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Governance V2

Polkadot uses a sophisticated governance mechanism that allows it to evolve gracefully overtime at the ultimate behest of its assembled stakeholders. The stated goal is to ensure that the majority of the stake can always command the network.

The contents in this document are subject to change

The governance protocol has already undergone a couple iterations (v1 and v2) with more changes in the pipeline (v2.5).

Polkadot's first decentralised governance system (v1) was comprised of three main components.

  1. Technical Committee - A technocratic committee to manage upgrade timelines.
  2. Council - An approval-voted, elected executive "government" to manage parameters, admin and spending proposals.
  3. Referenda - A general voting system for everything else which rewarded long-term stakeholders with increased influence.

This system has functioned well over the first few years of operation, helping ensure appropriate usage of treasury funds and enabling timely upgrades and fixes. Like most early technologies, the systems and protocols must evolve as they mature to improve upon their shortcomings and keep up with modern advancements. For example, in Governance v1 all referenda carry the same weight as only one referenda can be voted on at a time and the voting period can last multiple weeks. This results in the system favoring careful consideration of very few proposals, as opposed to broad consideration of many. With that being said, Governance v2 is here!

Governance v2 or Gov2 changes how the practical means of day-to-day decisions are made, making the repercussions of referenda better scoped and agile in order to dramatically increase the number of collective decisions the system is able to make.

Gov2 is set to launch on Kusama following the final professional audit of its code. Once tested on Kusama, a proposal will be made for it to be deployed on Polkadot.

The following content will begin by walking through many of the core principles of governance on the Polkadot network. It is important to understand the roots of governance v1 to better understand the direction of the second iteration. These deltas and distinctions will be highlighted throughout the various sub-topics.

This being said, it is important to remember that governance is a constantly evolving protocol at this stage in its lifecycle. As updates for Governance v2 are making their way to the networks, plans for Governance v2.5 are already in development.

Premise

At a high level, the network brings together various novel mechanisms, including an amorphous state-transition function stored on-chain and defined in a platform-neutral intermediate language (i.e. WebAssembly) and several on-chain voting mechanisms such as referenda with adaptive super-majority thresholds and batch approval voting.

All changes to the protocol must be agreed upon by stake-weighted referenda.

Mechanism

In Governance v1, active token holders and the council together administrate a network upgrade decision. No matter whether the proposal is proposed by the public (token holders) or the council, it will eventually have to go through a referendum to let all holders, weighted by stake and conviction , make the decision.

To better understand how the council is formed, please read this section.

There are several changes here with Governance v2. The way the new governance model reflects its decentralised character is by:

  1. Migrating all responsibilities of Council to token holders via democracy votes
  2. Dissolving the current Council collective
  3. Allowing users to delegate voting power in more ways to community members

The Council in Gov1 has fulfilled its role as the representative of passive token holders, guardian of the treasury and initiator of legislation, but is often seen as a centralized entity. To further decentralize Polkadot and Kusama networks, Gov2 proposes to return the responsibilities of the council back to the community.

Referenda

Referenda are simple, inclusive, stake-based voting schemes. Each referendum has a specific proposal associated with it that takes the form of a privileged function call in the runtime (that includes the most powerful call: set_code, which can switch out the entire code of the runtime, achieving what would otherwise require a "hard fork").

Referenda are discrete events that have a fixed voting period. When the voting period ends and the votes are tallied, the function call (set_code) is made if the vote is approved. Referenda are always binary; your only options in voting are "aye", "nay", or abstaining entirely.

In Governance v1, referenda can be started in one of several ways:

  1. Publicly submitted proposals;
  2. Proposals submitted by the council, either through a majority or unanimously;
  3. Proposals submitted as part of the enactment of a prior referendum;
  4. Emergency proposals submitted by the Technical Committee and approved by the Council.

All referenda have an enactment delay associated with them. This is the period between the referendum ending and, assuming the proposal was approved, the changes being enacted.

Referenda is considered baked if it is closed and tallied. Again, assuming the proposal was approved, it would be scheduled for enactment. Referenda is considered unbaked if it is pending an outcome, i.e. being voted on.

If a proposal is submitted by the public or council there is a fixed enactment delay period of days. Proposals submitted as part of the enactment of a prior referendum can set the enactment delay period as desired. Emergency proposals deal with major problems with the network that need to be "fast-tracked", which leads to shorter enactment times.

In Gov2, anyone is able to start a referendum at anytime and they can do so as many times as they wish. Several new features, known as Origins and Tracks, are introduced to help aid in the flow and processing of the referenda protocol.

An Origin can be thought of as a rich descriptor for a given privilege level. The proposer of the referenda now selects an appropriate Origin for their request based on the requirements of the proposal.

Each Origin is associated with a single referendum class and each class is associated with a Track. The Track outlines the lifecycle for the proposal and is independent from other class's tracks. Having independent tracks allows the network to tailor the dynamics of referenda based upon their implied privilege level.

So for example, a runtime upgrade (set_code call) does not have the same implications for the ecosystem as the approval of a treasury tip (reportAwesome call), and therefore different Origins are needed in which different turnouts, approvals, deposits and a minimum enactment periods will be predetermined on the pallet.

Proposing a Referendum

Public Referenda

Anyone can propose a referendum by depositing the minimum amount of tokens for a certain period (number of blocks). If someone agrees with the proposal, they may deposit the same amount of tokens to show support

  • this action is called endorsing. The proposal with the highest amount of bonded support will be selected to be a referendum in the next voting cycle.

Note that this may be different from the absolute number of endorsements; for instance, three accounts bonding 20 DOT each would "outweigh" ten accounts bonding a single DOT each

The bonded tokens will be released once the proposal is tabled (that is, brought to a vote).

For Governance v1, there can be a maximum of public proposals in the proposal queue.

In Gov2, when a referendum is initially created, it can be immediately voted on by the community. However, it is not in a state where it can end, or otherwise have its votes counted, be approved and summarily enacted. Instead, referenda must fulfil a number of criteria before they are moved into a state known as Deciding. Until they are in this state, they remain undecided.

The criteria for entering the Decided state is a follows:

  1. A lead-in period that outlines the amount of time that must elapse before deciding can begin. This helps mitigate against the possibility of "decision snapping" where an attacker controlling a substantial amount of voting power might seek to have a proposal passed immediately after proposing, not allowing the overall voting population adequate time to consider and participate.
  2. There must be room for the decision. All Tracks specify their own limit on the number of referenda which can be decided simultaneously. Tracks that have more potent abilities will have lower limits. For example, the Root level Origin has a limit of one, implying that only a single über-dangerous proposal may be decided on at once.
  3. A Decision Deposit must be paid. Creating a referendum is cheap as the deposit value consists of only the value required for the on-chain storage needed to track it. But, having a referendum reviewed and decided upon carries the risk of using up the limited spots available in the referenda queue. It makes sense to have a larger, but refundable deposit requirement to help mitigate spam.

Council Referenda (v1)

Unanimous Council - When all members of the council agree on a proposal, it can be moved to a referendum. This referendum will have a negative turnout bias (that is, the smaller the amount of stake voting, the smaller the amount necessary for it to pass - see Adaptive Quorum Biasing).

Majority Council - When agreement from only a simple majority of council members occurs, the referendum can also be voted upon, but it will be majority-carries (51% wins).

There can only be one active referendum at any given time, except when there is also an emergency referendum in progress.

Voting Timetable

In Governance v1, every days, a new referendum will be up for a vote, assuming there is at least one proposal in one of the queues. There is a queue for Council-approved proposals and a queue for publicly submitted proposals. The referendum to be voted upon alternates between the top proposal in the two queues.

The "top" proposal is determined by the amount of stake bonded behind it. If the the current queue selection attempts to create a referendum with no proposals (it is empty) and proposals are waiting in the other queue, the top proposal in the other queue will become a referendum.

Multiple referenda cannot be voted upon in the same period, excluding emergency referenda. An emergency referendum occurring at the same time as a regular referendum (either public or council-proposed) is the only time that multiple referenda will be able to be voted on simultaneously.

Governance v2 shares the same day eligibility period when the proposal can get approved. If not approved by then end of this period, the proposal is automatically rejected.

Voting on a referendum (governance v2)

In Governance v2, a proposal is approved if it meets the requirements for approval and support, removing the adaptive quorum biasing system.

Approval is defined as the share of approval vote-weight (after adjustment for conviction) against the total vote-weight (for both approval and rejection).

Support is the total number of votes in the approval (ignoring any adjustment for conviction) compared to the total possible votes that could be made in the system.

It must fulfill this criteria for the minimum of the Confirmation Period. Different tracks have different Confirmation Periods and requirements for approval and support. It is now possible to configure the amount of support and overall approval required for it to pass. With proposals that use less privileged origins, it is far more reasonable to drop the required turnout to a more realistic amount earlier than those which use highly privileged classes such as Root. Classes with more political significance can be made to require a higher approval early on, to avoid controversy.

In Gov2, proposals that are not approved after days are considered rejected by default and the Decision Deposit is refunded. If the proposal manages to stay passing until the end of the Confirmation Period, it is considered approved and is scheduled to execute from the proposed origin but after the Enactment Period . The Enactment Period is specified when the referendum is proposed but is also subject to a minimum value based on the Track. More powerful Tracks enforce a larger Enactment Period to ensure the network has ample time to prepare for any changes the proposal may bring.

Voluntary Locking

Polkadot utilizes an concept called Voluntary Locking which allows token holders to increase their voting power by declaring how long they are willing to lock up their tokens, hence, the number of votes for each token holder will be calculated using the following formula:

votes = tokens * conviction_multiplier

The conviction multiplier increases the vote multiplier by one every time the number of lock periods double.

Lock PeriodsVote MultiplierLength in Days
00.1
11
22
43
84
165
326

The maximum number of "doublings" of the lock period is set to 6 (and thus 32 lock periods in total), and one lock period equals days. Only doublings are allowed; you cannot lock for, say, 24 periods and increase your conviction by 5.5. For additional information regarding the timeline of governance events, check out the governance section on the Polkadot Parameters page.

While a token is locked, you can still use it for voting and staking; you are only prohibited from transferring these tokens to another account.

Votes are always "counted" at the same time, which is at the end of the voting period. This is not impacted by the locking period of the tokens.

Adaptive Quorum Biasing

Adaptive quorum biasing is longer used in Governance v2 and is replaced by the Approval/Support system.

Council

In Governance v1, passive stakeholders are represented on Polkadot via a governing body known as the "council". The council is an on-chain entity comprising several actors, each represented as an on-chain account. On Polkadot, the council currently consists of members.

Along with controlling the treasury, the council is called upon primarily for three tasks of governance:

  1. Proposing sensible referenda
  2. Cancelling dangerous or malicious referenda
  3. Electing the Technical Committee

In Governance v2, an alternate strategy was required to replace the Council in its previous duties as a body delegated by voters to compensate for the fact that many choose to not take part in day-to-day of governance. Gov2 builds on the Vote Delegation feature from v1 where a voter can choose to delegate their voting power to another voter in the system. It does so by improving a feature known as Multirole Delegation, where voters can specify a different delegate for every class of referendum in the system. So for example, a voter could delegate one entity for managing a less potent referenda class, choose a different delegate for a different class with more powerful consequences and still retain full voting power over any remaining classes.

Canceling Referenda

In Governance v1, a proposal can be canceled if the Technical Committee unanimously agrees to do so, or if Root origin (e.g. sudo) triggers this functionality. A canceled proposal's deposit is burned.

Additionally, a two-thirds majority of the council can cancel a referendum. This may function as a last-resort if there is an issue found late in a referendum's proposal such as a bug in the code of the runtime that the proposal would institute.

If the cancellation is controversial enough that the council cannot get a two-thirds majority, then it will be left to the stakeholders en masse to determine the fate of the proposal.

In Governance v2, there is a special operation called Cancelation for intervening with a proposal that is already being voted on. The operation will immediately reject an ongoing referendum regardless of its status. There is also a provision to ensure the deposit of the proposer is slashed, if the proposal is malicious or spam.

Cancelation itself is a governance operation which must be voted upon by the network in order to be executed. Cancelation comes with its own Origin and Track which has a low lead-time and Approval/Support curves with slightly sharper reductions in their thresholds for passing, given that it is invoked with a sense of urgency.

Technical Committee

In Governance v1, the Technical Committee (TC) was introduced in the Kusama rollout and governance post as one of the three chambers of Kusama governance (along with the Council and the Referendum chamber). The TC is composed of the teams that have successfully implemented or specified either a Polkadot runtime or Polkadot Host. Teams are added or removed from the TC via a simple majority vote of the Council.

The purpose of the TC is to safeguard against malicious referenda, implement bug fixes, reverse faulty runtime updates, or add new but battle-tested features. The TC has the power to fast-track proposals by using the Democracy pallet, and is the only origin that is able to trigger the fast-tracking functionality. We can think of the TC as a "unique origin" that cannot generate proposals, but are able to fast track existing proposals.

Fast-tracked referenda are the only type of referenda that can be active alongside another active referendum. Thus, with fast-tracked referenda it is possible to have two active referendums at the same time. Voting on one does not prevent a user from voting on the other.

In Governance v2, a new successor committee was introduced, known as the "Polkadot Fellowship", to replace the Technical Committee. It will serve both the Polkadot and Kusama networks. See additional details below.

Polkadot Fellowship

The Fellowship is a mostly self-governing expert body with a primary goal of representing humans who embody and contain the technical knowledge base of the Polkadot network and protocol. This is accomplished by associating a rank with members to categorize the degree to which the system expects their opinion to be well-informed, of a sound technical basis and in line with the interests of Polkadot.

Unlike the current Technical Collective, it is designed to be far broader in membership (i.e. to work well with even tens of thousands of members) and with far lower barrier to entry (both in terms of administrative process flow and expectations of expertise). Becoming a candidate member in the Fellowship is as easy as placing a small deposit.

Members of the Fellowship can vote on any given Fellowship proposal and the aggregate opinion of the members (weighted by their rank) constitutes the Fellowship's considered opinion.

The mechanism by which the Fellowship votes is the same as what is used for Polkadot stakeholder voting for a proposed referendum.

Ranking System

So how exactly does this ranking system work?

To prevent a small group of participants from gaining effective control over the network, this system will adhere to three main principles:

  1. The Fellowship must never have hard power over the network: it cannot change the parameters, conduct rescues or move assets. Their only power in governance resides in the the ability to reduce the effective timeline on which a referendum takes place.
  2. The Fellowship weights those with a higher rank more in the aggregate opinion, however the weight should not be so high as to make a small number of higher members’ opinions be insurmountable when compared to a coherent opinion coming from lower-ranked membership.
  3. The Fellowship should be designed to grow and develop its membership and their aggregate levels of expertise and in doing so ensure that its overall decision-making capacity gets stronger over time.

To support these conditions, the Fellowship will have a constitution which outlines the requirements and expectations for individuals to attain and retain any given rank. Higher ranks are able to vote and promote lower ranks based on this constitution.

Demotion occurs automatically after a given period has elapsed and the member is unable to defend their position to their peers.

Suspension can happen only through general referendum, which ensures that the Fellowship's bias alone does not necessarily result in expulsion.

To prevent the Fellowship from becoming a cabal (popularity with Fellowship peers alone should not be enough to gain access to a top rank), gaining access to top tiers of the ranks will require a referendum.

Whitelisting

The Whitelist pallet does one thing: it allows one Origin to escalate the privilege level of another Origin for a certain operation.

In Gov2, it allows the Fellowship to authorise a new origin (known as Whitelisted-Root) to be executed with Root-level privileges and will only work with certain specified commands that have been authorised by the Fellowship. The Whitelist pallet verifies two things:

  1. The origin really is the Whitelisted-Root (i.e. that the referendum passed on this track)
  2. The proposal has indeed been whitelisted by the Fellowship.

If both conditions are true, the operation executes with Root-level privileges.

This system enables the ability to have a new parallel Track (Whitelisted-Root Origin), whose parameters allow for a shorter voting turnaround. Through an open and transparent process, a body of global experts on the Polkadot protocol have determined that the action is both safe and time-critical.

Blacklisting

A proposal can be blacklisted by Root origin (e.g. sudo). A blacklisted proposal and its related referendum (if any) are immediately canceled. Additionally, a blacklisted proposal's hash cannot re-appear in the proposal queue. Blacklisting is useful when removing erroneous proposals that could be submitted with the same hash, i.e. proposal #2 in which the submitter used plain text to make a suggestion.

Upon seeing their proposal removed, a submitter who is not properly introduced to the democracy system of Polkadot might be tempted to re-submit the same proposal. That said, this is far from a fool-proof method of preventing invalid proposals from being submitted - a single changed character in a proposal's text will also change the hash of the proposal, rendering the per-hash blacklist invalid.

Resources