In blockchain project communities, disagreements often arise regarding their further development, whichsometimes leads to fierce debate and evensplit A separate constitution can help stabilize relationships in the community, which can describe general principles, procedures, and relationships between participants.
In this article, we will examine the purpose of the constitution and look at examples of EOS and Decred, two projects with their own constitutions.
The article consists of 5 parts:
- In the first part we will talk about what constitutions are and why they are needed.
- In the second part, we will discuss the idea of fictitious kinship, and how it can contribute to the emergence of constitutions for the blockchain.
- In part three, we will look at an attempt by the EOS community to create a constitution.
- In the fourth part, we will look at the Decred community’s attempt to create a constitution.
- In the final, we will draw conclusions and share some recommendations.
Before diving into the topic of blockchain communities,which have their own constitutions (we will call them “blockchain constitutions”), let’s start with the definition of “constitution”. A constitution, according to Mirriam Webster's online dictionary, is: "The basic principles and laws of a nation, state, or social group that define the powers and responsibilities of the government and guarantee certain rights to the people." We will use this definition below.
Why do we need a constitution?
The Constitution is an extremely useful written or unwritten approach to governance, because for all participants it describes the following:
- community principles and values;
- decision-making procedures;
- collection, budgeting, distribution and accounting (“financing”) of funds;
- capabilities, responsibilities and limitations of government departments;
- rights guaranteed to members of the community;
- ways to resolve disputes among community members;
- methods for electing community representatives;
- election procedure;
- fundamental community laws;
- degree and methods of exercise by the government of sovereign power.
With the help of the constitution, those who govern and those governed receive transparency regarding how each participant will act within the framework of the constitutional system.
Of course, the constitution is not limited to the forms described above.
Why does the blockchain community need a constitution?
There are many theoretical advantages toblockchain communities that stem from the creation of a constitution. The main benefits include a clear, comprehensive and transparent set of rules and procedures for relationships in the community.
Constitutions provide other benefits:
- Clearer decision guidesoff-chain (a constitution is also possible for on-chain decision-making, but usually the blockchain protocol defines the decision-making system at the level of the protocol itself);
- Election/promotion/removal of members,those responsible for management or oversight (for example, a non-profit foundation created to manage a development or investment group for the purpose of developing an ecosystem);
- Constitutions can delineate boundariesresponsibility for the finances of the community and integrate the principles and values of the community (one can recall the debate about what specific role Bitcoin should play, which led to a number of forks of its blockchain).
These are also the reasons why the projectDecentralized Credits (Decred) has a constitution - to avoid problems that have arisen in the Bitcoin community. Having a constitution also helps maintain an atmosphere of stability and predictability in the community, and prevent the arrival of members who crave only power.
II. Fictitious Kinship
Fictitious kinship as defined by the DictionaryCollins, is: “A term used by anthropologists and ethnographers to describe forms of kinship or social ties that are not based on either blood or affinity (through weddings) ties.
Is fictitious kinship expressed in blockchain communities? We assume so.
Blockchain community members are not united eitherblood, nor affinity bonds. Rather, they are united by the same blockchain protocol, the procedure for making changes to it, and a set of principles and values. For example, the Bitcoin community is connected by the Bitcoin Core software, which connects nodes on the network so that they can interact with the Bitcoin blockchain, the Bitcoin Improvement Proposal procedure to propose changes to the Bitcoin protocol and a set of principles and rules formulated by Satoshi Nakamoto (decentralized, public, distributed censorship resistant open source system).
III. Constitution EOS
First, we must turn to the first version of the EOS constitution, adopted on June 7, 2018. The second version is still under discussion. The first version of the constitution is available here.
In general, we found that the current EOS constitution does not adequately fulfill the tasks of the constitution itself. Therefore, we decided to consider only certain parts of the constitution, and their main problems.
Many of her articles link tothe material and legal base of a third party, but do not mention which legal base they refer to. There are many problems in the EOS constitution, but the main one is the confusion between the articles of the constitution and the treaties and the parties they govern.
So, a contract describes the relationship between two ormore opposed parties (usually only third-party beneficiaries can enforce the terms of the contract), while the constitution describes the relationship between the government and the people (in this case, the whole community). In other words, a contract (which is generally designed for specific parties) should not replace the constitution (which is a fundamental law for the entire community).
Perhaps this attitude arose from perceptionconstitution in terms of the theory of social contract, in which individual participants agree, directly or indirectly, to transfer some of their freedoms to the government in exchange for public order and the preservation of the remaining freedoms.
As indicated above, the constitution is the basic principles and laws of a nation, state or social group that determine the capabilities and responsibilities of the government and guarantee specific rights to people.
Contract as defined by the Law DictionaryBlack is “a legally binding agreement involving two or more parties that establishes an exchange of promises about what each party will or will not do...”.
In fact, if you want to truly adopt a constitution, you must know what a constitution is or is not.
We are confident that this ignorance has largely led to the incident with the EOS blockchain stopping in 2018.
This incident occurred when twenty-oneselected EOS block producers decided to freeze seven EOS accounts (i.e. public keys) that were suspected of being stolen, without permission from the EOS Core Arbitration Forum (ECAF).
This action violated the EOS constitution becauseBlock producers cannot carry out such actions without the approval of ECAF. Moreover, ECAF rejected the order to freeze the seven accounts because the EOS constitution was not yet finalized (under Articles IX and XX) and therefore ECAF did not have the authority to make such an order.
Despite failure by ECAF, manufacturersblocks took matters into their own hands and initiated the so-called “EOS911 initiative”, developed by block manufacturer No. 42, in order to take security measures and return stolen funds.
This incident has raised concerns aboutcentralization of the EOS network, and rightly so, because block producers according to the EOS constitution are only an executive body that can only act with the approval of arbitration bodies such as ECAF.
In the end, this led to the fact that the founderEOS Daniel Larimer proposed adopting a completely new constitution to rule out similar situations in the future. A draft of the second version of the EOS constitution is available here.
IV. Constitution Decred
The constitution of Decred is available here.
The Decred Constitution is a better illustration of how the blockchain community can approach the constitution.
We studied Decred's constitution section by section to talk in detail about their worthy attempt to create a blockchain constitution.
Back to the definition of the constitution given inMirriam Webster online dictionary: “These are the basic principles and laws of a nation, state or social group that define the strengths and responsibilities of the government and guarantee certain rights to the people.”
Section 1 of the Decred Constitution, entitledThe “Principles” clearly establishes the 6 principles of the Decred community, with a brief explanation of each principle (thus leaving less room for ambiguity).
Such a section should definitely be, givenhow many different sets of principles and values are used in blockchain projects. It also clarifies community views for all new members and outside observers.
Section 2 titled “Blockchain Governance” is clearexplains how changes should be made to the blockchain (“on-chain decision making”). This section describes the consensus algorithm for the Decred blockchain (PoW/PoS hybrid), how Proof-of-Stake participants can take over Proof-of-Work participants, and how stakeholders can participate in the lottery system to vote for the bloc and collect subsidies. In addition, this section describes the governing bodies in the on-chain decision-making process, PoS and PoW participants, and how they interact to change the rules of the blockchain.
Section 3 of the Constitution, entitled “Managementproject, ”describes how changes are made to develop Decred through the Assembly (“ off-chain decision making). The section describes the controls in the decision-making process of the off-chain, the Decred Assembly, the Admissions Committee, the Tips for creating and dropping out.
The selection committee selects members to work inAssembly (those who received 60% or more votes). The section imposes specific restrictions on the composition of the Assembly. Namely, that it should be diverse. Next, the Selection Committee must select members based on merit, which is the sum of two factors: “(1) the amount of time the candidate has been involved in the project, and (2) the candidate’s work plan and impact on the project.”
The screening council can initiate screening by"temporary deactivation or removal of members of the Assembly by a vote of more than 60% of its members" based on two factors: "(1) significant dereliction of duty for one or more Councils or the Assembly," and/or (2) counterproductive behavior that runs counter to within the framework set out in the constitution, and without constructive action to develop the necessary solutions.”
Finally, “all cases brought before the Council shall be decided by vote within 365 days or less.”
Dividing the decision-making process into on-chain andoff-chain components are very important because they take into account the levels of complexity that arise in the blockchain community and digital management in general (code is a law to the extent that human greed can be restrained). In addition, these two sections are easily consistent with the above definition of the constitution, because they explicitly describe the management and decision-making processes of the okeyn and offchain that affect the Decred community. In particular, this applies to section 3, because it gives a detailed definition of the decision-making bodies of the on-chain and off-chain, their responsibilities, restrictions and procedures. Also, the mechanisms by which a member of the community can encourage the Councils to become transparent become transparent.
Section 4 of the Constitution, entitled“Financing,” describes how Decred will receive funds (that is, how financial management will occur) in the foreseeable future. This work is assigned to Decred Holdings Group, LLC (“DHG”), and Nevis LLC. Section 4 then describes the limitations for DHG on funding activities, such as the need to adhere to the basic principles, issue public financial statements, and make budget proposals. Section 4 also sets up the creation of a Funding Council, whose task is to develop the budget proposed by DHG. The approved draft budget is then cast to a vote by members of the Proof-of-Authority (PoA) system. DHG is also tasked with receiving and reviewing RFPs, which should contain certain information. As soon as the RFP is accepted for consideration, it becomes public to the Decred community.
Section 4 reveals one of the most important aspects.constitution and governance systems in general: how resources are extracted and distributed. Moreover, it defines how the Decred community will approve appropriate projects to develop the Decred ecosystem of goods and services.
In general, the Decred constitution is a good example for other blockchain projects on how to create constitutions.
However, there are several points that we would like to include, such as a detailed paragraph on constitutional amendments and interaction with other blockchain networks and communities.
The idea of a blockchain constitution is charming, and the scope of digital governance will expand as more and more people establish fictitious kinship within specific networks.
When considering blockchain constitutions, wereviewed these documents by EOS and Decred. The EOS Constitution, as analyzed, has failed to meet basic constitutional standards because it confuses “contractual relationships” with “constitutional relationships.”
The constitution of Decred, according to our analysis,much closer to what should be a blockchain constitution. The Decred Constitution details community principles and values, off-chain and on-chain decision making, financial management, and ecosystem growth principles.
When adopting blockchain constitutions, we recommend paying attention to such details:
- Community principles and values;
- Off-chain decision-making procedures;
- Onchain decision-making procedures;
- Financing (collection, budgeting, distribution and accounting);
- The growth of the blockchain ecosystem;
- Interaction with other blockchain communities and / or networks (that is, do I need to add cross-chain infrastructure?);
- Amendment procedures;
- Community mood;
- The existence of fractions in the community;
- A clear understanding of what the constitution is;
- Necessity or absence for an intermediate constitution.