“We propose a unique way of achieving maximum representation within the Tezos community by embodying a role for a Protocol Politician in the governance process without any protocol change.”
Satoshi Nakamoto was (is) the figurehead Protocol Politician. He made cryptocurrency a reality through Bitcoin: A Peer-to-Peer Electronic Cash System.
TLDR: This module of DAO Baker (an automated baking management system) focuses on the governance element that enables a zero barrier participation layer and ensures voices from every corner of the Tezos community are registered and heard keeping its augustness. The mission is to make Tezos staking (aka baking) more decentralised with minimal interference from external discretionary entities. If you haven’t read the piece on automated monetary management for baking, we highly recommend reading our previous article.
Tezos as the Digital Commonwealth
Tezos is a self-amending blockchain network with a social contract that incorporates a formal, on-chain governance mechanism for proposing, selecting, testing, and activating protocol upgrades without the need to hard fork. You can read more about the Tezos governance process from this overview by Jacob Arluck.
Bakers Role in Governance
The inflationary reward from Tezos chain validation is a zero-sum redistribution mechanism. It is designed to incentivise token holders to put their tokens to work and secure the network as covered in our last article.
However, on-chain governance is a novel process that evokes potentially transformative notions of user empowerment by deciding how the base protocol must be maintained. In due course, it will self-amend for its continuous guarantee of users interest. Therefore it requires maximum participation across the board collecting feedback from diverse groups it represents.
Current Baker dominated governance process is an ambiguous and shallow practice. There is a risk that Bakers are reduced in practice to limited forms of user deliberation on staking rewards and service fees that rely on simplistic theories of passive income.
As a corollary, existing participation layers are highly inefficient by lacking any meaningful discourse and engagement on a grassroots level with votes being delegated to Bakers by default.
Governance on the Tezos network is primarily carried out by staking entities (aka Bakers), as maintainers of the network. Bakers are also the voters in a Tezos formal upgrade process with their votes proportional to the size of their stake (including delegations).
If you need to cast your vote, you need to be a Baker on the Tezos network which requires a minimum of 1 roll, 8000 XTZ or approx 10,000–15,000 USD at time of publishing. This is a large amount for almost 90% of the world’s population especially considering this an experimental process. Hence, the concentration of votes is held within the hands of a few Bakers who manage a large balance in staking. Compared to the ratio of votes held by small Bakers, this is greatly disproportionate.
Enter the Protocol Politician
Tezos has a continuum governance process by keeping a three month recurring cycle for the amendment process. This gives sufficient time for discourse at various levels on a variety of subjects and proposals which can escalate the urgency if necessary for a user-friendly engagement model. The same way our well-functioning democratic societies conduct civil discourse addressing community needs.
Accountability, Transparency, Participation, and Inclusion
We devised the Protocol Politician role for an effective decentralised representation and efficient capturing of the whole discourse sentiment from a diverse set of stakeholders who have skin in the game. The process focuses on the user with greater attention to accountability and participation to minimize the distance between the XTZ hodler and active protocol participant. This results in engagement on multiple levels empowering the pursuit of financial freedom that guarantees a better socioeconomic outcome.
We require more diversity and freedom of expression in this new socioeconomic experiment by providing unbiased, permissionless engagement for anyone universally.
Protocol Politicians only need to deposit 8 % of the bond amount of one roll to register and seek delegation via the DAO Baker contract.
- Anyone could register as a Protocol Politician by publishing a charter/proposal (a simple description to communicate with the Tezos community) to seek delegation.
- A Protocol Politician needs to receive delegations for one complete roll to qualify for baking rights.
- Upon receiving successful delegations, the Protocol Politician (an individual or a group) with a pseudonymous name of their choosing will then be assigned with a Baker key address by DAO Baker.
Pseudonymity provides accountability and acts as an effective shield from character assassination, so the person can walk unscathed regardless of ideals, opinions and proposal he/she/they submit for enactment.
Sovereign Collectives can be an effective tool for bargaining and lobbying to enforce the will of the community on protocol amendments and act as the first-line defence against any hostile takeover. We have seen a few examples of exchange interference on governance on PoS protocols (EOS, Steemit). This is an active threat looming over Tezos especially since it holds more than $1 Billion USD in asset value with a thriving community.
We highly recommend listening to the recent Nic Carter podcast discussing with Balaji Srinivasan on the broader prospects of Sovereign Collective within a Digital Commonwealth and its potential impact on society.
Currently, Bakers collectively stake more than 80,000 rolls on the Tezos network. If we consider a scenario with a minimum of 20,000 Protocol Politicians with 25% representation on the total number of rolls (1 roll = 1 Protocol Politician) this would have a sweeping impact in the governance process.
We are moving towards community relationship managers to come to existence like how social media managers operate for every business out there. Protocol Politicians could be serving key industry segments (games, Defi, STO) representing their Dapps.
We will be releasing the codebase and comprehensive implementation details for the governance model in the coming weeks. We would be grateful to have feedback from the community and incorporate those in our feature rollout. DAO Baker is a 100% open source project as a common good.