M3 Governance Proposal & Town Hall Announcement

Technical Updates | March 16, 2018
Home » Company » Blog » M3 Governance Proposal & Town Hall Announcement

In our last post, we mentioned our M3 Roadmap. One of the first steps is establishing a governance proposal for the protocol. We have been working on a governance proposal and would appreciate Community feedback. Please review the following M3 governance proposal and provide feedback to our M3 Governance Proposals Town Hall on Reddit on Monday, March 19th at 7-9 a.m. CT / 1-3 p.m. UTC.

  1. Introduction – The following documents the proposed governance model for the Factom Authority Servers and the Factom network. The network will be initially governed by a set of Guides entrusted with promoting the best interests of the Factom protocol and the community of users depending on the continued orderly operation of the protocol. The long term plan is to automate most, if not all, aspects of governance of the protocol. As an interim step, the Guides will provide governance which is being done to allow a period of experimentation where policies can be swiftly adjusted to meet the needs presented by running the protocol in a real world setting. As we settle on workable processes, they will be implemented into the protocol. The long term goal is a fully automated protocol.
  2. Guides – Guides are a group of people charged with maintaining orderly operation of the protocol. Guides will be phased out over time as more and more of the functions they perform are automated into the protocol. The Guides, as a starting point, will allow the community flexibility to easily experiment and improve the governance processes before they are committed to code.
    1. Guide eligibility standards  – A Guide can be any individual of good moral character with a demonstrated interest in the long term best interests of the Factom protocol, willing to serve the community of users and recognized by the user community as a leader.
    2. Guide responsibilities – Guides are charged with maintaining the orderly operation of the Factom protocol network. Maintaining the orderly operation of the network includes ensuring an adequate number of applicants to run a large enough pool of servers to ensure 65 servers are always available for the Authority Set. Guides will meet at least once a week. Guide meetings do not have to be in person.
    3. Guide team makeup – The Guide team will be made of of 5 individuals.
    4. Nomination of Guides – Two guides will be nominated by Factom Inc., two Guides will be nominated by the testnet community and one guide can be nominated by anyone. (The exact nomination process has yet to be decided.)
    5. Ratification of Guides – Ratification process has yet to be defined.
    6. Guide remuneration –  Guides will be compensated for their time by the award of tokens from the Grant Pool. Guides will be awarded 50 tokens a month for their service, or some other metric yet to be determined.
  3. Authority set – The set of 65 servers authorized to be leader and audit nodes is the Authority Set.  Membership in the Authority Set will be granted and removed by the Guides based on the results of campaigns.
    1. Campaigns –  Campaigns are the process by which applicants wishing to be authorized to run an Authority Set node publish their desire to participate and document their qualifications.
      1. Campaign document  – Applicants wishing to have a node considered for promotion to the Authority Set will publish a campaign document documenting the campaign factors associated with the node and the applicant’s supporting the node.  The Guides will take into account the Campaign factors as well as the general standing of the applicant in the community in deciding which servers to promote into the Authority Set. (Note: Campaign document has yet to be defined.)
      2. Campaign factors –  The following are some factors that will be considered as indicators when deciding which servers to promote into the Authority Set. (Note: The weightings are a work in progress and will be revised based on community input. Also note we may not have all the factors identified yet. Please feel free to suggest others.)
        1. Node Reliability – The applicant will demonstrate the ability to reliably run a node by having run a production Factom node or having run a node in the Factom testnet. Nodes demonstrating the highest reliability will be given first priority. This also includes planned availability of a maintenance team. (Note: Some objective criteria will need to be documented.) Proposed weight is 40%.
        2. Support of Protocol – Applicants commitment to the support of the Factom protocol will be a factor considered. The protocol will allocate to a token pool a percentage of the overall tokens.  The campaigner can take some amount less than 1/65th of the pool inflows. The token pool not taken by the campaigner will be used for grants to support the protocol. Proposed campaign influence weight is 30%.
        3. Node technical specification – Nodes with the highest performing technical specifications will be priority for promotion to leader/audit node status. (There is some question as to there being a minimum specification and this being a “yes/no” on the minimum specification. The argument against this is the minimum spec will be a moving target and the cost of servers will always be a natural restraint.)  Proposed weight is 30%.
        4. Location – Having Authority nodes spread out over different geographies, jurisdictions, ASNs, and service providers will help keep the network running through localized failures.
    2. Authority set removal –  Non-responsive nodes and nodes that do not maintain a minimum up-time (to be defined) will be removed from the Authority Set.  Removed nodes can campaign to re-enter the Authority Set once the issues are resolved. Additional removal processes have yet to be defined.
    3. Authority node ratification – The Authority Node ratification process is yet to be defined.
  4. Protocol Support Grants – A pool of tokens will be maintained by the protocol to support upkeep, enhancement, and promotion of the protocol. The pool will come from token deferment commitments made by Authority Set members as a part for their campaign to join the Authority Set.
    1. Grant Proposals –  Proposals for grants may be made by anyone with an identity within the Factom protocol. A grant proposal will specify what is to be accomplished with the tokens awarded, a time frame for accomplishing the aims of the grant, a general description of how the aims will be achieved, and a measurement by which success of the grant can be measured.
    2. Grant Approval Process – Grants will be awarded based on proposals that receive a score of 60 or more, of 100 using the following weighted set of factors.  Multiple different factors will be used to limit gaming.
      1. Proof of stake – Proof of stake via Factoid ownership will provide up to 20 of the 100 grant points. To vote proof of stake, tokens are assigned an identity and that identity will provide a relative number of votes equal to the number of staked tokens. Both retrospective and prospective staking is being considered.
        1. Retrospective staking – Any change to the tokens at that address invalidates the proof of stake vote. Grant points will be awarded based on the percentage of all tokens allocated to proof of stake voting for that grant proposal. An equal percentage of the total proof of stake points will be awarded in support of the grant.  Tokens allocated to a proof of stake address defined in an identity will accrue 5% of the original token count each month they are left in the proof of stake address until 24 months. After 24 months, no further weighting will accrue.
        2. Prospective Staking – Tokens can be sent to an address which doesn’t allow tokens to move from it for a predefined period of time. Token locking functionality is not yet implemented in Factomd, and wouldn’t be ready for the M3 launch.
      2. Proof of use –  Proof of use will provide 20 of the 100 grant points and will be awarded based on percentage of entry credits purchased in the last 6 months on a sliding scale. The 20 grant points will be awarded in proportion to the number of entry credits voted over the total of all eligible tokens voted. Tokens eligibility will be on a sliding scale with those purchases in the last 30 days 100% eligible, which the eligibility of tokens purchased in each preceding month reduces by 20% such that credits purchased more than six months back would have no voting eligibility.
      3. Guide support – Guide support will provide 30 of the 100 grant points and will be awarded based on the percentage of Guides voting for the grant proposal.
      4. Authority Set Support –  Authority Set support wil provide 30 of the 100 grant points and will be awarded proportionally to the percentage of Authority Set holders voting for the grant.
      5. Grant award process – Grants will be awarded on a regular cadence (to be defined) by the Guides based on the scoring above. On the award date, grant applications will be sorted by the grant score, and then application date, and the top applications will be awarded until there are no longer enough remaining tokens to fully award the next grant.  (Note: details of the voting process have yet to be worked out.)
      6. Sunset – This grant approval process will be revisited and updated with learnings and research after a set number of months that is yet to be determined.

Factom Community, we value your feedback and look forward to furthering our conversations about M3 and achieving this monumental milestone with your help.

POSTED: March 16, 2018 BY Jay Smith IN Technical Updates

Before joining Factom, Smith was at Virtusa where he lead creation of a new agile consulting practice, a new market for the company. His past work experience includes leading large accounts as a senior program manager for Wipro and directing business units at CGI for 18 years. Through his 25 year career, Smith designed and built a broad range of systems for financial services firms giving him a deep understanding of the needs of the industry.