Disclaimer: This is work in progress. Mechanisms are susceptible to change.
The governance process is divided in a few steps that are outlined below:
- Proposal submission: Proposal is submitted to the blockchain with a deposit.
- Vote: Once deposit reaches a certain value (
MinDeposit), proposal is confirmed and vote opens. Bonded Atom holders can then sendTxGovVotetransactions to vote on the proposal. - If the proposal involves a software upgrade:
- Signal: Validators start signaling that they are ready to switch to the new version.
- Switch: Once more than 75% of validators have signaled that they are ready to switch, their software automatically flips to the new version.
Any Atom holder, whether bonded or unbonded, can submit proposals by sending a
TxGovProposal transaction. Once a proposal is submitted, it is identified by
its unique proposalID.
In the initial version of the governance module, there are two types of proposal:
PlainTextProposalAll the proposals that do not involve a modification of the source code go under this type. For example, an opinion poll would use a proposal of typePlainTextProposal.SoftwareUpgradeProposal. If accepted, validators are expected to update their software in accordance with the proposal. They must do so by following a 2-steps process described in the Software Upgrade section below. Software upgrade roadmap may be discussed and agreed on viaPlainTextProposals, but actual software upgrades must be performed viaSoftwareUpgradeProposals.
Other modules may expand upon the governance module by implementing their own
proposal types and handlers. These types are registered and processed through the
governance module (eg. ParamChangeProposal), which then execute the respective
module's proposal handler when a proposal passes. This custom handler may perform
arbitrary state changes.
To prevent spam, proposals must be submitted with a deposit in the coins defined in the MinDeposit param. The voting period will not start until the proposal's deposit equals MinDeposit.
When a proposal is submitted, it has to be accompanied by a deposit that must be strictly positive, but can be inferior to MinDeposit. The submitter doesn't need to pay for the entire deposit on their own. If a proposal's deposit is inferior to MinDeposit, other token holders can increase the proposal's deposit by sending a Deposit transaction. The deposit is kept in an escrow in the governance ModuleAccount until the proposal is finalized (passed or rejected).
Once the proposal's deposit reaches MinDeposit, it enters voting period. If proposal's deposit does not reach MinDeposit before MaxDepositPeriod, proposal closes and nobody can deposit on it anymore.
When a the a proposal finalized, the coins from the deposit are either refunded or burned, according to the final tally of the proposal:
- If the proposal is approved or if it's rejected but not vetoed, deposits will automatically be refunded to their respective depositor (transferred from the governance
ModuleAccount). - When the proposal is vetoed with a supermajority, deposits be burned from the governance
ModuleAccount.
Participants are users that have the right to vote on proposals. On the Cosmos Hub, participants are bonded Atom holders. Unbonded Atom holders and other users do not get the right to participate in governance. However, they can submit and deposit on proposals.
Note that some participants can be forbidden to vote on a proposal under a certain validator if:
- participant bonded or unbonded Atoms to said validator after proposal entered voting period.
- participant became validator after proposal entered voting period.
This does not prevent participant to vote with Atoms bonded to other validators. For example, if a participant bonded some Atoms to validator A before a proposal entered voting period and other Atoms to validator B after proposal entered voting period, only the vote under validator B will be forbidden.
Once a proposal reaches MinDeposit, it immediately enters Voting period. We
define Voting period as the interval between the moment the vote opens and
the moment the vote closes. Voting period should always be shorter than
Unbonding period to prevent double voting. The initial value of
Voting period is 2 weeks.
The option set of a proposal refers to the set of choices a participant can choose from when casting its vote.
The initial option set includes the following options:
YesNoNoWithVetoAbstain
NoWithVeto counts as No but also adds a Veto vote. Abstain option
allows voters to signal that they do not intend to vote in favor or against the
proposal but accept the result of the vote.
Note: from the UI, for urgent proposals we should maybe add a ‘Not Urgent’
option that casts a NoWithVeto vote.
Quorum is defined as the minimum percentage of voting power that needs to be casted on a proposal for the result to be valid.
Threshold is defined as the minimum proportion of Yes votes (excluding
Abstain votes) for the proposal to be accepted.
Initially, the threshold is set at 50% with a possibility to veto if more than
1/3rd of votes (excluding Abstain votes) are NoWithVeto votes. This means
that proposals are accepted if the proportion of Yes votes (excluding
Abstain votes) at the end of the voting period is superior to 50% and if the
proportion of NoWithVeto votes is inferior to 1/3 (excluding Abstain
votes).
Proposals can be accepted before the end of the voting period if they meet a special condition. Namely, if the ratio of Yes votes to InitTotalVotingPowerexceeds 2:3, the proposal will be immediately accepted, even if the Voting period is not finished. InitTotalVotingPower is the total voting power of all bonded Atom holders at the moment when the vote opens.
This condition exists so that the network can react quickly in case of urgency.
If a delegator does not vote, it will inherit its validator vote.
- If the delegator votes before its validator, it will not inherit from the validator's vote.
- If the delegator votes after its validator, it will override its validator vote with its own. If the proposal is urgent, it is possible that the vote will close before delegators have a chance to react and override their validator's vote. This is not a problem, as proposals require more than 2/3rd of the total voting power to pass before the end of the voting period. If more than 2/3rd of validators collude, they can censor the votes of delegators anyway.
At present, validators are not punished for failing to vote.
Later, we may add permissioned keys that could only sign txs from certain modules. For the MVP, the Governance address will be the main validator address generated at account creation. This address corresponds to a different PrivKey than the Tendermint PrivKey which is responsible for signing consensus messages. Validators thus do not have to sign governance transactions with the sensitive Tendermint PrivKey.
If proposals are of type SoftwareUpgradeProposal, then nodes need to upgrade
their software to the new version that was voted. This process is divided in
two steps.
After a SoftwareUpgradeProposal is accepted, validators are expected to
download and install the new version of the software while continuing to run
the previous version. Once a validator has downloaded and installed the
upgrade, it will start signaling to the network that it is ready to switch by
including the proposal's proposalID in its precommits.(Note: Confirmation
that we want it in the precommit?)
Note: There is only one signal slot per precommit. If several
SoftwareUpgradeProposals are accepted in a short timeframe, a pipeline will
form and they will be implemented one after the other in the order that they
were accepted.
Once a block contains more than 2/3rd precommits where a common
SoftwareUpgradeProposal is signaled, all the nodes (including validator
nodes, non-validating full nodes and light-nodes) are expected to switch to the
new version of the software.
Note: Not clear how the flip is handled programmatically