A literal Overview of Darwinia Network Governance System

What is governance and why do we need governance?

Governance is the way rules, norms, actions are structured, sustained, and regulated, this is usually done by a governing body. The most formal is a Government, they are expected to make decisions that will foster innovation and long-term collaboration.

But in what style of governance can this truly be achieved?

The Traditional Governance System takes a different approach to governance by the means of centralization where power is concentrated in the hands of few people. This leads to low public participation which means decisions are made by a few people in control. This system also leads to a central point of failure. (See Appendix A)

What approach is Darwinia Network taking?

Darwinia Network approaches governance with the views of Decentralization. First, what is decentralized governance?. It’s the exact opposite of centralized governance, where functions and responsibilities are distributed among people. The decentralized system encourages public participation, as decision-makers are closer to the population and can propose changes that address the specific needs of local communities and minority groups.

How is Darwinia Network achieving this system of Decentralization?

Firstly, Darwinia Network native token is RING while KTON is Darwinia Network commitment token. RING is used as gas for transactions such as contract execution fees, storage fees, transaction fees, and more. A commitment to lock RING for 3-36 months produces KTON as a reward. KTON plays a significant role in the governance of Darwinia Network by acting as a certificate of commitment. (See Appendix B & C)

In Darwinia Network, the security and elongation of the blockchain are of high priority. This can be achieved by a type of Proof Of Stake algorithm (POS) called Nominated Proof Of Stake which involves Validators and Nominators. You can visualize this as an election process where the people (Nominators) vote in an accountable individual(Validator) to lead them. The "stake" word in "Nominated Proof Of Stake" means that for nomination to occur, the users must pledge RING and KTON to vote in their favorite validator(s) to provide computing nodes for the network and obtain staking rewards for the entity in that Era. (See Appendix D & E)

An entity comprises of the Validator and Nominators while an Era (one week) is the period of governance before the next election. A validator is expected to provide infrastructure and maintenance for the network. They are also responsible for adding new blocks and verifying transactions on the blockchain. Nominators can also choose to vote for one or more Validators but a Nominator cannot be a Validator at the same time and vice versa. If you are having a hard time understanding these processes, please feel free to use the analogy of a real-world election process stated above.

Nominators must select an accountable Validator to avoid facing the impact of the slash algorithm. This algorithm is designed to slash the staked RING and KTON, if and only if the validator is irresponsible or trying to attack the network.

So, how is a Decentralized approach better?

There is full transparency in the electoral process and Nominators can participate and make decisions effectively with their Validators, unlike centralized governance where the power of decision-making is concentrated in the hands of few people coupled with a lack of transparency in the electoral process.


Appendix A: Centralization and Decentralization

Appendix B: Darwinia Native Token: Ring

Appendix C: Darwinia Commitment Token: Kton

Appendix D: Nominated Proof Of Stake

Appendix E: Darwinia Network Genepaper