Namada's governance system is designed to be flexible and community-driven, allowing for decentralized decision-making and protocol evolution with a focus on privacy. We would like to delve into the structure and then discuss each part of governance's implications.
Governance Participants
The governance participants are standard when it comes to a Cosmos ecosystem.
- Validators: Responsible for voting on blocks and can vote on governance proposals.
- Delegators: Users who bond NAM tokens to validators can vote on proposals.
Voting Power Allocation
- Voting power is proportional to the amount of bonded NAM tokens.
- Both validators and delegators with bonded stake can participate in governance.
Proposal System
- Any user account can submit a governance proposal on-chain.
- Proposals can include metadata and optional code for protocol execution if accepted.
- Submitters must provide a minimum token amount (min_proposal_fund) to prevent spam.
- The funds are refunded if the proposal passes. This comes across as an “attention fee.”
Voting Structure
Tiered voting system
- Validators may only vote in approximately the first 2/3 of the active voting period.
- Delegators can override their validator's vote if desired.
- The delegator's vote always takes precedence over the delegate's vote.
Governance Parameters
- Minimum proposal fund
- Minimum and maximum proposal voting periods
- Grace periods between proposal end and activation
- Maximum proposal latency
Types of Proposals
- Default proposals
- With a wasm payload: Grants, bug bounties, new ideas, topics that need social consensus before execution
- Without a wasm payload: Parameter changes, state change on-chain
- Custom proposals
- Eth Proposal: This governance proposal is a unique type, restricted solely to validators, as it involves executing function calls on the Ethereum smart contract that manages the ETH-Namada bridge
- PGF Proposals: These specialized proposals are submitted by elected Public Goods Funding (PGF) Stewards and focus specifically on RPGF and CPGF initiatives. These proposals are automatically approved unless vetoed by the community through a voting process.
- Continuous Public Goods Funding (CPGF): This provides ongoing support for projects that benefit the Namada ecosystem and the broader blockchain space.
- Retroactive Public Goods Funding (RPGF): This mechanism enables the community to reward projects that have already delivered valuable public goods, even if they were not initially funded through CPGF.
- Steward Proposals: Any Namada user can submit a Steward Proposal to nominate new PGF Stewards or remove existing ones. This process ensures that the community has a voice in selecting individuals responsible for managing public goods funding..
- Protocol Upgrades: Changes to the network's functionality.
Approval Process for PGF Steward Proposals
- At least 1/3 of Namada's voting power must participate.
- And a majority of votes must be in favor.
Offline Governance
- Proposals can be submitted offline during network issues (e.g., chain halts).
- Proposals that are made offline are then submitted on-chain as the signature over the hash of a JSON
- Uses a predetermined communication service for vote submission and verification.
Mainnet Launch Governance
Namada's proposed mainnet launch involves a five-phase process, each requiring community consensus to proceed:
- Block Party: Introduces on-chain governance and proof of stake.
- Staking Party: Enables staking rewards and public goods funding.
- Shielding Party: Allows transfers and shielding of governance-enabled IBC assets.
- Shielding Rewards Party: Introduces rewards for shielding assets.
- NAM Party: Enables NAM token transfers.
Key Features
- Uses WASM and ABI payloads for flexible on-chain proposals.
- Accommodates hard-fork coordination when necessary.
- Designed to give users ownership of the protocol.
- Balances the need for community input with privacy protection.
Implications for the Ecosystem
This approach to governance and public goods funding is expected to have a number of positive implications for the Namada ecosystem:
- Encourages Innovation: By providing financial support for public goods, Namada incentivizes developers and researchers to build innovative solutions that benefit the entire community.
- Attracts Talent: A strong commitment to public goods funding is likely to attract talented individuals passionate about building a more equitable and privacy-focused future.
- Sustainability: Funding public goods helps to ensure the long-term sustainability of the Namada ecosystem, as it supports the development of essential infrastructure and resources.
- Community Ownership: Namada's governance model empowers the community to actively participate in decision-making processes related to public goods funding, fostering a sense of ownership and shared responsibility.
- Data Protection as a Public Good: Namada explicitly emphasizes the importance of data protection as a public good. The platform uses advanced cryptographic techniques to shield user data and incentivizes users to contribute to the "shielded set," a pool of shielded assets that enhances the privacy of the entire network. This focus on data protection aligns with Namada's broader mission of fostering a more private and secure blockchain ecosystem.
Conclusion
Namada's governance system aims to be inclusive, flexible, and responsive to community needs while maintaining the protocol's focus on privacy and data protection as public goods. At Chainflow we appreciate the commitment to public goods because it helps build a strong foundation and culture within the community. This aligns with our values, especially when we focus on giving the power back to the people. It’s easier for protocol participants to see the long-term vision and pivot smoothly if needed. Due to the plethora of public goods being built and focus on privacy, Namada can create an environment where privacy-focused problems can be creatively and efficiently solved.
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