Governance
Governance on the SGE network
Anyone with SGE tokens can participate in the governance of the SGE Network chain, but it's important to be transparent about what that actually means in the current state.
Governance Proposals CAN:
Facilitate blockchain technology changes and upgrades.
Be a mechanism for the community to express social consensus that helps contributors organize and prioritize work in order to deliver new features.
Governance Proposals DO NOT:
Provide control or enforcement ability. Ownership & voting of tokens does not give the right to control developers, other contributors, other stake holders, or any related entities.
Neither do they give token holders any right over or right to direct tokens held in “treasury” or other categories. (With that said however, more detail around the design & function of a "Community Pool" or "Grant Program" will be released as it is developed in due course).
Governance Proposal Types:
A governance proposal may be created by anyone. Governance proposals are primarily of three types:
Parameter change proposals
Software Upgrade proposals
Community Pool spend proposals (TBD)
Once a governance proposal is created, it goes through the following phases.
Deposit Period
Deposit amounts are at risk of being burned. Prior to a governance proposal entering the voting period (ie. for the proposal to be voted upon), there must be at least a minimum number of SGEs deposited (512). Anyone may contribute to this deposit. Deposits of passed and failed proposals are returned to the contributors. Deposits are burned when proposals:
Expire - deposits will be burned if the deposit period ends before reaching the minimum deposit (512 SGE)
Fail to reach quorum - deposits will be burned for proposals that do not reach quorum ie. 40% of all staked SGE must vote
Are vetoed - deposits for proposals with 33.4% of voting power backing the 'NoWithVeto' option are also burned
Voting Period
The voting period is currently a fixed 14-day period. During the voting period, participants may select a vote of either 'Yes', 'No', 'Abstain', or 'NoWithVeto'. Voters may change their vote at any time before the voting period ends.
Abstain: indicates that the voter is impartial to the outcome of the proposal
Yes: indicates approval of the proposal in its current form.
No: indicates disapproval of the proposal in its current form.
NoWithVeto: indicates stronger opposition to the proposal than simply voting 'No'. If the number of 'NoWithVeto' votes is greater than a third of the total votes excluding 'Abstain' votes, the proposal is rejected and the deposits are burned.
What are the passing criteria of a proposal?
There are four criteria:
A minimum deposit of 512 SGE is required for the proposal to enter the voting period
anyone may contribute to this deposit
the deposit must be reached within 14 days (this is the deposit period)
A minimum of 40% of the network's voting power (quorum) is required to participate to make the proposal valid
A simple majority (greater than 50%) of the participating voting power must back the 'Yes' vote during the 14-day voting period
Less than 33.4% of participating voting power votes 'NoWithVeto'
How are Votes Tallied
Voting power is determined by stake weight at the end of the 14-day voting period and is proportional to the number of total SGEs participating in the vote. Only bonded SGEs count towards the voting power for a governance proposal. Liquid SGEs will not count toward a vote or quorum. Inactive validators can cast a vote, but their voting power (including the backing of their delegators) will not count toward the vote if they are not in the active set when the voting period ends. That means that if I delegate to a validator that is either jailed, tombstoned, or ranked lower than 125 in stake-backing at the time that the voting period ends, my stake-weight will not count in the vote. Though a simple majority 'Yes' vote (ie. 50% of participating voting power) is required for a governance proposal vote to pass, a 'NoWithVeto' vote of 33.4% of participating voting power or greater can override this outcome and cause the proposal to fail. This enables a minority group representing greater than 1/3 of voting power to fail a proposal that would otherwise pass.
How is Quorum Determined
Voting power, whether backing a vote of 'Yes', 'Abstain', 'No', or 'NoWithVeto', counts toward quorum. Quorum is required for the outcome of a governance proposal vote to be considered valid and for deposit contributors to recover their deposit amounts. If the proposal vote does not reach quorum (ie. less than 40% of the network's voting power is participating) within 14 days, any deposit amounts will be burned and the proposal outcome will not be considered to be valid.
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