The state of Astar governance and our development plans

[hoonkim]

Opening

Dear community,

It has been over a year since Astar Network launched and more than four years since we started building.

It is breathtaking to see how much the ecosystem has grown. Since we started development on Astar Network (previously called Plasm Network), we have aimed to create a public and decentralized smart contract platform that billions of future innovators can rely on. We believe in decentralization because having a democratic platform where innovators and parties who contribute to the protocol can voice their ideas and get rewarded for doing so is the best way to scale the network to achieve our vision. I am working hard to create a governance model that works for the Astar vision and the community culture, which will be my primary focus until the foreseeable future.

I write this post to share with the community how we see Astar’s governance and our plans for decentralizing Astar Network. I hope this clears up any uncertainty and that everything written here is not set in stone. I am always open to discussions and suggestions.

The State of Decentralization

Astar Sudo Key

Let’s first address the elephant in the room. Astar Network did not remove the sudo account. We, the core team at Astar Foundation, are managing the sudo key as a multi-sig wallet that is shared amongst the management team. We are very open about the state of the network or how it’s managed, and we do not intend to remove the sudo pallet at this stage.

We take decentralization and on-chain governance very seriously, as that was our vision from the very start. Because removing sudo signifies the start of decentralizing our network, we do not want to remove it before we can prove to the community that we don’t have any superuser in the network in all senses of the word.

You can find the full sudo calls here for transparency: https://astarnetwork.notion.site/40a578d5c8964de4817066804d660509?v=1c0eaae8c96444fda346fb562f9c8794. I apologize for not making things public and explicit earlier. This was an honest mistake from our side as it flew above our heads. The community deserves to know everything, even if everyone won’t check it.

The last thing we want is to remove sudo and pretend the network has no central authority even though the core team still has the ultimate power. This brings up to my next point.

Polkadot Governance

One of the advantages of being a Substrate-based blockchain is that it has a lot of modules built by the community and other ecosystem players. The pallets used to form Polkadot’s on-chain governance are also part of the publicly available pallets, which means any parachains and Substrate-based chains can use the same governance tools on Polkadot for their networks. Because the Polkadot governance was thoroughly researched, I see many projects being tempted to use the governance tools on Polkadot directly in their networks.

However, we believe that every community and ecosystem is built differently. Therefore, every protocol should have a different governance model that fits its vision.

Based on my observations, many parachains that removed sudo and have a council to promote that they are decentralized are still centralized in practice. Most, if not all, parachains still have a council seat and the tech committee that the core members occupy. The core team still owns the maintainer rights to the GitHub organization, moderation rights to their forums and Discord, exclusive access to their internal workflow, domain ownership, and the final saying in where the project goes. I do not see how a project has functional governance if the major ecosystem players have less power than a single centralized organization.

Achieving a high level of decentralization for a parachain is challenging, and I will be the first to admit that Astar is highly centralized. But we are no more centralized than other networks that removed sudo or introduced democratic council members, as ultimately, the core team still has the final saying. We want to set the right expectation for decentralization and not pretend to be democratic when we are not. So when you see a project that promotes itself to be decentralized, ask, “How are they decentralized?”

My Plans

We take decentralization very seriously, and removing sudo should be the first step toward a functionally decentralized network. When we remove sudo, we are telling the community that there is no ruler of the network; only democracy can decide the fate of the network. We do not wish to remove sudo before the suitable governance model for Astar is publicly announced. This may set the wrong impression that the network is decentralized when in reality, it is not.

Instead, I am carefully researching our unique governance model that will push the network players to expand in the direction that aligns with the Astar vision. This research has been ongoing for more than half a year, and we have been working with various professionals in and out of our ecosystem to model this.

The research has been going very well so far, and we should be able to showcase our full governance model in Q3 of 2023. After that, we will take a quarter or two to implement the model to the runtime, which is when we can remove sudo using our governance model. So expect sudo to be gone by the end of this year or early next year if everything goes well. Though, because of the dependencies involved, I won’t be surprised if this gets delayed.

Also, I want the democratization of Astar to be a community-centric process, which means that I am working on this outside of the Astar Foundation with other parties, and the core members’ opinions of the model will be treated with the same weight as the opinions from the community. Astar governance will not work to satisfy the interest of the Foundation or any other entities.

Exceptions With Sudo

In case of increased external regulatory pressure, we will have to prematurely remove the sudo pallet before the governance model is introduced to the network, as the continuous operation of the network is more important than anything. But in such a case, we will clearly state to our community that even though sudo was removed, our network governance is not fully operational, and we are not decentralized.

The Astar Governance

We don’t want to slap in a bunch of governance pallets from Substrate (or OpenGov) and call it a day. We believe that different networks and ecosystem needs their governance model to make the network function.

So, what type of governance do we want to create? Astar Network is an innovation platform for independent builders and enterprises who wants to program the multi-chain world. So we need a governance model that fits our vision.

Throughout this section, I will outline the core requirements we were looking into when modeling the Astar governance and the high-level features that will form the governance system. Of course, these are just ideas now, and any feedback, concerns, or other suggestions are more than welcome. Nothing is set in stone.

Requirements

• Builders who provide value to the ecosystem should have a more influential voice than the average token holders.
• The community must be encouraged to contribute their ideas and opinions (vote) to the network.
• The council members must have a substantial stake in the growth of Astar Network.
• The community and the average token holders vote with their ideas, and builders vote with their approval.

And other factors that encourage the community to grow and push them in the direction that builders and innovators are heard.

High-Level Features and Model

• Corporate stakeholder council: Most council seats in the Polkadot governance model are occupied by prominent individuals in the network. However, this will not work in Astar, as we want teams and corporations to have a stake in the network. The council members are expected to monitor and participate in the governance process 24/7, which is impossible for a single person. In Astar governance, organizations or teams with substantial influence or stake (ex: Astar Foundation, Startale Labs, Team STEP, etc.) will occupy one seat at the council table. One company, one vote. With this model, you cannot have multiple council seats with people working in the same company and maintain decentralization.
• Governance token: Astar governance will use governance tokens to represent voting power within the network. The governance tokens will be non-transferrable, delegatable, and automatically burnt if not used within a certain era duration after receiving them. So the governance tokens won’t have any monetary value, and participants can vote without any financial implications while the voting power does not accumulate over time. At first, the voting threshold will be based on Polkadot’s governance model, but instead of voting with ASTR tokens, people will vote with the governance tokens. However, token holders can still open a proposal by locking ASTR tokens.
• Build2Vote: How is this governance token distributed if votes require a governance token? I propose that after dApps Staking v3 with staking rankings, governance tokens will be added as part of the reward to the project team. With this system, accounts can only vote on Astar if they build something people support or you stake on a project that allows you to vote. The reward destination account can do one of four things with its governance tokens:
  • Use the gov tokens to vote on a proposal.
  • Delegate the gov tokens to another account.
  • Distribute the gov tokens to its project nominators (and they will be given the same option as the original reward account minus this option).
  • Defer the burning period by half the previous era’s duration so they can vote or decide on something more important.
• On-chain ideathon bounty: On-chain bounty is a great program underutilized in the Polkadot ecosystem. In Astar, we will create a sub-DAO with a treasury funded by the Astar governance payroll. This treasury will be used to fund the ideathon bounty, which is an ecosystem event where anyone (with or without tokens) can participate by submitting their ideas and presenting them in front of the curators. Unlike a traditional hackathon, this is an idea hackathon where participants pitch their ideas and research to improve the Astar protocol, creating a product on top of Astar or a business idea. The participants do not have to program (though they need a lot of research and validation), and they will be rewarded from the sub-treasury if the curators think it’s a good idea that needs a team to work on it. Depending on the team, the winning idea will be converted into an on-chain bounty or a treasury proposal. Details for this mechanism deserve their own post, and I will follow up once the idea develops. But the general idea is to create a systematic way to incentivize people to innovate in the network and contribute to the system without being part of the core team.
• Anonymous voting: One of the major issues with on-chain governance is that everything is public, including who votes to whom. This would be unacceptable in real life, which is one of the reasons why on-chain voting participation is low. In Astar governance, we will use various privacy technologies to enable anonymous voting. This can either use zk on Astar or rely on XCM with Manta. The detailed implementation method is still under research.
• Treasury: Please see The state of Astar governance and our development plans - #19 by hoonkim

You can see that there are a lot of new features that will define the Astar governance model. But the features listed here are not set in stone, and implementing all of them does not mean that Astar is decentralized. Instead, decentralization is a gradual process that requires the community’s involvement. I expect many of the features mentioned here to change over time with community input and testing.

For the scope of the genesis governance (removing sudo), we will introduce the first iteration for the three features listed above (Corporate council seat, governance token, and Build2Vote). The other features will be worked on later when the base governance functions as intended.

What’s Not Finished and Dependencies

• dApps Staking v3.
• List of required pallets for the Astar governance.
• Governance action parameters and values.
• Testing and validation.
• Input from the community.
• Governance for listing and de-listing dApps Staking projects (ideally be done by both governance token holders and the normal token holders).
• Refining the Astar tokeneconomics

Timeline

• 2023 Q2: Astar Governance high-level model and features
• 2023 Q4: Astar Governance “whitepaper” release, test, and validate the model
• 2024 Q1: Code implementation and roll out to ShidenDAO
• 2024 Q2: Improve and roll out to Astar Network (remove sudo before or during this phase)

The ShidenDAO

Some of you may recall the fuss about ShidenDAO. One of the initiative’s objectives was to create a decentralized community culture by having fun events, activities, and discussions through the ShidenDAO that were hard to make public on Astar. This was meant to be the foundation for starting and testing the Astar governance that I envisioned. But due to the lack of a dedicated ShidenDAO driver from our team and my resource, the project went a bit quiet. I wish to solve this issue by having a co-owner of the ShidenDAO with an external party (like another parachain, or example).

I still haven’t given up on ShidenDAO, and everything about Astar governance will be reflected on ShidendDAO first, with slight adjustments to fit the vision of Shiden Network. If you wish to get involved in creating the next biggest DAO, please join the ShidenDAO and help us out there! Innovation starts from the community.

Closing

Currently, I am the sole driver of the Astar governance project with a handful of important external advisors like people from Polkassembly, Parity, Web3 Foundation, and other projects. Although I regularly update the Astar core team with my intentions for the governance model, I want to ensure that the core members’ opinions are treated equally to the community members. This means that most important discussions should happen on public platforms. I will not allow the Foundation to censor my proposal before the community reviews it, as this is how you create a healthy community. But because I am the sole driver, resource constraints will also be a concern. So please understand if I am not as responsive as I wish to be or if I talk more than I do.

[realtakahashi]

I think your idea is a very good idea.
And I think governance is one of the most important things for the community. I don’t have a concrete idea, but I think the most important thing about voting in the community is that the information is symmetrical between voters. In the real world of politics, it has been proven that the results of voting in a state of information asymmetry are not very good. I would also like to think of ways to distribute information correctly to the community.

Let me ask you a question. How are companies selected to participate in the “Corporate stakeholder council”? Are corporate voting rights equivalent to individual voting rights?

[pitcoin777]

That’s an amazing plan! I 100% support everything you posted.
What attracts me more was this part:

@hoonkim

Build2Vote: How is this governance token distributed if votes require a governance token? I propose that after dApps Staking v3 with staking rankings, governance tokens will be added as part of the reward to the project team. With this system, accounts can only vote on Astar if they build something people support or you stake on a project that allows you to vote.

I am really curious to see how all these features will work in practice and I do hope we can set the new governance up as soon as we can. Thanks, Hoon.

[hoonkim]

@realtakahashi

How are companies selected to participate in the “Corporate stakeholder council”? Are corporate voting rights equivalent to individual voting rights?

Thanks for the question.
The genesis council will have to be selected by the core team due to the way how the system works, and it will be our main job to increase the number of corporations or teams to dedicate themselves to contributing to the network. The function of a council in Astar governance will be similar to that of the Polkadot council with adjustments to some parameters. So the council will have their own votes for matters that cannot be resolved with the normal votes, voting for the tech committee, approving the treasury, etc. Of course, the council can vote on normal matters like any other voters if they have any governance tokens. But to earn them, they’ll have to build something that the community wants to support.

[realtakahashi]

Thank you for answering.
I think the reason governance is so difficult is that it is difficult to foresee how the governance will work when the system is designed.
I don’t like fake decentralization. In that sense, I support a governance system with technical committees and councils.
I think a voting system with layers divided according to knowledge level is a mechanism worth trying.
In any case, I would like to see a governance system that allows all layers to respect each other and to be deliberated by the community as a whole.

[Dino]

Thanks for the post @hoonkim!
Glad to see the first real step in this direction.

From my perspective as developer & tech person, regardless of the path we take, we should look into modeling the solution and seeing how it would behave in the real world. Something similar to what’s being done for tokenomics right now.

Simulations are never perfect but they do offer an insight into the problems we might otherwise not see.

[hoonkim]

I agree with you. My next step is to define the list of pallets and parameters we can play around with (voting threshold, cooldown period, etc.) to explore this side.

Having said that, I also want to emphasize that governance is a community culture. We can model the behaviors in the worst-case scenario and, through game theory, incentivize the community to behave as the best actor. But if the community proposals and issues (the qualitative side of the governance) aren’t good and there isn’t enough engagement, to begin with, it’s kinda pointless. Of course, I don’t have an answer for this

[Kabrine]

Sensational the opening of Dialogue, on a delicate theme, more of paramount importance. I welcome the commitment and I am sure that great lessons will come from this new phase for the community. I would just like to understand why I’m alone, apologizing for being rude.

@hoonkim

But because I am the sole driver, resource constraints will also be a concern. So please understand if I am not as responsive as I wish to be or if I talk more than I do.

[Dino]

Such things, I hope, simulations can take into account .
I don’t think we need to consider pallets & parameters immediately, but instead focus on the system as you do in the post. And simulating it.

I’ve read an interesting article today HERE which shows that there are tools for modeling systems with complex actors (I mean, of course there are tools ) so it is something perhaps that can be extended to the governance as well.

[hoonkim]

This is interesting. Let me look into it. Either way, I see a huge value in having simulations for the model.

[Megan]

great post, Hoon. it will be nice to see our networks moving further towards decentralization, and the sooner the better, but there shouldn’t be a need to rush a DAO implementation as it’s not a complete solution in and of itself to the decentralization issue.

i think Polkadot has set a good example of how the transition could go, from a model utilizing council and a technical oversight committee, not necessarily fully comprised of core team members, to a more open system where the power and responsibilities are dissolved into the hands of more ‘localized’ community (or corporate-based) governance, where senior technical and other notable representatives are voted in by their peers.

are there ways we can eliminate the need for issuance of new governance tokens and therefore enhance the utility of our existing ones, addressing two issues at once? a second set of tokens with new tokenomics and utility to keep track of will get confusing fast, and dilute attention.

[hoonkim]

@Megan

are there ways we can eliminate the need for issuance of new governance tokens and therefore enhance the utility of our existing ones, addressing two issues at once? a second set of tokens with new tokenomics and utility to keep track of will get confusing fast, and dilute attention.

As I said, it’s not a governance token since there is neither long-term value nor transferability.

I have thought about the governance model for a very long time, and using tokens to vote was naturally the first option.

But based on how our tokens are distributed, having 86 accounts hold more than 78% of the total supply is not a good look. I know we can add a voting threshold, but nothing is preventing these accounts from botting the system. Furthermore, using ASTR to vote means that there are no inherent advantages for the builders compared to investors.

There are also other reasons that I laid out in the governance whitepaper:

• Oligarchy: One clear issue we see when making tokens (assets) a representation of voting power is that it essentially means money equals power in the system. This painfully resembles the power dynamics in a capitalistic society. To combat this issue, token voting mechanisms introduce a voting threshold into the equation to limit the power of whales. However, in a permissionless system, anyone can create a new account to cast a vote just below the threshold, which becomes a cat-and-mouse game. If we require on-chain identity to vote, the system moves toward a reputational voting system. Furthermore, the lack of capital should not be why someone’s voice is less important than others.
• Voting cost-benefit analysis: The act of voting should represent one’s voice and opinion on a given matter. However, when the medium of voting can appreciate as an asset, this means that voting is also an action that costs money, either in spending the tokens or through opportunity costs when the tokens are locked.
• Skewed priority and interests: Continuing on the points mentioned above, allowing all token holders to vote means that the most prominent common interest of the voters will be to increase the token value. This is because corporations and projects building on Astar will serve a different audience, and their proposals are expected to work in their favor. But in the case of token value appreciation, this is seen as a positive for all holders. Because of this, governance proposals that can directly affect the token price (such as generating hype or token economics changes like reducing inflation) will tend to gain more traction with higher votes than those that are more core to the protocol and the innovation of the technology. This tendency goes directly against the Astar vision.

Having said this, if voting with tokens is a must, we can perhaps consider allowing both ASTR voting and governance token voting, but the gov token has a significantly high voting weight.

[bLd759]

I hope everyone can read this post at some point to help realize how much decentralization is hard to reach in practice, most claiming to be decentralized are actually far from it.
Astar aims to become a DAO from the beginning but it’s known for long it’s a multi year process with a lot of experiments and iterations to be made before arriving to something close to what is decentralized, I am happy to see we this being talked publicly without pretending false claims.

I hope during the next months community can empower Shiden as a decentralization lab and experiment it, we can see here in forum a lot of members caring about the network, its activity, different proposals and its future.

[Jaski]

Couple of points from the community that I would like to address:
Our team has extensively discussed the idea of NFT based governance vs a new governance token and we believe that a token-based governance system would be the most appropriate for Astar’s governance. This approach would allow for the implementation of dynamic mechanisms, rewards, and penalties, which are essential in ensuring a stable and sustainable governance structure.

It’s important to note that decentralization is a complex process that requires a deep understanding of the technical and business advancements of the ecosystem. As our team member Hoon has repeatedly mentioned, most chains out there are not truly decentralized. With Astar’s governance we would be taking an innovative approach to decentralization where we also draw inspirations from the evolution of corporate governance over the past few centuries.
The proposed governance model places a significant role on the stakeholders who are part of building the ecosystem. These actors possess the most intricate knowledge of the technical and business aspects of the ecosystem and therefore, they are well-positioned to govern it.
However, we also recognize that the community plays a crucial role in the success of any governance structure. While the community mostly interacts with the network through applications or other indirect methods, the responsibility of thinking of the community’s interests lies with the apps or partners. If a governance actor fails to act responsibly, they may face indirect penalties from the community.
Additionally, we believe that our upcoming product Townhall would also provide an open space for community run off-chain governance, which will enhance all community members’ involvement in governance.
As we continue to navigate the complexities of governance, we remain committed to ensuring that Astar’s governance structure is sustainable, efficient, and transparent. Excited to be working with Hoon on building a revolutionary governance model for Astar and building a truly decentralized chain.

Regards,
Jaski,
Co-founder, Polkassembly.

[hoonkim]

Thank you so much Jaski for your comments it is an honor to be working with you on this! Having your team’s solution as the interface for our governance will help a lot.

@Jaski

Our team has extensively discussed the idea of NFT based governance vs a new governance token and we believe that a token-based governance system would be the most appropriate for Astar’s governance. This approach would allow for the implementation of dynamic mechanisms, rewards, and penalties, which are essential in ensuring a stable and sustainable governance structure.

And I agree with you. I’m still keeping the NFT-based governance in my scope because I see a lot of long-term potentials here, though integration (code and extensibility) is my current concern compared to the token voting system. Having said that, I’m also interested in the governance participant reputation system too (on-chain or off-chain), so we have another vector of incentivizing players who are active in the governance as you mentioned previously.

[hoonkim]

Thank you for your response!

@Nao

However, sometimes people will argue that, for example, Bitcoin is a DAO. Sure, it is PoW and, therefore, different in terms of who carries the actual power. Nevertheless, similar principles apply to all open-source protocols because you can just fork them if you don’t like the direction the protocol is moving in. Then it’s up to validators/miners to pick which one they want to support.

Regarding this point, yes, you can always fork open-source projects. If the person (or team) forking has the capacity and skills to start the project, bring the community, and bring the liquidity that is on par with the original project, then I think they should be allowed and encouraged to do so. I see this outcome as the ultimate sudo. If the people in power fail the community and no voting can solve the issue, the people should have the right to change the leadership like real-life revolutions.
In any public blockchain (or community), code is just one system component. When you fork a project, you must also fork the community, liquidity, and developer acumen.

Also, since you mentioned Bitcoin, let me go into that point too. I think a lot of people are using DAO as an umbrella term, but for me, I see DAO as a framework and a tool for online community management. Because it’s a tool, it must have a purpose and a goal it serves. In the case of Bitcoin, the goal of the DAO is to become a stable protocol that acts as the storage of value. So it should not evolve, be censored, or have breaking changes. However, Astar does not share the same goal, so the DAO model should be different to serve the target that fits the community vision.

[hoonkim]

I will add another component to the Astar governance.
Please note that this is a draft proposal that I am using for a public discussion, meaning that everything written here is subject to change and should be discussed.

Astar Treasury

On-chain treasury is one of the main factors that drive governance engagement and fuel network contribution. However, because it is the heart of an organization, we must carefully understand how the money should circulate and the core objective for spending the treasury money.

I will use the Polkadot treasury as the base reference for this thesis, but certain components were referenced from other treasury models.

Problem Statement and Vision

System-embedded treasuries like Polkadot have a robust mechanism for accumulating treasury funds. Like Polkadot, Astar will also incorporate mechanisms such as the fee percentage, slashed rewards, and chain inflation to be sent to the treasury.
However, the real issue is with the allocation mechanism (i.e., who can propose and be eligible for the treasury amount). Most on-chain governance use an open proposal system where anyone with the right criteria can open a treasury proposal, and those with voting rights can vote aye or nay on the matter. In the case of Polkadot, the council will act as the guardian for the treasury, though this will change in OpenGov. But in general, this type of model leads to treasury bleeding, lack of transparency,

In Astar Network, we want to create a treasury model that satisfies the following:

• Treasury funds should be allocated only for projects and ideas contributing to the network regarding technology, education, marketing, ecosystem, and anything else that leads to the network’s growth.
• All proposals should have a clear plan, timeline, KPI, motivation, driving person, required resources, and risk factors that could affect the above.
• The treasury should enable innovators, executors, leaders, or people who ship to focus on their work without financial concerns.
• The treasury must have clear regulatory guidelines and support (such as invoices or other documents) so that all participants won’t face any potential legal issues when supporting the network.
• People who are qualified and engaged in the topic should handle the funding assessment, not the council or a few with a lot of voting power.

My Proposed Treasury Mechanism

For Astar Governance treasury, after long discussions and research, I propose that we maximize the bounty system introduced by the Polkadot governance model and create a “sub-treasury” that is funded by the main treasury.
This system will have more bureaucracy but stability, security, and better delegation, allowing the governance participants to stay focused.

Treasury Types

In Astar Governance, there will be two types of treasuries: the federal and the sub-treasury (bounty).

The federal treasury will act as the core source of funds for the network that is directly integrated into the protocol so that the funds can accumulate or be burnt based on our token economics. The council will act as the guardian of the federal treasury, and the funds here will not be distributed directly to an account. Instead, it can only be allocated to sub-treasuries.

The sub-treasury is a purpose-specific pool of funds meant to be distributed directly to users and projects who satisfy the criteria set by the sub-treasury owners (curators). Only the federal treasury can fund the sub-treasury, and they will impose a maximum budget. The curators will act as the guardians for the sub-treasury, and they have the responsibility to provide all information regarding the spending, purpose/objectives, progress, and other information about the operation to the council if they wish to extend their budget. The curators will have a regular payroll, and their contributions will be treated as part of the budget. The council will have the right to cut all budgets if the sub-treasury curators are not transparent or compliant.

This is a system where the network treasury is made to create common-good sub-Governances for specific matters and open up the scope of the contribution to any direction that the governance participants agree to vote on.

Note that the normal voters (governance token holders) will have a saying on all the matters above, so if the majority of voters disagree with the sub-treasury or federal treasury spending, they can always vote to disapprove the spending.

Making a Treasury Proposal and voting

It might look complicated because I listed all the features, but looking at the system in isolation should give us a better idea of how it should function.

Any ASTR token holders can open a proposal to create a new sub-treasury and become a curator by locking their tokens. The proposal should always be in a mid-long term high-level scope (quarterly reports and milestones that last for years), and it must contain the following information:

• Sub-treasury name
• Purpose, vision, value proposition, and any other information that can help the voters understand why having funding for this category adds value to the network.
• List of curators (owners) and their qualifications for driving the sub-treasury.
• The network KPI that the curators will track and report.
• Scope and milestones of the sub-treasury.
• Project (proposal) acceptance criteria.
• Required budget
• The cost breakdown for curator payrolls (if the curator wishes to receive payrolls.
• Existing potential proposals that will benefit from this sub-treasury upon creation.
• And other information that the voters request.

For example, a community member wants to hold a regional small Astar meet-up, but no sub-treasury can finance this. Then they must campaign to gather potential curators and supporters interested in creating a sub-treasury proposal with a payroll. Once a proper curator with a good proposal has been set, they can propose to the federal treasury, where the council and the governance token holders will vote. Once the sub-treasury has been made, any future community projects and initiatives meeting the sub-treasury’s acceptance criteria can easily open a treasury request and receive funds like they would in other governance platforms.

If the sub-treasury needs more funds, it can request a budget extension from the federal treasury with useful information that describes why they need an extension.

Any votes going to the federal treasury must have at least one approval and no disapproval from the council. In case of a disagreement, the proposal will always require the majority council’s approval for it to pass or be vetoed.

A similar model will be applied to the sub-treasury. But instead of the council’s approval, any proposal will need the curator’s approval.

The scope of the sub-treasury can be broad or specific, and it can always evolve. For example, we can start with an education-focused sub-treaty that funds hackathons, documentation, and online courses. But the hackathon scene has become more prominent and needs more funding. In that case, we can create a separate sub-treasury focusing on funding hackathons and remove hackathons from the scope of the original sub-treasury.

Potential Issues and Corner Cases

• Conflict of interest: Someone wants to create a project proposal, but there is no sub-treasury to submit their funding request, so they must create a sub-treasury before anything else. Suppose the original proposer is also a curator (with a payroll) and the beneficiary for the sub-treasury proposal. In that case, a possible conflict of interest will come into question, and the proposer must be able to explain how they can handle this. There will be no systematic check for this, which must be resolved at the human level through discussion and public forums. You can also argue that having a single party go through the process forces them to be transparent with their contributions since all proposals and budgets must be online.
• Voting disagreement: If one or more council votes no, we will check for a simple majority vote among the council members. If the governance token holders overwhelmingly vote no and one of the council votes yes, the council can come together to vote for a veto (requires a majority council approval). But with no veto, the proposal will honor the governance token holders’ vote and not pass the proposal. However, the same will not happen if the council votes no, but the governance token holders vote yes. In this case, the proposal will only pass if the majority council votes yes.
• Bootstrapping: This system was made with scalability in mind in case there were a lot of treasury requests with little to no policing. However, this is not a problem in the early governance stage, and the added bureaucracy may only act as an unnecessary blocker and overhead for operations. So for the initial governance stage, we need a well-organized and engaged team (individuals affiliated with the council team, ambassadors, members from Astar Foundation, Startale Labs, Team STEP, etc.) to get the system working. However, the system is inherently open for anyone to create a new sub-treasury as they see fit, so we expect the community to slowly take away part of the scope for the initial sub-treasuries into its dedicated curators with funding.
• Centralization: Because this system introduces a clear hierarchy of votes (minus the governance token holders), it can become a source of centralization. Astar Network will prioritize functionality over decentralization, but too much centralization will become a risk factor for the network. To address this issue, we allow the governance token holders (i.e., the dApp ecosystem) to always have a saying that can affect the council or the curators. This means the system will only be decentralized if the ecosystem projects are decentralized.
• Funding estimation: Sub-treasuries are not a single project but a mid-to-long-term objective to accelerate the network growth. Meaning that the curators proposing to create a sub-treasury cannot have an accurate budget estimation. Instead, the council and the voters should estimate how much they are willing to fund and support the broader initiative. So it must be a top-down approach and trust in the curators, not the project.

[Maarten]

Thanks a lot, @hoonkim, for sharing all the steps on the forum!

It takes some time to fully understand, so it would be great to break it more out to start the discussion and involve community feedback. Let’s build a more open environment where discussions can take place openly. It allows the community to participate and be actively involved. Let’s empower our community to take an active role in shaping the future of the DAO.

If I understand it correctly? The proposal suggests creating a treasury model for Astar Network, which consists of two treasuries: the federal treasury and the sub-treasury.

• The federal treasury is the core source of funds for the network and is managed by the council. Funds in the federal treasury cannot be directly distributed but can only be allocated to sub-treasuries.
• The sub-treasury is a pool of funds meant to be distributed directly to users and projects that meet specific criteria. It is funded by the federal treasury and is managed by curators.

From your proposal, the treasury should support projects and ideas that contribute to the network’s growth in various areas like technology, education, marketing, and ecosystem development. It great asset to this is the latest talk on the Kusamarian with Rob. Please listen after minute 31, where he explains that we currently see many funds asked up front, which is wrong. Maybe this should also be actively promoted in the Astar Treasury Management about how Rob explains it:

The Kusamarian

In the proposal, you also talk about the treasury allocation decisions that should be made by knowledgeable individuals engaged in the relevant topics rather than concentrated power in a few. How will those be selected? How to ensure those have the knowledge?

The curators of sub-treasuries are responsible for providing information on spending, progress, and operations to the council for transparency. Does this mean that they are also paid for their work?

[Jaski]

Hey Marteen,
As @hoonkim mentions. The curators will always have the option to get paid for their work.
When a curator is assigned for any sub-treasury, they will be proposed an amount as curator fee by them(the curator) or the proposer for the sub-treasury. Curators would need to accept their role on-chain before they are effectively assigned the task of curating the particular sub-treasury.

I feel by using different terminologies, we might be complicating the process. Using simple terms around Bounty & Sub-bounties could make the process less overwhelming.

Now, adding a few points in here - Please note I will be using bounties and sub-bounties as the terminology instead of Federal and sub-treasuries respectively. The aim is to propose ideas that reduce voter burnout(involve token holders only when needed)

• ASTR token holders should be allowed to propose Bounties(off-chain)

• If doing on-chain, token holders would be required to put a bond(Slashed, if proposal rejected)

• GovASTR & ASTR token holders can show support towards Applications.(Off-chain voting strategies can be used here). If using on-chain bounty proposal process, GovASTR token holders can vote on these proposals.

• Applications with more support can be evaluated and approved/rejected by council members(Rejection should be accompanied with a reason for refusal). This is something that we have seen happen in Polkadot’s Gov1 referendum process.

• Once approved by council members, the application converts into an on-chain bounty.

• ASTR & GovASTR token holders

• Council members can initiate a bounty if they want to push a specific agenda. They may choose to assign a curator or open applications for curators. If they open applications for curators, then anyone who wishes to be a curator can apply for the same(Usually, it should be associated with a significant bond). The application requirements should be bounty specific - Curator salary, Proof of work(Skillset), etc.

• Once a bounty curator is assigned, then a similar process can be followed for sub-bounties.

• For sub-bounties, either the curators of parent bounty can propose a sub-bounty or ASTR token holders can propose a Sub-bounty. ASTR token holders should put a bond when proposing these sub-bounties and the bond should be slashed if the bounty is rejected.

• Sub-bounties could also follow a similar process of applications(off-chain voting)

• When a sub-bounty is proposed without any curator being assigned, people should be allowed to apply(off-chain or on-chain process can also be followed here)

• Off-chain process, would allow multiple applications being accepted if need be. These applicants can then be asked to make a submission for the work and the child-bounty amount should be awarded to the candidate only after submission is made.

All data should be publicly available to the community and more checks can be introduced to give further power to ASTR token holders.

Would love to know what the community feels about these ideas and process. The ideas are an extension of Hoon’s thoughts shared above.

Thanks,
Jaski, Polkassembly Team

[hoonkim]

Thank you for your comment, and sorry for the late reply. It was bad timing for me.

@Maarten

From your proposal, the treasury should support projects and ideas that contribute to the network’s growth in various areas like technology, education, marketing, and ecosystem development. It great asset to this is the latest talk on the Kusamarian with Rob. Please listen after minute 31, where he explains that we currently see many funds asked up front, which is wrong. Maybe this should also be actively promoted in the Astar Treasury Management about how Rob explains it:

Yes, this is correct. The proposed system is exactly meant the solve the problem that he raised. I agree that we should promote this, but I’m not sure exactly what would be the best approach (maybe partially moving this thread to the Polkadot Forums?). Any suggestions would be nice.

@Maarten

In the proposal, you also talk about the treasury allocation decisions that should be made by knowledgeable individuals engaged in the relevant topics rather than concentrated power in a few. How will those be selected? How to ensure those have the knowledge?

The council and the govASTR holders vote the sub-treasury curators. So it is their responsibility to ensure that the curator and the proposal are reliable.

@Maarten

The curators of sub-treasuries are responsible for providing information on spending, progress, and operations to the council for transparency. Does this mean that they are also paid for their work?

Yes. This is completely optional but they can request a payroll for the curators when they open a proposal to create a new sub-treasury (of course, they can also change this if the council allows them). The payroll must be part of the sub- treasury’s budget since it’s part of the operating costs.