# TELEGRAM SPECIAL: EOS GOVERNANCE

summerskinsummerskin Posts: 15 admin

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Mar 28 – Apr 3, 2018 (Part 1 of 3 Part Post)

Disclaimer: These clips were taken from the governance chat and provided to us via a vetted third party. All opinions were part of an ongoing discussion and may not accurately reflect the commentors true stance/opinion on the expressed issues. Editing has been made for clarity.

DISCUSSIONS

CONCERNS ABOUT BLOCK PRODUCERS IN CHINA

Members Mark, Fuzzy, Eddie, Sun Tzu and Jonathan Baha expressed concerns over BPs in China, based on the lack of full property rights in that country, and how Chinese miners have been looking at places like Canada to go mine.

THOUGHTS ON WORKER PROPOSALS

Kevin Rose EOS New York

I would feel more comfortable if the worker proposal process was more defined. Personally, I think an ever filling pool of funds is a bad idea. I think worker proposals should be funded as they are approved as well as a minimum amount in reserve for any time sensitive needs

Yves La Rose - EOS Nation [agrees]

John Chamberlain

Not sure a decision has been made on that (pool) think there's still a lot more detail to come. I like the general idea especially 1% cap but that's not a fixed cap from what I understand.

Kevin Rose EOS New York

Any community member may submit a worker proposal. Any good proposal should require some estimate of funding as well as a project plan from approval to deployment. A very important portion of this, in my opinion, should be the length of time needed to fund the proposal. For example, I propose a network upgrade and it will cost 50k EOS. This network upgrade will take 6 months to complete. 10k EOS is needed to start the project. It can be funded over a period of 50 days and the project can commence of the 10th day.....This way we don’t have a huge disruption in BP funds and the proposal can be funded gradually. This of course assumes the normal 30 day voting/approval process

David P – EOS42

Until an actual defined proposal is released and everybody has certainty on what the role and risk-reward structure now is for BP's and backups, we have nothing further to add to our earlier comments in initial response to all this. I made exactly the point Kevin is eloquently raising again. Until there is definition around the entire process there is just a lot of noise and speculation.

However let's also consider something else very important @thomasbcox - which is this vast quarter of a billion dollars a year worker proposal fund. That needs to be rigorously accountable or this becomes like government which spends wastefully on money it doesn't have to earn and with little accountability for waste.

The current model, every penny we planned to spend on the community was to maximise value add with the system designed and working to ensure we are continually striving to be the best possible with our competitor BP's doing likewise. In that model money isn't going to be wasted, and the projects hopefully driven forwards effectively like private enterprise.

If we now move towards a public benefit fund, we have to ensure that there is a similar level of voter accountability to how this money is used and the projects run.

Robert Allen – eosDAC

Personally my preference would be payments proportional to vote with a few chaos monkeys and free market inflation thrown in.

Mike Thorne

There's a billion dollar war chest. I think some of it should be used for bug bounties. A first-come-first-serve multi-million dollar bug bounty should prove EOS as secure; the bounty will be larger than any potential profits, and you're motivated to give up the vulnerability before anyone else does.

Craig Murray

Yeah I also think it's an interesting idea if some % of the inflation is given to each eos holder who can choose whatever worker proposal he wants to send funding to. Keep the amount small and see how it works. This would be an interesting contrast to the voted proposals we'll have a launch

BLOCK PRODUCER TERM LIMITS

Fuzzy

But even there it keeps coming back to me ....having term limits. No way around it, IMO

Craig Murray

Your suggestion is for the 21 BP's to be knocked back down into the 121 and made standby nodes in a term limiting system? Or removed entirely from the ecosystem?

All positions of power must be shed. I’d say either way could work but I am not sure what the demand would be (though I would assume you may have more than enough potential bps). I also think we could pretty safely set a period of time when BP equipment is considered outdated (N years) and set that as the "term limit"

Mike Thorne

Ooooo. I like this idea!

Kevin Rose EOS New York

If the worker proposal fund is funded with 4% of inflation (or whatever % really) what is the formula for withdrawals? I understand it’s been said that it was commensurate with your votes but some must be left over to fund the proposals. Or are proposals funded when approved and otherwise the pool is fully drained each day?

ARBITRATION COSTS

Mike Thorne

Won't subsidizing arbitration costs be a disincentive to not cause issues to go to arbitration? There might be unnecessary arbitration cases simply because it's free. The cost of arbitration should be paid by the losing party, imho.

Kevin Rose EOS New York

Great point. Needs to be a stake to be lost if your case is frivolous. But isn’t a step of arbitration deciding if the case is even arbitrable? So silly cases would be rejected anyway.

Michael Yeates

They still have to be assessed though

Mike Thorne

There's two options. Both can pay the fee for the evaluation, or evaluation can be free and costs are passed on. Much like a lawyer hearing your case.

Kevin Rose EOS New York

No way am I paying a fee for someone else to bring a case against me. It should be like a smart contract stake.

Michael Yeates

Yeah - eosdac will have weekly 'do you pay for votes' arbitration hearings. We need to keep the costs reasonable

Mike Thorne

Oh, I was thinking if both agreed to the evaluation, and neither knew if they were in the wrong or not, they might agree to split the costs and hedge risk, but this might not happen too often.

Kevin Rose EOS New York

You lock up tokens to begin the process, case is rejected you lose your stake. You win the case arbitration decision is delivered to BPs. You get your stake back and the penalties, whatever they are, are enforced. Actually, case is accepted you get your stake back. Maybe that’s better. But it continues the theme of no transaction fees with EOS. Thoughts?

Mike Thorne

There are ways to buy votes anonymously. Arbitration can't do crap in these cases. Also I hope arbs keep in mind that people can try to discredit BPs by impersonating them, or coming up with an elaborate story that details some conspiracy. There needs to be direct and clear evidence. Vote buying needs to be near impossible inherently in the system to prevent this from being a concern.

Michael Yeates

Step 1, set up a community dapp. Step 2, get friendly with a bp and ask them to fund your project. Step 3, vote for said bp because they are great. Step 4, somehow get the bp to stop supporting you. Step 5, withdraw your vote. Step 6, get an independent party to point out how there is a direct correlation between vote and payment. Bye bye bp

Craig Murray

If we keep bp profits very low, there won't be much money to fund a dapp. That's for worker proposals. Now, voting for bp's who are publicly supporting certain proposals, that's just how the system is designed for work, yeah? If I have a dapp startup and have a proposal for it, obviously I’m going to vote for bp's who are willing to fund it. My impression was, this is by design, expected, and healthy. Yeah?

What happens when arbitration is abused, what happens when someone is caught framing someone, those are questions we need to try to address before they happen in as much as possible

Ramsey

Re: arbitration fees, sorry if I missed some stuff, but the American system (for what it is worth) in commercial arbitration is the parties split all costs for the arbitration and the loser refunds the winners costs. Costs do not include attorney fees which are only awarded where contracts provide for them or from violations of specific laws.

There is a balance where you do not want to make arbitration cost prohibitive or too risky such that people are discouraged from filing over smaller issues and vice versa encouraging bad actors to basically nickel and dime people knowing no one will bother coming after them.

Fuzzy

The difference between blockchain and current real world is arbitration is not transparent, and users have no control over who is arbitrator

Lapapanite

There are also weaknesses in Casper that could be handled way better by mechanisms including arbitration.

For instance, in the case of failure for liveness in Casper their current solution (from what i believe is their latest release on github) is to penalize blindly all validators without detecting who are the wrongdoers, and they are looking at a solution which optimizes a network level utility function they call "protocol utility function". The optimization being made by determining an optimal level of reward/incentive for validators taken as a group- not much in the micro level.

This approach could open the door to insidious exo protocol attacks where the attackers make validation uneconomical what will push innocent validators to withdraw. The only social layer mechanism envisioned being a fork, plus market force, without curating the problem which led to the fork. The inability to identify and exclude validators causing liveness failure can persist in both forks and no guarantee that the market valuation of both forks will be at par with what preceded the attack

The exo protocol attack is also a concern because to make it more costly for the attackers it requires a higher level of coin staked by the validators and for the incentive/reward mechanism to work they need an expected return to be high enough those 2 translate into a higher level of inflation.

Todor

One more thing to add to this: for the core layer to function well, it has to show finality, and show it quickly. EOS is much better than Casper FFG in this regard.

ARBITRATION PRECEDENCE

Kevin Rose EOS New York

This makes me think of another point, how we do we record and refer to precedence?

Michael Yeates

Precedence can be a dangerous thing because we will be upholding social values which change over time

So if you survive a dispute of vote buying can I just keep bringing them at you until I win?

Craig Murray

If you bring no additional information or proof you'll probably be dismissed as un-arbitrable. If you gather more information that would potentially change the outcome, then you can probably appeal for another round of arbitration

Michael Yeates

Someone still has to assess if there is any new information. A vote buying charge is very easy to frame an opponent for imho

Craig Murray

Sure, all calls for arbitration require assessment

Which costs money / time, and needs to scale

BLOCK PRODUCER 1% INFLATION CAP

Thomas "Schelling 1" Cox

I will reveal that today Dan pulled me into another governance session, the upshot of which is, 1. We will publish a Governance Roadmap by late April, and 2. We plan to cap the BPs' portion of inflation at 1%. The thinking is, for most token price ranges, that should more than pay for a BP's costs and leave a very healthy margin, without being so absurdly lucrative as to draw in corruption. Consider, say, an EOS main chain with the same market capitalization as Ethereum, and run numbers. The other 4%+ will go into the worker proposals fund. Community could change it with a vote. It will be in software/configuration, not core code

Fuzzy [agrees]

Depends because over time block producers could potentially get enough voting stake to collectively keep themselves in indefinitely (think OPEC nations). So the thinking about capping at 1% is likely to make this a very low possibility.

Vincent Fillion

It all depends on the token price. The 1% cap Could be a bit dangerous if the cost of the bare metal, cloud storage and human labour is higher than the 1% revenue

David P – EOS42

This completely changes most BP’s intended model to give substantially back to the community in various ways m. For example, now none of the BPs that have declared ongoing development and funding support for Chintai post launch can be expected to do so. My vision of a fee less leasing platform for EOS is over with this decision. Various other goodwill initiatives we had planned also cannot now happen, that’s a shame.

I guess the “worker proposal fund” my best hope of a source for this now. That’s unlikely for ongoing funding though, so token leasing for CPU/bandwidth will now have a cost to all.

Thomas - this needs to be thought through, the whole point of an inflation range and being answerable to voters was to avoid a simplistic cap. The concerns I’m reading are correct in my view, if we want a healthy pool of BP support then 1% will not work unless token prices are high. A cap will likely see BPs who dare to invest to support the network and community with a higher cost base and most vulnerable to a token price crash (which will happen in all crypto as Ethereum is witnessing from its highs).

I don’t think many here want to see rampant greed and excessive profits, but the entire point of the previous system was supposed to be addressed by accountability to voters. If the fear is now concentration of token holdings and associated motivations in various places, a simplistic cap like this is a poor solution to enabling the network to respond dynamically to periods of extreme expansion or economic shocks.

I think we all need to see a finalized new model and proposal before anybody can comment. Having analyzed the economics of a BP and all the potential operational risks including macroeconomic shocks, I had long concluded nobody can tell what percentage inflation is needed at any given time for the network. The built in consensus mechanism of average proposal and voting was to me an elegant solution.

RANDOM REWARDS FOR ACTIVE VOTERS

Fuzzy

Yeh only prob is of course...as always whether the people will ensure those mechanisms stay in place, or if they will let those mechanisms be changed to something not in their best interest. I honestly like the idea of random rewards for active voters. With a cap on how many votes they get. Base it on stake perhaps. Voter apathy is a bit*h. Makes one realize why hegelian dialectic used so often

Rick Schlesinger EOS New York

I get it. But I would really prefer those funds going towards an actual value add product, tool, marketing, etc. BEFORE we just start paying people for participating.

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