a higher degree of decentralization.

3. In the 15th quarter, the foundation will only have 15% of the voting right.

2. Staking-Based Voting Rights by Nodes

Nodes will initially have 35% of the voting rights based on staking volume and then an 0.5% quarterly increment until reaching 42.5% of voting right.

The staking-based voting power calculation is similar to the income tax calculation.

Example: Let’s assume that there are only 3 elected nodes: A, B, and C in IOST ecosystem. A has 120M IOST, B has 40M and C has 8M。
The voting right based on staking volume of node A is:
10 million*1 + 10 million*0.8 + 20 million*0.6 + 60 million*0.4 + 20 million*0.2 = 58 million
The voting right based on staking volume of node B is:
10 million*1 + 10 million*0.8 + 20 million*0.6 = 30 million
The voting right based on staking volume of node C is:
8 million*1 = 8 million
Node A voting rights = 58 million/ (58 million + 30 million + 8 million) * 35% = 21.145%

On the first day of each round of proposal, the system will take snapshots & allocate the voting right to partner nodes;

3. Contribution-Based Voting Rights by Nodes

Voting right for nodes based on contribution will be 35% initially and then an 0.5% quarterly increase until reaching 42.5% voting rights.

How to calculate voting right based on contribution:

Every time you get tier 1, you will get 8 contribution points

Every time you get tier 2, you will get 4 contribution points

Every time you get tier 3, you will get 2 contribution points

Every time you get tier 4, you will get 1 contribution point

Every time you get tier 5, you will get 0.5 contribution point

1. Nodes who have gained contribution rewards in the past will get voting right based on contribution points according to the above rules.

2. Contribution points from 2019 Q1 will be taken into consideration and accumulated, and will not be cleared.

3. Eg. Node A’s contribution-based voting right =contribution points of node A / total number of contribution points * 35%

4. There are approximately 1,500 contribution points in total since 2019 Q1 with about 300 additional contribution points increased every quarter. Hence, if a node doesn’t continue to contribute, its contribution-based voting right will be eventually diluted.

5. Partners nodes who don’t gain contribution tiers will not have voting rights based on contribution points.

6. The number of contribution points and the voting rights held by the nodes will be calculated on the first day of each round of on-chain voting.

Notes

1. The total voting right for a node = voting right based on staking volume + voting right based on contribution points;

2. There may be more than one proposal per quarter. Voting right for a node won’t reduce when it votes for any proposal within the quarter.

3. IOST plans to implement the on-chain voting system on July 1 and keep improving it.

Join The IOST Community!

IOST’s Node Program is widely praised as the globally leading staking program by numerous blockchain research institutions with attractive returns, low risk, and ease of use are some of the key program highlights. To learn more and participate in one of the world’s top staking program, please visit:

https://www.iostabc.com/producers

If you would like to hang out with the IOST community on chat, social media or to discuss product development, we have something for everyone:

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IOST On-Chain Governance Proposal Mechanism Taking Effect On July 1 was originally published in IOST on Medium, where people are continuing the conversation by highlighting and responding to this story.

4y ago
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