Governance Practice of Ethereum from ProgPow Controversy

Foreword: There has never been a lack of governance disputes in the history of blockchain, so Bitcoin and Ethereum have had a hard fork. The more controversial recently is ProgPoW of Ethereum, and the voting event of Steemit a few days ago. For the growth of any chain, governance disputes are almost inevitable. In the dispute process, the governance elasticity of different chains and the toughness of the blockchain itself can be demonstrated. This is also the key to the sustainable growth of the blockchain and an important part of assessing its value. The author of this article, Checkmate, is translated by "SIEN" of "Blue Fox Notes".

Regarding the changes to the ProgPoW mining algorithm, Ethereum is currently in the depth of the negotiation process. There is no doubt that it has become a controversial issue as community members rise up against core developers. In a recent conference call, community members considered the ProgPoW EIP to be a "ninja approved" EIP. Given that the EIP was deemed to have become cold, this sparked heated discussions and became a valuable test of the Ethereum governance structure.

The interpretation of this situation is that the ProgPoW controversy is largely focused on discussing the power structure of Ethereum, rather than the technical advantages of ProgPoW. In many ways, this controversy is similar to the Bitcoin Expansion / SegWit controversy, which lasted for many years and eventually became a question of who really controls Bitcoin. Is it a user, a miner, a developer, or an economic node? Rather than focusing on the technical advantages of SegWit.

This is a good thing.

As Spencer Nunn pointed out, this is a sign of the maturity of Ethereum, which has reached the stage of a $ 30 billion network. (Blue Fox Note: Due to price fluctuations, it is currently around 25 billion U.S. dollars) Of which more than 1 billion U.S. dollars are locked in leveraged, price-sensitive DeFi applications, and have significant parallel value that depends on their primitives, protocols, and people.

Scott Lewis pointed out that this will not be the last controversial and dangerous bifurcation discussion. If all events proceed as planned, then there may be a $ 300 billion network governance dispute next time, and it will become even more important to reach a solid consensus before upgrading to a potential chain split.

Why write this article?
This article comes from an outsider who thinks he has a relative understanding of the blockchain mechanism and has experience with the Decred project. The purpose of the opinion is only to provide constructive opinions based on the lessons learned by the author from actively participating in the Decred governance process.
During the ProgPow debate, after observing how the Ethereum community addressed issues publicly, it became clear that many thought leaders were "discussing" the Decred model on the spot. The "wish list" is rapidly converging into what a system needs:
* Consensus is not a game
* To make a meaningful statement, there must be vital interests in it
* The ability to achieve upgrades through consensus, due to the risk of destructive chain splitting due to the upgrade of the consensus of the Bitcoin model, which is largely unacceptable in the case of DeFi.
In fact, the real inspiration of this article comes from seeing the response from Ameen and MolochDAO, which shows that a coordination system is needed, and there is a vital interest behind each signal, which can be achieved by unforgeable on-chain voting ( (It doesn't have to be on Layer 1). The author believes that this is very strong and fully agrees.
Purpose of this article
This article does not attempt to tell Ethereum how to govern, nor does it attempt to undermine the rough consensus model it has adopted. Instead, the purpose of this article is to emphasize that the Ethereum community can benefit from the governance principles and tools pioneered by Decred.
According to Decred's Constitution, the first three principles are directly related to the discussion.
* Free and open source software-all software developed as part of Decred should be free and open source
* Free speech and consideration-everyone has the right to express opinions and ideas. All constructive statements based on facts and reason should be considered.
* Multi-stakeholder inclusiveness-An inclusive system representing various stakeholders should maintain an active effort to include diverse opinions and users.
These procedures support effective and decisive social coordination mechanisms. They worked together to give the community a meaningful voice within the constraints of distributed ledger technology.
In the final analysis, if Ethereum can execute a set of tools that facilitate better coordination of "controversial" fork proposals, then it can make the so-called "advantage" of its most likely competitor Tezso useless.
The combination of on-chain and off-chain governance is in line with the Ethereum social contract and the road to innovation and DAO. Eventually, Decred DAO has written a lot of initial code and tested it in product implementation over the years, which is expected to reduce the risk of others' efforts.
The ideal outcome is that this discussion provides a springboard for new ideas, coordination tools, and processes to securely manage future contentious forks. The solution promises to make the work of James Hancock easier and less stressful (by automating most of the work)
Governance observation
The following sections discuss tweets and ideas. This is a case about the Ethereum community members proposing "I want Ethereum to have x" in terms of social coordination. Overall, the community is gradually focusing on the key elements that make the Decred governance model strong.
It is important to remember that Decred's governance model involves both off-chain social contracts and on-chain technology and hard fork capabilities. Decred chose to provide transparent and common rules of engagement and build tools to facilitate discussions.
These principles apply to any blockchain governance model, except perhaps Bitcoin.
Measure consensus
Twitter polls were invalid, and closed conference calls were invalid. The latter is actually destructive, because it destroys the trust of the community, and the community cannot know the actual impact of their words on core developers. For example, ProgPoW is the latest example. People don't need to own any ETH to answer polls on Twitter. In fact, what will happen if you find that most of the votes are from fans of EOS, Tezos, or Bitcoin, which will only destroy your statistics?
It is in their best interest for their fans to do so.
I'm sure the Ethereum community is far more than 625 to 2070 people, and I'm sure there are even more people trying to destroy it.
To date, the most powerful method is the release of EIP-2538, which is equivalent to signing petitions by many leading product developers and community influencers. The opposition proposal to ProgPoW (EIP-1057) made the opposition formally established, and certainly caused ProgPoW to be undeniably controversial.
If developers and miners collude and promote ProgPoW, it is likely to cause a fork of the chain, the destruction of trust, and the reliability of the current governance model. This is clearly an undesirable result.
The EIP process can be praised for containing unforgeable signatures, which may have economic significance behind their signatures. The MolochDAO signature has a verifiable hash that contains a certain amount of ETH (the root of some hash state) to support or oppose changes.
Anonymous signer list is a positive step to achieve privacy protection, however, the system is easy to play, which requires some encryption and proof of behavior for each entity. DecredDAO accounts for the majority of pseudonyms, and these people must gradually gain the trust of the community based on their good performance and delivery. Once trusted, they can easily communicate through their identity and cryptographic signature.
2. Clarity of rules and education
A prominent feature of the ProgPoW controversy is that there is little discussion surrounding whether the project really needs it. Many people seem to lack a proper understanding of technical or game theory issues, and few discuss the advantages of both sides of this change. Some attempts have been made to summarize support or opposition. However, the discussion on Twitter tends to yell, and ProgPoW lacks a long-term understanding of the actual meaning of blockchain.
As an off-chain governance system, Politeia's main advantage is that it is a process and has clearly defined the rules of participation. People know how to actively participate. Decred's governance rules are clear, which means that the path to decision making is clear even if the issue is controversial.
This process is complemented by monthly Decred Journal and Decred in-depth podcasts, which can educate stakeholders. These two media provide a means for stakeholders to track progress and learn the refinement details of each change, well before the point of contention. (Blue Fox Note: That is to say, a very important part of governance is to explain the changes in things through ordinary explanations, and everyone's cognition can reach a relative level to facilitate communication. Propaganda is important for governance component)
In general, a subset of the Decred community are regular participants in governance, however, occasionally new and old voices appear at the same time, especially on controversial issues. This shows that they remain focused on the issue and jump out when others don't fully understand their opinions. You can see many similarities with the signer of EIP-2538.
Keep people's right to know, motivate them, and provide everyone with the tools to actively participate. In order to be consistent with game theory, participation must require participants to invest in savings (to achieve interest) in order to achieve more accurate and risk-free decisions.
Compared to Ethereum, Decred is a relatively small network and faces challenges in scaling. After all, what needs to be expanded is the social contract of the network, which is true for all distributed ledgers.
Education, clear rules of participation, and acting in their own best interests expand well. In contrast, opaque governance and rough consensus, although characteristic in many respects, will undoubtedly lead to toxic, fruitless debates that will ultimately distract the substance of the current issue. Don't let toxicity be the governance mechanism of Ethereum.
3. Related to vital interests
Bitcoin supporters who have only short ETHBTC in their portfolio should have a near-zero say in Ethereum governance.
Those who temporarily hold ETH should have a mechanism for them to get a voice, but as a collective, people with more signatures are the most powerful.
The staff at MolochDAO, Maker, and Compound are important. They are the cornerstone of DeFi, support large-scale investments, and control large user assets under management. Their voice should be appropriately expanded to provide guidance to the community.
Based on polls posted on, miners have expressed support for the ProgPoW migration vote and provided tools to show consensus.
This is where “relevant to vital interests” becomes important. There are many models for this, and each model has its own trade-offs:
* One CPU and one vote. This can lead to miner centralization, especially when ASICs enter the competition (progPoW's problem). It also brings controversial hard fork vulnerabilities, as PoW is excellent at observing rules but bad at making new rules.
* One coin per token. Generally speaking, it is relatively easy to play under the influence of noise, while borrowing and selling DAO. It also tends to achieve authoritative or oligopoly governance and has a large influence on the largest token holders, while at the same time there are few tools to mitigate their influence. (Blue Fox Note: As can be seen from the Steemit incident, token voting is easily controlled by the super token holders)
* Opt in to show us your vital interests. Vote for the right size. This is Decred's model. Adjust incentives by binding voter storage / investment to the success of the chain within an indefinite period of time. Voters must be made aware of the risks of their decisions, and as a result, those with the greatest economic interest will make rational decisions. Just like ASICs in PoW and validators in PoS, voters are motivated to protect their investments in their best interest.
Today, Ethereum already has more transfers than Decred and Bitcoin, but this article does not have a complete answer. However, it can be realized that Eric is asking the same question, and there is no doubt that Ethereum has enough smart people to solve these eclectic and practical problems.
The tricky issue for the Ethereum community is to ensure that very large stakeholders (founders, developers, and ETs) play a role in a clear rulebook developed by the community. At the same time, the Ethereum community also faces challenges brought by borrowing and rewards in the currency market.
4. DAO that becomes DAO
Ethereum has become a DAO, it is just a key component that lacks an effective mechanism to coordinate controversial issues (external toxicity and chaos). The long-term result is rigid, and at this stage of the game, this is not ideal given the innovations currently underway.
Bitcoin supporters have always criticized the coordination mechanism of Ethereum (and Decred). Leave them alone. Let Bitcoin do its thing and become a hard currency.
Decred is the perfect counterattack answer to Bitcoin. It embraces human intelligence and makes it decisive through formalized hive thinking coordination. It looks at the world from such a perspective: what teamwork can achieve, and toxic and useless arguments lose time. Instead, Decred chooses education, notifications, investing money online, and conference calls.
From the author's perspective, using a similar model is not harmful to Ethereum, even if the model only contains unforgeable soft signals generated by tools on the chain. Just give the community a voice outside the node version and Twitter polls.
As a DAO, Decred usually follows Scott's solution path and advocates conservative, informed, and progressive governance and evolution. If no consensus is reached, it remains the status quo.
Whether controversial or not, Decred makes the decision and delivers.
Ethereum has hosted many sub-DAOs, and each sub-DAO has its own responsibilities and economic value. This sub-DAO can aggregate meaningful votes and count the actual economic weight after its decision. There is no reason why Ethereum cannot create DAOs. These DAOs can issue temporary voting tokens (or equivalent tokens) under the token standard purely to approve changes to the hard fork consensus.
Anchor these tokens into a Politeia instance (similar to Decred's ticket), a collective voice of everyone who represents the same opinion. Voting comes from a large number of sub-DAO, DeFi applications and businesses based on Ethereum. The system is likely to be integrated directly into your smart contract wallet interface.
Lessons learned from Decred
Overall, the authors see some key lessons and are similar to the Decred model. Some may (or may not) apply to Ethereum:
* Decred works through a combination of off-chain and on-chain governance mechanisms. Ethereum can use eth native technology to build all on-chain parts (DAO, mortgage contracts, token standards, etc.). The challenge comes from shaping the social layer off the chain. Considering that social tools other than Twitter polls and gameable petitions are heard, this will prove fruitful and stimulate further governance innovation.
* Toxicity is a waste of time. The article linked above perfectly summarizes the consensus Bitcoin model through toxicity, and Decred is the perfect reverse vote against it. Toxicity is a defensive mechanism, and although taken to impose a stance, it is usually ineffective. Signal clarity is even stronger, and we have the tools to provide ultimate transparency and reliability.
* The EIP process can be intertwined with a system such as Politeia, in which the account identity requires a small amount of up-front funds to be generated (0.1DCR / 0.01ETH), which makes the cost of spam high. Perhaps this scales in proportion to the economic voting / signaling weight that entities seek.
* Create a known, trusted, pseudonymous encrypted identity pool. Once MolochDAO, Ameen, Eric or the future heavy metal fan club MetallicaDAO has a verified Politeia identity, it becomes less important to vote and reach a legal and unforgeable consensus. The community often follows these thought leaders (especially MetallicaDAO).
* Politeia (or similar) forces developers to educate, inform the community, and win community support when making changes to minimize unfinished work and reduce the risk of disputes. It also provides the community with an unreviewable central platform that can be returned, requested for clarification, and debated when needed. These records are stored for future generations as a reference to what we have experienced.
* Politeia manages reviews by anchoring sessions into the Decred (or Ethereum) blockchain every hour. If someone's comments are reviewed, Politeia publishes mandatory reasons for review hashing and admin review as evidence of this.
* Participation with vital interests is an important part of governance. People with more immediate interests are more aware of the risks of consensus-level decision making. The secret is to ensure that any voting capital is tied to the outcome of market judgment. How to cooperate with Ethereum's unique token distribution, lending market, and various stakeholder groups remains a challenge.
* Only after a certain number of node upgrades and other signal requirements are met will the "controversial fork process" be triggered. For example, Decred requires 95% of miners and 75% of stakeholders to upgrade nodes with lazy code before any consensus voting begins. After enough identification proves that it is indeed controversial, perhaps the Ethereum EIP may trigger some events.
Before the consensus vote began, Decred required 95% of miners and 75% of stakeholders to upgrade nodes.
in conclusion
After all, governance is a very difficult problem, and it is even more difficult to fix the system to the rearview mirror. Zcash, Bcash, and now Ethereum are all compelling projects, and their governance is on the agenda. As Bitcoin proponents like to say, governance does not exist, but it does exist, and it makes or breaks protocols.
As the Ethereum project shifts to PoS, there is an opportunity to consider how to build this governance system to the social and technical level to improve the life cycle of innovation.
Ethereum embraces open innovation, so why use the Bitcoin model that relies on upgrading nodes to reach consensus? !!
Any social consensus mechanism does not even need to be tied to the chain. Just provide a mechanism for your community to provide miners and developers with an unforgeable, verifiable proof of opinion.
We are still human, and blockchains are worthless without people. Stakeholders vary in size and their economic contributions are dynamic and subjective, but are usually measurable. The author believes that if the system governance that affects everyone is centralized, the system will eventually collapse, which is evidenced by numerous examples in human history.
Decred pioneered the strategy of gamification and good governance to ensure that its value storage properties and innovation potential are enhanced and developed over time. Many of these functions may not be directly compatible with ETH 1.0, but some software and some principles are definitely compatible, and ETH 2.0 will be more compatible.
Provide your community with unforgeable mechanisms so that legitimate sounds can be made. No longer rely on counting node version, but deploy Ethereum's own verifiable signal brand. Exclude invalid noise from the system.
The trends, patterns, and arguments observed by the author in the ProgPoW debate seem to converge the thinker in many solutions to Decred's solutions, which have allowed Decred to solve the problem gracefully in his own bubble. There are lessons to learn, and the effectiveness and application of these are left to the Ethereum community to think about. If this article has had fruitful discussions, then the author has achieved his purpose.
Risk Warning: All articles of Blue Fox Notes can not be used as investment advice or recommendations. Investment is risky. Investment should consider personal risk tolerance. It is recommended to conduct in-depth inspection of the project and make good investment decisions.