The state of Astar governance and our development plans

Astar Initiatives
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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.

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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.

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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.

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.

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Generally, I find this a very good start at kicking off a discussion around governance and how a transition can look like. Kudos on all the work and research going into this.

Looking at other chains with governance, one mostly comes to the conclusion things can get messy fast. And voter apathy is probably the biggest challenge Having a setup where governance tokens aren’t good for quick gains and involving those most interested in the survival of the chain seems sensible for a start.

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.

Any thoughts on that line of thought?

Cheers,

Nao

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Thank you for your response!

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.

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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.

Governance Workflow
Governance Workflow1920×1727 86.1 KB

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.
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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:

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?

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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

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

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.

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.

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.

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I don’t want to sidetrack this discussion too much, but I have some observations I wanted to share based on

my experience

this is a throwaway account :slight_smile:, but I’m an ex-employee from somewhere or other who was on the genesis council for both relay chains and many parachains, and left both Kusama and Polkadot councils at different points in time, largely due to the issues you are trying to avoid recreating. Me and some friends in the ecosystem also ran a small governance experiment with a very different model with largely successful outcomes - that ran out of money :sweat_smile:.

in the rest of the ecosystem. Firstly, I want to commend the commitment you are making to truly decentralize your governance process - as you mentioned, many projects in the ecosystem remove sudo and claim decentralization, but simply operate a council+tech comittee model with their employees taking most of the seats/maintaining decision making power through informal influence - I think the model you are proposing could avoid some of that, but I have my concerns about how your first requirement/solution - giving more voice to builders with a gov token that is rewarded based on dapp staking ratings - would work in practice without careful consideration, and want to point out a pretty glaring issue that doesn’t seem to be addressed anywhere here, really.

The big issue with governance decentralization attempts in this space has always been complexity and cognitive burden - or, as @Jaski proposes:

Things are a little bit different with @hoonkim’s proposal of having a separate, non-transferrable, expiring governance token, but in the larger context as well, I have a different opinion regarding involving token holders only when needed. I believe this leads to outcomes like what we’re seening in OpenGov on Kusama currently - where professional governance delegates and perticipants who are supported by large ecosystem actors end up making all the decisions, and while that sounds like it meets your requirements, of builders and active participants having more influence, in practice it means “organizations and builders focused on engaging in governance, or who have the resources to have resources dedicated to engaging in governance, have a permanent advantage over organizations that focus on building and adding value”. That is obviously an undesired outcome.

An alternative I’ve long been proposing can basically be described as “doing as much onchain as possible, but making it as simple and unobtrusive and minimized as possible”, this is partially about changing the complexity of UX and interactions, but also largely around minimizing the true cost of making decisions and what is at stake when you do.

I assume we agree that:

  • we want every legitimate participant of a governance process to willingly and consistently engage in it.
  • we don’t want it to be possible for non-stakeholders to significantly manufacture consent/cause conflict/sway the decision making process.

The way I see that working is:

  • the process for decision making in governance should be fast, cheap (cognitively and financially), and require little to no “coordination” - this means things like timing of responses within the expected window should have little or no effect on the outcome, this means that participants should be able to make a proposal, or make a decision on a proposal with exclusively information available onchain (identities, proposal metadata) and shouldn’t need to access or participate in, or be aware of offchain information or discussion other than what is linked to from the chain. I see the referenda and delegation pallets as used in opengov a pretty ideal candidate for this, since it’s all about hitting thresholds over time and doesn’t need participants to coordinate on timing or communicate much, but I don’t have a simple solution on how to employ them in a private context.
  • a participant should be able to do everything they need to do regarding governance on the same page, submitting a single transaction, and requiring minimal followup. The way I can imagine this working would be using a single UI page (and/or governance wrapping pallet) that filters all available proposals to decide on that you have any influence over, presents all available metadata for that proposal, presents each action you are capable of taking on that proposal as a single button, after you have addressed all of those actions available to you if any, you are shown anything you can propose yourself, which you can optionally choose to do, before sending all of your decisions as a batched extrinsic.

In my experience of coordinating this kind of process, it has generally been an issue and large source of unneccesary friction to direct people to do something like “make a proposal on page A, post a message in chat B and forum C, which you need to monitor, and then talk to everyone in this pre-established group of influencers X to progress your proposal to stage D, where after you wait some indeterminate period of time for maybe getting approved you then need to manually withdraw half your payment onchain and then make a report in B and C and to everyone who is in X if you want the rest of your payment.” saying this kind of thing to anyone just makes the only people willing to stay around the “institutional governance manipulators” I described earlier, and scammers who don’t spend any time building and are fine playing governance games for a payout and then leaving.

The process, in my eyes, should ideally be, based on how I understand Hoon’s design:

  • go to page A, make your proposal there, including a link containing all the requested context,
  • you will know if it has been approved within X days
  • you will begin getting paid in Y days
  • after that - go back to page A every Z days you’re working on the project with a link to an update and to claim your payment - you will be asked your opinion on other projects and then you can provide your update to your project.
  • If enough people/the council think it’s necessary to do so, your next payment will be your last, you will know this within X days, but you are still guaranteed that next payment, so you are expected to continue working within those X days.

In this scenario we abstract all governance decisions away to “projects opinions on other projects” in a queue of decisions they need to make every time they are claiming a bounty payout, guaranteeing a steady stream of governance participation by builders on other builders projects, all in the same place, and as part of a process they willingly want to participate in - think of it as the same kind of logic we see with validators and parachain teams being strongly encouraged to payout their nominators/contributors, even though they don’t technically have to, since it’s tied strongly to their own success and costs.

This works as well for company representatives on council, who I would assume are busy people with full time work other than engaging in blockchain gov - they would just need to visit the gov page once in a while, decide on their current queue of decisions, maybe poke one another for the occasional additional context - I won’t pretend this won’t happen, but it’s clear in this design the council isn’t making the micro-level funding decisions but rather operational ones and vetoing? Am I misunderstanding? It’s not clear from your description what their exact responsibilities are tbh.

tl;dr - Basically do gov fast and design for builders who value their time and aren’t playing politics and arguing on forums constantly.

longer tl;dr - you’re using a gov token for decisions, so we don’t need to worry about people being afraid to participate due to financial opp. cost. Just use referenda pallet and tracks for decisions, gate proposal making and payout claiming behind having votes for all proposals for gov token holders, and throw out the older UIs, make something card based with a queue of cards for each un-voted-on proposal, and submit all decisions and proposals at once as a batch. Make voting part of the proposing process and vice-versa, and make proposing something that is stupidly easy to do (cheap but not free), and stupidly easy to reject (because you aren’t killing someone by rejecting their proposals).

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Timeline

  • 2023 Q2: Astar Governance high-level model and features
  • 2023 Q3: Astar Governance “whitepaper” release, test, and validate the model
  • 2023 Q4: Code implementation and roll out to ShidenDAO
  • 2024 Q1 ~ Q2: Improve and roll out to Astar Network (remove sudo before or during this phase)

On this level of detail, timeline seems good (great really), but in terms of actually delivering in that time, I think some sub-quarter milestones should be defined so discussion converges.

For example, some boundaries/dates that I think should be explained:

  • how long will the discussion be open for inputs before drafting the 1st version of whitepaper?
  • when will the 1st draft of whitepaper be available for discussion/comments - there will definitely be a lot of discussion before actually agreeing on release (and enough time should be given to community to comment)
  • what does test and validate model mean in practical sense?
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This paper is well written!
If what is written really works, I am very proud of it.
I think it is a good explanation of the concept.

That said, I am very concerned about the actual executions.
How do we get this many participants and curators to governance and get them to be active?
Is it key to implement a little bit at a time, or is it important to provide plenty of incentives, or is it enough to get a million users in the ecosystem, or 200 companies?

I believe we need to go through a process of actually trying this, having problems arise, addressing them, and making improvements. I think it is important how quickly we can turn this PDCA cycle around. I think we have to spend a lot of resources on hypothesis testing and validation at Shiden. (I don’t see that as a problem either)

I think this is too optimistic.

  • 2023 Q3: Astar Governance “whitepaper” release, test, and validate the model
  • 2023 Q4: Code implementation and roll out to ShidenDAO

The process after releasing “whitepaper” should look like

  • Test and validate the model
  • Implementation and roll out to Shiden DAO
    (and we repeat this process many times)

Then, we can finally ship this to Astar.

In any case, we will have to agree on the expectations as to what circumstances would make the first implementation phase.

In terms of high-level models and functions, I can broadly agree. However, it must be mentioned that many points depend on future updates of dAppstaking and how we select Councils (incl. genesis councils) and may be changed or opposed accordingly.

As for Councils, I’m not sure that all Councils need to be “equal” in terms of influence on governance.
It is not good to have too much influence, but how do we measure the difference in performance and size between Council A and Council B in terms of actual growth and maintenance of the network?
It may be possible to reflect this in dAppStaking (we can imagine that powerful council may have more GovASTR through their products), but as these things show, it seems to me that we are leaving many kinds of issues to dAppStaking updates.

Also, I agree with what @andabak mentioned.
To make this happen, we would like to hear sub-quarter milestones with the timeline.

Thank you!

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Agreed with this point. The terminology is something we should be working on. Maybe we can drop the federal treasury and sub-treasury and call it the treasury and collectives to stay in line with the source terminology.

I like the points that you raised, but I’m not sure if I fully get what you mean by ASTR & GovASTR? ASTR holders can vote on who gets the voting right as described in my previous proposal.

Absolutely. But I think this and off-chain voting things (in fact, everything in this model), heavily rely on the fact that we have a good interface that works well for this. I’m hoping that your team can support.

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Thanks for the compliment :smiley: It means a lot coming from you. But I just want to clarify one thing since “decentralization” is a bit loaded nowadays. I want to establish a governance model that fits the vision of Astar Network and allows multiple teams and companies to work in the same ecosystem. So even if it’s a bit centralized, it’s not an issue.

Yes, this is an outcome that I was also afraid of, in that, what happens if the network wants the builders to have power and contribute to the governance, but they don’t want to. This is why the builders can give the govASTR to its stakers or delegates. I think I’m not answering your question. Still, my intention behind govASTR was that even if only teams and organizations with a lot of resources will ultimately take over the network, they still need to build something the average token holders want to support through dApps Staking. This means that Astar will ultimately have more dApps that people use regardless of who is in power (and to gain power, you need to put more resources into building a product). Honestly, the average user and degens wouldn’t care who has the power over the network. They want good projects.

Absolutely agree with this. We will have the referenda and delegation pallets as part of our model too, in this case, as you recommend.

I see. Reading this with your previous comment makes more sense. I don’t mind people not spending any time building, but remember that you need a stakable dApp with enough rewards to get the voting power in the first place. I imagine the model I wrote to be more like an “I build, so I vote. I don’t build, so I propose and deliver” model. Of course, nothing will be straightforward like this in practice.

If you’re talking about the sub-treasury process, then yes, it is similar to what I have imagined too.

That is correct. At least what I’m aiming for. The council’s role in the treasury context is to address “should I fund this activity or not?” and resolve divisive community votes. Only macro-level decisions.

Thanks for this suggestion. I totally agree with this, and I’ll have to partially rely on @Jaski to help me since it’s in the presentation layer, which will always change over time at a fast pace.

This too. I’m getting a lot of great input from you, and I think I got my biggest takeaways here.

Thank you!

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Hello @hoonkim,

Thanks for bringing the topic of governance to the Forum, it’s a topic that’s really very important to me and probably one of my favorite aspects of Polkadot.

However, as you explain, it’s important that it’s well researched, designed and tested before being launched on Astar. The way you propose to discuss, debate and build Astar’s governance together on the forum is for me the right way to go.

Before getting to the heart of the matter, I’d like to re-discuss the structuring of the discussion. As @Maarten pointed out, the topic is complex and difficult to understand on a platform such as the forum, it took me several readings to differentiate each part and so I think it’s important to re-scrutinize the topic for clarity and to allow community members to follow and participate in the sub-topics that interest and concern them.

From what I understand, I would divide the governance model we’re building into 4 main aspects:

  • General governance model (voters, voting token system, council, anonymous voting, etc.)
  • dApp Staking voting system (proposal, listing, de-listing, etc.)
  • Treasury (On-chain ideathon bounty, federal treasury, sub treasury, curators, etc.)
  • Modifications and updates to Astar network technical parameters (fees, collators, blocks, runtime, etc.).

For greater clarity, I suggest not grouping everything together in a single post on the forum but creating a new category on the forum: Governance and creating 5 posts for each of the previous topics:

  • Topic #0: Summary of Astar Governance, read-only topic with links to each subtopic.
  • Topic #1: Governance Model
  • Topic #2: Astar Treasury
  • Topic #3: Network settings and upgrades
  • Topic #4: dApp Staking voting system

In parallel, I propose to create a document on googledoc or notion with the whole governance model proposal and the sub-topics in order to have a single document to understand the whole topic without having to read the dozens (potentially hundreds) of questions and answers on the forum. This document will be available on the Governance summary topic.

I can create a 1st Draft of this document with the information available on the forum if you wish.

The subject of governance is so vast and important that it’s important for me to put in place a clear and solid framework so that we have the right foundations to work from and invite the community to participate in building the DAO.

Thanks!

G’, Astar & Polkadot Ambassador

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Thank you for your post and for bringing up some great points.

I generally agree with this point. In this case, I would like to use this post as the starting point to discuss the general model before the implementation.
However, I don’t think opening five separate posts simultaneously makes sense, as it would only dilute the participation and might put some points out of context. So, I propose that we have a dedicated category for improving the governance after the first iteration is implemented.

So my suggested timeline would be something like this:

  1. Create a high-level governance paper to describe the network’s vision (no technical details here, based on this thread).
  2. Identify the development requirements, such as a list of pallets, custom functions, and initial parameters.
  3. Implement them as a Substrate pallet and prefer runtime upgrade.
  4. Remove sudo.
  5. Open a discussion about each part of network governance.

In this proposed timeline, the most time-consuming part would be step 3 I think. The purpose is to first have the basic governance model that satisfies the team’s vision and allows more participants to voice their opinion and identify the issues that this model might have on the fly. I need to dive deeply into the new Substrate codebase for all things governance before we have a clear implementation plan. But I think this is the best approach if we want to start building and less talking.

What do you think?

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I now have a better understanding of the workflow you have in mind.

The first step is to discuss the general topic of governance in this post to create the paper you mentioned and during step 5 we can discuss the specific parts of the governance model.

To be sure, the timeline you describe is for the creation, development and implementation of the governance model on Shibuya, then Shiden to be tested before deploying it on the Astar network:

  • Steps 3 and 4 will take place first on Shibuya/Shiden,
  • Step 5, we’ll discuss and implement changes to the model if necessary on Shibuya/Shiden.
  • Step 6 will see the model deployed on Astar.

Am I correct?

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Shibuya wouldn’t be considered too much since it’s only meant for functional tests. Shiden is where (ideally) we test the viability of the model. And if the technical implementation seems to take a lot of time, I am also looking to work with @Jaski to create an off-chain “simulation” for our proposed governance model and operate through there.

And also, note that I don’t think deploying complete fool-proof governance on Astar is possible. Instead, this will be a gradual process where we introduce critical components of the governance to Astar one by one after assuring that the parameters (and the implementation) will not break the network given the worst-case scenario.

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Before I move on to other discussions, we are launching Townhall soon. It will allow all Polkadot & Kusama projects to experiment with governance. We’d soon be building Astar’s custom governance requirements into Townhall and keep the community updated on the progress and the final direction.

Now, talking about the treasury. @hoonkim and I recently had an interesting conversation around treasury diversification, revenue, bounties and grants.
While bounties is discusses above in this thread, a sustainable business model requires us to build good revenue channels for Astar’s treasury.

Currently all substrate based chains earn revenue from txn fees, slashing and a few other mechanics, which in totality are still not enough to build a sustainable treasury model.

Blockchains are often compared to countries, and while giving grants and bounties are like funding critical infrastructure and development, the government(blockchain) needs to build scalable and sustainable revenue models to keep the economy thriving.

Let’s look at,

a couple of things that a country does to grow the overall economy. When looked at from a blockchain's lens, most comparable things for a blockchain fall into grants/bounties/foundation led ecosystem development efforts.
  1. Infrastructure Development: Governments invest in the development of physical infrastructure such as roads, bridges, airports, ports, and telecommunications networks. This facilitates economic activity, attracts investment, and improves productivity.
  2. Education and Workforce Development: Investing in education and skill development programs helps create a qualified workforce. This enables industries to thrive, promotes innovation, and enhances a country’s competitiveness in the global market.
  3. Research and Development (R&D): Governments allocate resources to promote scientific research, technological advancements, and innovation. Supporting R&D activities can lead to the development of new industries, products, and services, driving economic growth.
  4. Industry and Sector-specific Incentives: Governments may offer tax incentives, subsidies, or grants to attract investment in specific industries or sectors. These incentives can encourage companies to invest, expand operations, and contribute to the country’s economic growth.
  5. Foreign Direct Investment (FDI) Promotion: Governments actively promote and facilitate foreign investment in their countries. They may offer incentives, establish special economic zones, or streamline regulatory processes to attract FDI, which can stimulate economic growth and create employment opportunities.
  6. Trade and Export Promotion: Governments implement policies to boost exports and reduce trade barriers. They may negotiate trade agreements, provide export financing, or support market access initiatives to increase revenue through international trade.
  7. Entrepreneurship and Small Business Support: Governments often provide assistance and incentives to foster entrepreneurship and support small and medium-sized enterprises (SMEs). This helps create jobs, encourages innovation, and diversifies the economy.
  8. Tourism Development: Governments invest in promoting tourism through marketing campaigns, infrastructure development, and favorable policies. Tourism can contribute significantly to a country’s revenue by attracting foreign visitors and generating foreign exchange earnings.
  9. Sustainable Development Initiatives: Countries focus on sustainable development practices, including investments in renewable energy, environmental conservation, and green technologies. These investments promote long-term economic growth while addressing environmental challenges.
  10. Public-Private Partnerships (PPPs): Governments collaborate with the private sector to undertake large-scale projects. PPPs leverage private sector expertise and capital while sharing risks and rewards, enabling the implementation of critical infrastructure projects and stimulating economic growth.

Used Chatgpt’s help for the list above.

Now let's look at some interesting examples of how countries 'Make' money.
  1. Startup and Innovation Investment:
  • Singapore: The government of Singapore established various initiatives, including the National Research Foundation and the government-backed venture capital firm, to attract startups and investments in innovation sectors such as fintech, biotech, and artificial intelligence. These efforts have transformed Singapore into a thriving startup hub.
  1. Sovereign Wealth Funds:
  • United Arab Emirates (UAE): The UAE established the Abu Dhabi Investment Authority (ADIA) and the Mubadala Investment Company. These sovereign wealth funds invest in diverse sectors globally, including technology, real estate, and energy. The funds generate significant returns, contributing to the country’s revenue.
  1. Tourism and Entertainment:
  • United Arab Emirates (UAE): The UAE, particularly Dubai, has invested heavily in tourism and entertainment. Developments like the Burj Khalifa, Palm Jumeirah, and world-class shopping malls attract tourists, generate revenue from hotel stays, shopping, and entertainment activities.
  1. Public Sector Commercialization:
  • Finland: Finland transformed some public entities into profitable businesses. For example, the Finnish postal service, Posti Group, expanded into logistics, e-commerce, and digital services, becoming a commercially successful enterprise that contributes to the country’s revenue.
  1. Natural Resource Monetization:
  • Norway: Norway effectively monetizes its natural resources, particularly oil and gas, through state ownership and investment in the petroleum sector. The government established the Government Pension Fund Global, one of the world’s largest sovereign wealth funds, funded by oil revenues.
  1. Export-oriented Manufacturing:
  • China: China has developed export-oriented manufacturing industries, becoming a global manufacturing hub. The country’s investment in infrastructure, technology parks, and favorable policies have attracted foreign companies, boosting manufacturing and generating export revenues.
  1. Financial Services and Offshore Centers:
  • Switzerland: Switzerland has positioned itself as a global financial services hub and attracts foreign capital through banking, wealth management, and financial institutions. Additionally, Switzerland is known for its offshore centers, such as Zug, which provide a favorable business environment for companies and generate revenue.
  1. Agriculture and Agro-processing:
  • Netherlands: The Netherlands is a leading exporter of agricultural products, employing innovative agricultural techniques and investing in agro-processing industries. The country’s horticulture sector, including greenhouse farming and flower exports, contributes significantly to its revenue.

Thinking from Astar’s pov, we need to build businesses with and on the treasury that help in growth of the ecosystem.
A couple of ideas for the same:

  1. Investing as a venture capital firm - Astar’s treasury could LP into a fund investing into various applications building in the Astar ecosystem or across web3. The investment thesis and mandate can be developed with the community and the investments, other details can be shared with the community in a timely and legally compliant manner.
    The returns from the fund would be converted back to ASTR tokens and sent back to the treasury.
  2. Build products that generate revenue - Astar can fund the development of projects internally(led by foundation) or outsource projects to development agencies(while keeping ownership of the product), where the foundation clearly sees a revenue opportunity and ecosystem growth as a collective.
  3. Blockchain as a service: Develop custom solutions on service agreements with corporate clients and bring that revenue to the treasury.
  4. Investment into fixed/stable yields - Treasury bonds are the safest investment form and a portion of the treasury could be used to invest in these bonds and generate a sustainable yield.
  5. Diversified investments into other asset classes and partner token swaps - This is something that we have already seen some other projects in web3 successfully do.

Some of these are not feasible and I am sure there are many more ideas that can be thought of. The intention is to start thinking in direction of making the most use of the available treasury at hand, rather than letting it sit in a wallet, waiting to be deployed some day as a grant/bounty.

Thanks,
Jaski

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Thanks for your amazing response, and I look forward to seeing Townhall in action. It’s a platform we need for discussions within the ecosystem to be more visible.

Regarding your response, I like your approach of looking at the blockchain treasury as a government reserve to create a sustainable business model. Although I don’t think we need to develop a perfect business model from the start, I think it puts the entire governance process into a different perspective that I was lacking.

Before I respond to the individual ideas you presented, I would like to define what I want Astar Network to consider a valuable asset.
In a traditional DAO system, the value revolves around the treasury, and the governance participants are more interested in maximizing this component. I think the culture of Polkadot governance is particularly like this (which, I think, was unintentional). Because the system can accumulate a large treasury that is encouraged to be spent, most of the interest from the community is centered around getting their hands on the treasury.

But in Astar, I want us to see that the valuable assets aren’t just limited to the treasury. Instead, Astar will have the following types of assets:

  • Treasury worth: The number of spendable tokens in the treasury and how it accumulates.
  • Ecosystem net worth: The collective worth of all the active ecosystem projects on Astar.
  • Technical worth: The value of the technology and protocol that other businesses can use.

So if we go back to the point about having a sustainable business model for the network, it should be about using one asset to increase the other. For example, using the treasury to increase the ecosystem’s net worth. Or using the protocol’s technical value to increase the treasury’s income. So for me, the system should be modeled so that whatever the vote decides, it should always go back to either of the three. This is what I would consider to be sustainable. And I think this point goes very nicely with what you mentioned about generating value through products.

I am very open to seeing a so-called VC-DAO component in Astar Governance. However, I am unsure how the legality would work, and it would be up to the Astar Foundation to facilitate this. Perhaps this is something we can learn from Polimec if they succeed.

I feel like this should be handled carefully because the question would go back to “how to fund the development,” and the obvious answer is the treasury. I am all for having a sector budget-based treasury funding system similar to your real-life example. And the Foundation, alongside the council, should manage this. But the maintainer (curator) also developing and being the beneficiary of the budget sounds like a sticky situation.

This is the ideal situation we want to be. I hope the deal with various Japanese corporations can lead to this situation, but my expectations aren’t high.

I’m treating these to be in the same category since bonds are also a form of assets. In short, this can be seen as ‘diversifying treasury assets,’ and this is something I would definitely like to see us doing too. All good DAOs should take this approach.

I think what we are discussing here is very high level. It’s worth talking about it, but I feel we should also talk about some low-level treasury business models regarding actionable systems.

I have an idea that I would like to hear your thoughts about. I call it the treasury grants loan system. So assuming that all treasury proposals are done through a verified account (so vanity accounts wouldn’t be accepted) if the account wants to request a second treasury proposal, they must pay a small percentage back to the treasury to be able to open a new one. The idea is to encourage funding for proposals that generate value in return.

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