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PBA Special: Polkadot Governance & Beyond
Recorded: April 7, 2025 Duration: 0:56:09Space Recording
Short Summary
The panel discussion on Polkadot governance reveals a significant shift towards decentralized governance models, emphasizing community engagement and transparency. As projects evolve, the importance of effective governance mechanisms is increasingly recognized as crucial for the growth and sustainability of blockchain ecosystems.
Full Transcription
Hello.
Yes.
Hey everybody.
All right.
Welcome to this panel discussion which is about Polkadot governance and beyond apparently.
Not only are we speaking with you today, but we're speaking with thousands of people around the world via live streaming technology. Let's give a quick round
of applause for Henrik and everybody who set this up. Okay, that was a pretty epic presentation by
Bill there, gave you a good primer on what to expect if you enter governance. I know you guys have received a lot of information about
governance. This panel is going to be particularly with a few people who are
deep in Polkadot governance, really integral to keeping the governance
machine in motion. It's important to remember, you can try to prove me wrong here, but without some sort of governance mechanism, there is no Web3.
It's only a matter of time before your blockchain either becomes irrelevant because it's unable to change,
or some central point is corrupted or makes the wrong decision and the blockchain becomes useless to the world.
Gavin Wood himself, who I think you'll have the pleasure of meeting tomorrow, maybe,
he's even cited the calcification of power in Ethereum as one of the main motivators
to move on and create Polkadot and create the governance system that we're going to speak about today.
Now, governance is a process, this ultimate social layer that's able to dictate the future of the chain,
sort of aim the arrow, as well as spend its resources, is an aspirational goal.
It's by no means perfect today, but like a small child growing up, it's making mistakes, it's learning,
and it's becoming stronger, better, and more resilient.
So I'm going to introduce you to the wonderful people we have on the panel first.
Raul.
Maybe introduce yourself real quick.
Sure.
Hello.
So, I mean, as Phil said, I'm the one here for the LOLs, right?
Yeah.
But before that, I was one of the council members on the Governance One model a few years ago.
I was very active back then. I'm still very active on open golf. I've been working on
governance on Polkadot since the very beginning since 2019 and
My first block my first blockchain job was in 2014 at the Ethereum Foundation
And I have a background in political science as well. Beautiful. Okay, we're gonna dig into that a little bit more
Otar why don't you introduce yourself? Yeah, my name is Otar, don't try to pronounce it. I'm working with this guy
Also on the governance and the Treasury side of the things
So our job is mainly to be a bridge of the information between the community and the technical teams
We usually help the teams to propose the changes, configuration adjustments,
and help the Kusama and Polkadot communities to steer the direction of both networks.
This involves also the treasury submissions all the way from the drafting of the proposal
to its on-chain submission and eventual approval.
Yeah, that's what we do.
All right.
Super stuff. And my name is Jay Turana.
I'm the director of an organization called The KUS.
And we're actually a treasury-funded organization
with the mandate of keeping everybody who's building Polkadot,
the regulators, people in the Web3 Foundation, Parity,
people doing governance, all on the same page.
There's a lot going on, and information asymmetry is real.
So we do this through many shows throughout the week,
including on Mondays and Thursdays a show we call Attempts at Governance.
I just finished episode 221,
where we have people who are proposing to spend our glorious treasury
come on and tell us why we should vote for them to do that.
And also we debate some key improvements to the governance process and it's a really great show.
I'll let you know how you can get involved in that at the end of this talk.
But first of all, you said you started working in governance in 2014?
No, in 2019.
2019?
Okay. And you started working in blockchain. Yeah. And what year was that? 2014. 2014. Okay, gotcha, gotcha. Yeah. What was your first taste of governance when you started working in this ecosystem? What was the first big influential success or tragedy? What was happening in the early days? Yeah, so I think my first encounter
at the discussion of governance was actually the very big discussion of should we have off-chain
governance or should we have on-chain governance? How do we make decisions? I mean, governance is,
after all, a decision-making process. And the first incident I encountered that got me to be more interested in governance and governance models on chain was the DAO hack.
I was working at parity back then.
And then the parity multisig hack, I was working at parity back then as well.
So that's how I got more interested in ways to solve these particular situations and incidents and the debate between consensus versus immutability.
Can you set up the multi-sig hack there for us for those who weren't paying attention at the time?
Yeah, so the multi-sig hack was a vulnerability encounter in a smart contract on Ethereum.
The smart contract was developed by parity technologies, with parity devs,
and a lot of people were using it to raise funds for projects back,
we're talking about the bull market back in 2017, I think.
So very, very good year for blockchain.
And there was a vulnerability and an attacker
took advantage of the vulnerability
and stole hundreds of millions of dollars worth of tokens from this multi-sig smart contract.
This multi-sig had ETH tokens?
Yes.
And it's worth hundreds of millions of dollars today?
Yes, I believe so.
Those tokens belong to Parity?
Not only.
So part of the tokens that were stolen were going to be destined to fund actually Polkadot development.
Right.
Some others were from other projects.
Many projects were using the smart contract, not only Parity itself.
It was a public smart contract on Ethereum network and so on.
So this hack happened worth hundreds of millions of dollars.
And what was the proposal to fix this
problem? So we were quite fresh on the DAO hack and so a lot of people were
had the same idea on the DAO hack solution. It was let's reverse the
network and see what happens. Different to the DAO hack, there was a lot of resistance towards reversing the network yet again.
After the DAO hack, the Ethereum Foundation was against it.
So eventually, this was not solved.
This was not, it was not a situation that was ever solved with regards to the recovery of the tokens.
And were those tokens just made unavailable or was somebody able to take them? So I believe there's actually
a track right now in which you can see if the tokens are moved or not. I believe
they were moved a couple times, some of them, but some are still there. It's
governance whether it's on-chain or off-chain is super super high stakes.
Yeah. Right now in the Polkadot treasury, we have $113 million worth of assets.
That's at today's prices.
I've seen them as high as $400,000.
And yeah, we see all the time people come through governance
and either they've already done the work,
they've already committed time to something,
they need just a couple hundred thousand dollars, guys, to settle the books,
and they don't get it. It's a big deal.
Otar, what do you think happened in your life that made you so interested in governance here?
Yeah, there's like two steps.
First is how I got into like blockchain.
So I come originally from Georgia I witnessed in
my life revolutions wars I witnessed hard political situations so I was always
doubtful about the systems which we had and that influenced my research what's
available and how the other countries systems deal with those kind of situations.
So by 2015 I was exploring Ethereum and the Bitcoin but it was way too complex to me.
But soon enough in 2020 I started working at Parity as a working student, not on the governance
side of the thing. But the idea of the forklift upgrades was very fascinating to me.
And the Polkadot is the next generation of the blockchain,
which not only could do what Ethereum could do,
and like Bitcoin, but it could also interact
and connect multiple blockchains with each other
and exchange the value was fascinating.
So how the decisions are made here.
And that's how I started following the Polkadots
that time governs one model.
And then I got very fascinated
how the future could look like.
And that was a decision when I decided
I'm going to translate to something
that is a little bit more familiar to me
than writing the code
because I'm not a developer myself.
And the DAO provides you possibility to combine, right?
This is a multidisciplinary discourse involving like political science, economics,
sociology and many more right so that was like a perfect match for me. It's
deeply fascinating. I want to talk on this on-chain versus off-chain a little
bit. One of the most interesting things about Polkadot governance, I always blow
people away when I tell them this, Maybe you've already heard, but everything that's voted on chain is going to happen. It's self-executing. If the Dow
votes to send a million dollars out of the treasury, well, you can't stop it. And if the Dow votes to
irrevocably damage the chain, you also can't stop that. You have to go back around and change it.
Very, very high stakes. So that's a super, on-chain. You have on-chain kind of token signaling where some sort of council
then carries out the wishes of those signals and then you have total off-chain
governance. Let's talk about the advantages of total off-chain
governance. Why does that work and why do so many choose to do it that way?
I think there's very few
advantages. It's a challenging question. I think one big advantage is that it's quite an efficient
decision-making process in terms of speediness. Yeah. So it can be very fast, it can be very speedy and you can purposely set aside or obscure information and data that you don't want the general public to know, which might be good for marketing purposes or communications purposes, but it might not be good for transparency reasons.
It depends. It's a trade-off there. You need to decide which side are you on.
But I would say that speediness is a very important benefit
and advantage of off-chain governance itself.
Yeah, absolutely.
On the far side, just one person making decisions,
that's as efficient as you can get?
Yeah, sure.
I mean, in general, it's a group of people.
The problem with off-chain governance, in my opinion,
is that it tends to be very obscure.
And it tends not to follow
stakeholder or token holder majority decision making. But it can happen also on on-chain
governance as well when you have governance model that actually privileges the decision
of a particular segment or agent in the network like for example validators. Bill was talking about
validators having to change their setups when there is an upgrade but if
validators get into an agreement and they say no we don't want this,
then you have a problem. So at the end of the day in this
type of governance models which also happens on chain but it is a
combination of off-chain and on-chain governance processes.
Validators or miners tend to have a lot of powers on protocols and I think as a
pure on-chain governance in the way Polkadot has allows you with its
automatic execution and decision-making it allows you to kind of like mitigate
this particular disadvantages of off-chain governance but also on some models and on-chain.
Yeah, no doubt. I guess Bitcoin is an example of where the validators have or
the miners have all the power basically in the direction of the network.
Also Cosmos, that was a two people staked to validators and then validators
actually voted and made the final choice. It's interesting because people who run
the machines that validate networks
don't necessarily know about everything that you need to make an ecosystem run.
And I mean, don't get me wrong, validators are a essential part of the ecosystem,
essential part of the network, and their voices need to be heard. But there's so many other agents
inside the network that also need to be heard. You have so many other agents inside the the network that
also need to be heard you have nominators who whose interest may not
aligned with validators in general they do but they might not you have investors
you have developers you have the end users you have other type of end users
the ones that do not use the retail applications on ecosystems. You
have the ones that use maybe part of the code but not
everything. You have parachains, you know, so there's so many agents in the
ecosystem you need to hear and I personally think that the best way to
hear them all is by the method that we have on OpenGov with Polkadot.
Beautiful. Well let's let's work our way there. But first, Otar, maybe you could tell us a little bit about
why it's useful to have votes and things happen on-chain
versus in a private room.
Obviously, the transparency is the first thing, right?
I mean, if you have everything on-chain, everything is visible,
and it's easier to see what was the consensus,
what was the decision made, and how the decision was made
and then you can actually see the rules of the game rather than having some sort of like off-chain coordination
in some sort of forum where people discuss the things and then randomly agree that this is the case
and have to somehow another find the ways how to coordinate and enact this on-chain.
On the other hand then we have a like on-chain metrics
and on-chain mechanisms how to enact,
as you mentioned, run things.
Once code, which is noted on-chain,
gets approved by the community with the specific rules,
which has been already predefined,
it automatically gets executed.
And there's no multisig, there's no pseudo,
there's no some other sort of coordination requirement
to enact those particular improvements.
Totally.
Something interesting that you brought up there, Raul, we were talking about on and off chain,
but you were also talking about concentrations of authority as well.
And you mentioned that this, even if it's all on chain, we do have concentrations of authority as well.
This was actually part of the journey for Polkadot.
When I first came on the scene,
when I first started getting little tips actually from the treasury, we were in something we call now Governance One. What did this look like? Governance One, due to the concentration of power,
was very effective to solve bugs or any emergency issues on the network in comparison to OpenGov but
eventually became super complex. As Bill said there were first-class citizens and
second-class citizens right and although everything happened
transparently and in the open and in a lot of the decision making for particular calls and for particular proposals,
only the console had the authority or the power to enact them or execute them.
And even if sometimes the token holders would propose things,
they needed kind of like the stamp of this console that was only, I think,
I think the biggest console
was 17 members. It was 19 on Kusama and 13 on Polkadot.
So it's a very small group right and the consoles were elected by the
token holders so token holders you could submit your application or your
some like your candidacy so say, to be a console
member and every four weeks in the case of Polkadot, the system
would randomly assign the most voted candidates in comparison to others and
set the ideal console setup. So every four weeks, the console was being renewed,
or there was a possibility of being renewed.
In general, it was a very stable console.
There were two or three console members in the end
that were always switching.
But the first 10 or 11 console members, I would say,
were always the same.
And that was a blessing and a curse.
So in the sense of the early stages of Polkadot,
Governance One was very effective
to solve emergency issues and bugs,
which we had a lot.
We had a lot.
But eventually it became evident
that we didn't have so many issues
or so many emergency issues anymore.
Like we started seeing
that it would pass months, it would be months until a new issue would appear.
And so the community also started thinking, okay, well you know, the
representation of the council doesn't really work anymore. A big disadvantage
on governance one was that we could only vote, or the community could only vote on one proposal per period, and a period on Polkadot was 28 days.
So it's like only one decision, one executable decision per period.
Right.
It's a very, very slow process.
But at the same time, if you analyze the governance model, it was a very conservative one.
And that's exactly what we needed
we needed to be really really careful with the amount of decision making and the amount of
changes we could execute on chain automatically and so there was a lot of supervision a lot of
control and it worked really well for the first year and a half two years until we decided to
present a new proposal for open gov and Web3 Foundation researchers work on the curves.
And then the community vote on the change of the model, and then eventually the model came to life.
And that's what we call OpenGov now, right?
Even so, OpenGov at the time was very exciting.
And there was an opportunity for the common man, the common token holder to vote, as you said, on refs,
but only one per period, one every 28 days, right?
Yeah, I mean, there were some exceptions. So there was this method in which the technical committee was able to fast track proposals.
And in that case, then you would have more than one voted by democracy module, which is a token holders. But the technical committee, different to the fellowship today,
had a much more strict mandate, so to say.
Also back in the day, 2019, 2020,
the regulatory environment regarding the centralized autonomous organizations
and the potential liability on technical committee members
and council members was up in the air.
We didn't know where we were.
We didn't know where we stand.
Not that we know today where we stand,
but we have a bit more clarity with regards to what's the opinion, so to say.
And so technical committee was very, very careful about what to fast track,
how to fast track it, for how long, you know.
And different to the fellowship, the technical committee was actually able to say,
okay, this proposal will be voted on democracy module, which is the token holders,
for 30 minutes or for one day.
Or they were able to decide the amount of, like, the number of blocks
by which the proposal was going to be voted.
And that was
good for speedness yeah but it was uh it could go really fast and it could go wrong very very fast
as well wasn't there also a method i remember there was one time i i put up a spend proposal
to fill the wag media bounty yeah but it was controversial. And the council didn't want to touch it. But you guys,
there was some process where you were able to put it directly in front of the token holders.
Yeah, so I think we waited until the end of the period, but I don't remember.
There was a problem, yes, so because you can
only vote one public proposal at a time, we had to wait 28 days.
But, the council could sort of fast-track
without making any decisions
and put the proposal in a form of motion to the referenda
without actually endorsing it
but giving the community members a possibility to still vote on it.
So it's kind of sort of like a hacking system
providing a possibility to vote at least two referendums at the time.
Because, yes, the government's 1.0 provided the benefit that was extremely fast in emergency cases.
Because technical committee could actually say specific block numbers and enactment numbers.
But for the community perspective, it was super slow.
was super slow because you had to propose something on chain and then you
Because you had to propose something on chain and then you had to endorse it.
had to endorse it and the most endorsed proposal at the end of the 28 day period
goes to another 28 days voting period and if it's a Treasury proposal in case
it gets approved then you have a spent period which is additional 26 days so
we are talking about like three months of waiting period.
At the end of the day at the end of the Gov 1.0, we ended up with a massive bottleneck
because we had only a limited number of the console members
who were not able simply to reveal 10 and 20 proposals a week
because there's like human limitations.
And they were all building the core protocol mostly.
Yeah, exactly.
They were all developers, you know, like power developers,
Web3 Foundation people, power chain people,
and yeah, they were busy people, parachain people.
And, yeah, they were busy with, like, their daily jobs.
Yeah.
And then we could come and say, hey, I need you to review this.
And they were like, no, I cannot.
They have no time.
So there was a bottleneck there.
So this bottleneck was a bottleneck to progress, actually.
Yeah.
This treasury, which kept growing and growing, is full of potential energy.
Yeah.
We have to spend it so we don't fall behind our competition with our centralized councils, you know, spending, spending, spending and we can't even get some simple spends through.
We needed a change. But the categories also changed. I remember when we
started working on governance one on-chain, like when the model was on-chain
already and we started ideating the treasury proposal processes, like when the model was on-chain already, and we started ideating the treasury
proposal processes, like how is it going to look like? Okay, there's going to be a discussion
period, there's going to be a voting period, and then you have to go and build the stuff
that you promised, and then you need to report back. In some way, that process continues,
right? But in some ways, right? Some people don't really build. But what happened was that
we had very specific categories on what we wanted to fund. And the reason was is because
Polkadot just started and we had no basic public infrastructure. So we needed the explorers, we needed the indexers,
we needed the wallets, we needed all of those things
that everyone, like a lot of other ecosystems already had,
and we had to build from scratch.
So then the first category for our treasury
was actually public infrastructure.
So projects that are essential for the network to operate,
that don't have a business model that helps the team monetize this,
or there is a very difficult business model to monetize,
and that is a general use for all token holders.
That was the first category.
And see, the reason why that proposal I brought up was controversial is because I was arguing that
the distribution of non-bias information is going to be important here, but many people didn't see it that way. True.
And while that proposal did end up passing, it actually started attempts at governance that show because I realized that
now we have government, well first we have we had governance, it's getting
there's this bottleneck, we're gonna have to open it up to the wider token holders
and this is going to open politics. This is going to open this adversarial environment Bill was
talking about and boy oh boy is it adversarial. But it's also productive, it's amazing that we've
been able to build all this stuff without central direction and control. But it's also beautiful to see how the public
the polka dot public opinion changes. It does, yeah. Because back then no one would say that
public neutral available information for everyone is a basic public good. That's right.
But we see it in our democracies and in our societies every day how important it is to
have neutral public accessible information for everyone. and when we talk about this in the network we talk
about the work that AAG does or the work the work that Tommy does with
his work but also we talk about like documentation and we talk about the
wiki and we talk about the things that are available there for people to
understand how bulk dot works and back then we had nothing so that was a very important
effort to yeah. So at the end of the talk we're gonna get into some do's and
don'ts of governance from our point of view yes but first we have to talk and
let's not get too deep into the weeds of the actual technical structure how it
works let's just talk about the transition to OpenGov and what that
transition looked like and what it opened up. Yeah, so yeah we moved from the tricameral system to the system where all the
responsibility goes to the token holders where everyone has a say so we ended up
having a government 2.0 which can be described as a universal on chain token holder governance.
By on chain means that as we said all the decisions are made on chain as long as the
code permits you can submit the proposal on chain and get it executed on chain.
Universal in the same aspect that from the run time upgrades which is like the core protocol
change all the way to the small tips you can submit everything.
For the token holder it means that anyone can submit
anything, obviously there's some challenges
for the decision deposits to avoid some spam
and bloating of the network, but as long as you own
the tokens, you are able to participate
and submit the proposals on chain and make your voice heard.
And even if you don't have the tokens,
there's a mechanism to engage in the discussions
through AAG and other platforms.
So the biggest change is moving from that privileged group of the individuals who are like consuls and the technical committee
to everyone being able to propose anything and not one referenda at a time, but hundreds of referendas, right?
As Bill said, we've seen like 80-something referendasendas in one go which is quite insane.
And there's a logic behind it, right, so like we can assess smaller tipper proposals which
are like easier to assess in a faster pace so it's easier to do it.
But some of the proposals need a longer consideration, longer discussion and that's why how the
limits per track, per origin is assigned as well
as the decision periods and how the curves are designed. So this is like the
biggest changes. So now anyone with the dot token can propose how to spend the
Treasury, anybody with dot token can propose how to upgrade the network and
anyone with dot can vote on either proposals and see it happen. And what's
happened since? Oh wait let me bring up one thing that's happened since.
When we launched it on Kusama,
that treasury was getting spent hard.
Yes.
And those KSM's just kept going down and down and down.
We needed some discipline.
Well, somebody came through,
an anonymous account that we named Hacken,
at the beginning of their address was H-A-C-N.
Yeah.
And they had a huge bag,
and they just started neighing everything,
even if it was good. Hacken came and hacked everything to bits. Yeah, it kind of balanced it out. Yeah, that curbed spending for a second. Yeah. Yeah. So
we're in a decentralized community and
one of the disadvantages of a decentralized community is that it takes longer to
make decisions and it takes longer to make decisions and it takes
longer to make decisions when it comes to budgeting which is a very
controversial topic right. What should we spend our money on? How much percentage
of the Treasury should we give to marketing? How much should we give to
public infrastructure? How much we should give to education? Projects like PBA? How
much we should give to wallets, how much we should give to
liquidity, or should we give any part of the treasury for liquidity? Is that something we
should do? Hot topic lately, how much should we give to privacy? How much should we give to privacy?
And who proposes? Exactly. And so I think the appearance of H hacking was one of the first appearances, I would say, of a whale in the Kusama and the Polkadot ecosystem.
And it was very productive if we look at it with perspective because it allowed the community, first, to understand that we need a structured way on how we spend the treasury.
how we spend the treasury.
And second, that there is this problem that we have,
which is not exclusive to blockchain networks,
but it is very present in our communities,
which is the problem of asymmetric information.
So in this case, we know now that not everyone knows about everything
and not everyone can decide about everything
because not everyone knows about everything. So everyone can decide about everything because not everyone knows about everything.
So how do we solve that problem? How do we solve the problem in a model like OpenGov?
We just came from representative government, Gov1. Are we going to go back to representation? We're now in OpenGolf, we clearly saw that, and I'm sorry to
say it because I'm in Switzerland, but not all the time direct democracy works.
Okay, so there is a trade-off and representation and representative bodies
are important and we came up with different mechanisms on how to spend the
Treasury. Some mechanisms have less control by the community, for example, direct spending proposals, which we see a lot.
Other mechanisms, there's a bit more control, for example, bounties, which is my personal favorite.
And these mechanisms, these different type of mechanisms, allows us to use the treasury and spend the treasury,
depending on the topic and
how controversial or important so to say the topic is. So we've seen for example on events
which is like a very common controversial topic right. Events the treasury funds has funded and
funds still a lot of events happening worldwide and a lot of sponsorships and conferences happening worldwide for Polkadot presence.
We quickly realized that it was impossible for the community to assess
what was the return of investment of a particular sponsorship
in a particular region of the world.
And for that, we needed experts.
We needed people who knew how to organize events.
We needed people who knew what is necessary for an event to be successful and what type of
presence do we want. And so I always name him because he was the ideator of the
bounties mechanism. Emil from, he's now working on Jam, I think, on a Jam
implementation. He came up with the idea of the bounties mechanism.
And the bounties mechanism was a way to budget the treasury
basically by creating sub-DAOs, so to say,
and the community will set aside or earmark a portion of the treasury
and leave it only for the curators
of this bounty, of a specific bounty, to spend it as they see fit. And the curators and the
experts of this bounty would be chosen and elected by the community in OpenGov. I think
it's a very interesting proposal. I think in general we have bounties
Mechanism working on chain for a few years already. I think most of the time is wrongly used
Well, let's get to that in a second. Yeah, but to your point there
When I hear bounty or how I describe bounties as they're used today to people it's a sub account
Yes, it's a it's a little piece of the treasury that a few people,
basically a council, have control over with a specific mandate.
An executive body.
And the core token holders can revoke those funds at any moment.
They can kick off the curators.
And we've seen that happen multiple times.
Probably the most productive bounties so far are events, meetups, pretty good.
Marketing's getting good. Marketing's getting good. I think... Marketing's getting good.
Marketing's getting good.
I think UX Bounty is in a very good road,
but only because of RFPs.
Right, right, okay.
But I think they're in a really good...
They have a bright future, I would say.
Okay, let's talk about RFPs through the lens
of the problem we had.
So far, we spend a lot of time listening
to how other people would like to spend our treasury.
In fact, that's the whole AAG show.
We have people come on, it's kinda like Shark Tank,
and they tell us why we should allow them
to spend our money.
Recently, we've been trying to change culture
and flip the script into requests for proposals.
So it's us asking the world for things that we actually want.
And what does this look like?
So I think RFPs are an essential part of the bounty mechanism.
Should have started there.
We should have started there.
I was very repetitive from the very beginning.
I do remember you saying this a lot. It's fine. People get excited and I've been saying this for
a while. I think RFPs are an integral part of bounties. It's very important for experts, which
are the curators, to decide what is actually needed because they know the topic. They know
the scope of work of the bounty. So they should be the ones deciding because the community has chosen them to decide this particular topic.
And so basically the way it works is the experts get together, basically the curator of a bounty
is an address on Polkadot but it can be a multisig composed by three people, five people,
ten people, fifteen, should be a multisig ideally.
It cannot be one person, right?
But there can be as many curators
as as someone wishes it is important to have it to keep the amount coherent in order to have
a fast decision making so to say and and basically these curators or experts they open requests for
proposals they they assess what the network is needed in their scope of work and then they publicize,
okay guys, we need this.
This is the amount of money we're willing to pay.
We're receiving applications to develop this to this address or to this email address or
to this form.
Please submit your applications and then we'll decide which one is the best proposal like any government would do it, right?
The advantage of this first is that curators know
the scope of work and they will decide not on the cheapest proposal
but on the proposal that in comparison to how expensive it if it is to what's the deliverable, what would be the most impactful proposal?
And this is very, very important. The word impactful is key on RFPs.
And the second one is that you get rid of anyone after deliverables coming and saying,
oh, but, you know, my cousin could have done it better for less, right? So this process allows
curators to assess what are the possible
solutions out there on this topic?
What do they choose and make an objective decision into why they're choosing this particular team to work on that?
The more objective the criteria for evaluation is for an RFP, the better.
When we go to the subjective waters, that's when we have problems and we've
seen it before. The other great thing is that curators can pay the team that they
select to execute on the RFP as the work is done. Correct. Too often, we have paid out teams up front for future deliveries, future promises,
and of course we haven't seen anything come of it.
We've actually started a new segment called House of Shame.
Yeah.
Where we try to learn...
I don't know if I agree, but...
You don't know if you agree with that segment?
I don't like the public shaming...
Shame is a powerful human emotion.
Sure.
Yeah.
Sure. Okay. People know who cheated. What's that? human emotion. Sure. Yeah. Sure.
Okay.
People know who cheated.
What's that?
We don't need to shame them publicly.
They know.
Okay.
Well, we'll have to have you on the show, and you can debate it on the show.
Otar, any other problems that we've seen in OpenGov?
Difficulties.
Yes.
Okay.
I think this is not specific to OpenG gov but like a blockchain governance in general
but water turnout is like usually the biggest problem right yes yes um and yes we try to
implement some of the measures but i'm not sure how sufficient it is obviously one of them
is to provide the information so like we avoid information asymmetry and the
delegation right this sort of like liquid democracy where if you don't have a
possibility or expertise to vote for a specific tracks or specific direction
to the Treasury runtime upgrades or some technical you can always delegate your
tokens to a specific individual so-called expert who can vote on your behalf
without the tokens leaving actually your address, right?
But there's still way more work to do.
There's still way more processes to be done to make sure that it's way more accessible
for the small token holders so the big whales don't sway the votes in the direction they want to.
One of the most powerful motivators of participation is controversy. And we saw this when we kind of had a reverse hack and come on Polkadot.
This was last summer. A fellow who initially was anonymous but came to be
known as Giotto. And Giotto was the first executive whale on Polkadot, and he had a thesis that the problem with Polkadot is that it's not well known enough.
And he wanted to spend aggressively on anything that would increase awareness.
And I also think part of the theory was just spend now, make mistakes.
Even wrong spends will attract attention, and this will improve the situation.
Not only did he have a theory but he had the voting power to do it.
I think he's one of the largest token holders of DOT and maybe OpenGov.Watch can help us
here but in a few months we spent 40 million?
Tommy will know.
In that big summer spike, yeah, 40 million, yeah?
The first half of the year it was...
Yeah, but that was...
Something like that.
40 million.
Yeah, yeah, yeah.
Only for marketing.
Yeah, all on marketing, yeah, yeah.
But we had a lot of ground to catch up.
Which I mean, to be fair, 40 million in market...
I mean, the problem is that we don't know what other networks pay for marketing because of the obscurity of off-chain governance.
Yeah, I've heard 40 million isn't actually that much, but it attracted a lot of attention.
And voting participation went through the roof.
Yes.
And it kind of looked like Giotto was never going to stop.
And I just want to be clear, I think it's debatable whether or not what he was doing was right or wrong.
And there's a lot of people on both sides.
But eventually, the Web3 Foundation thought it was a bit much.
And they introduced decentralized voices.
Yeah.
I mean, to be fair, I think Giotto was circumstantial to decentralized voices.
Yeah, I agree with that.
I know as a fact that the possibility to delegate
Web3 Foundation funds
was always on discussion.
It was on discussion before Giotto.
I think
Giotto kind of
crystallized the idea of
DV program.
I think Giotto had great goals.
I think they're very, very positive.
They could have been very positive goals for Polkadot.
Bad execution, I would say.
I think he had great ideas, or he has great ideas.
It's just he's been inactive in governance.
And I think the centralized voices program is a really, really good program.
And I am in favor of rotation of the members.
Can you explain what it is real quick?
Yeah, so rotation is basically...
Just the actual program.
Oh, yeah, sure.
I mean, Bill already explained it before.
Oh, thank you.
Sorry.
But I mean, the Centralized Voices program is a program in which Web3 Foundation delegates voting power,
so tokens to, we have this thing on Polkadot that is delegation, which other networks also have.
And I can basically delegate my tokens to Jay if I cannot vote or I don't have the time to do it.
He can vote with my power without me having to transfer my tokens to his account, right?
So it's like a delegation kind of mechanism.
And the Web3 Foundation delegated its dot tokens to different collectives now.
Before, I think there were some individuals, but there were some individuals in the first cohort, but not anymore.
But there were some individuals in the first cohort, but not anymore.
And so basically Web3 Foundation delegates these tokens.
Same amounts for everyone.
The same amount for everyone.
I think there are five or six organizations today.
Six collectives today.
And they are free to bode on almost all tracks and not on route as they see fit.
There are certain conditions and certain requirements.
One of them is or used to be to have a voting history or a governance participation history
which I disagree with.
I don't think it's necessary or essential.
I think it actually limits the amount of new people
entering into governance out of interest and trying it out.
I'm sorry, I'm just talking to you right now.
I'm very sorry.
But I do think that the good thing,
the positive thing about the DV program is that,
and in relation to a question that was asked to Bill,
if actually participation increased or not with DV,
some would say yes, some would say no.
I do think that it really, really incentivizes the creation of collectives,
the creation of the initiative of delegating these tokens to new collectives or to existing collectives, the creation of the initiative of delegating these tokens to new collectives
or to existing collectives.
We see KaosDAO, for example.
It's a really big collective that has as many tokens delegated as the amount of tokens Web3
Foundation delegates to one delegate, which is amazing.
delegate which is amazing and they have a very strict and kind of like
structured voting system internal system in order to make decisions and I think
that's great and actually the incentivization of new collectives
representing community members yeah it's the hybrid that I think Polkadot
needs in order to increase participation so DB program has done that this is an
incentive that came exclusively from the DB program.
And that's also the reason why I'm against,
I'm in favor of rotating the members
because then you allow new collectives to form.
And if it doesn't work,
if like the Web3 Foundation delegates today to one collective
and it doesn't really work,
in one month they can always undelegate.
They don't need to wait the entire period. They can always
undelegate. They're private funds after all and they can do whatever they want
with them and they can undelegate at any time, right? Yes, the DAOs, the
sub-consensus that's arising is super, super powerful and a lot of these DVs
have totally different strategies. Yes. You mentioned Chaos DAO. Yeah. This is a
private club. Yeah. You have to DAO. This is a private club.
You have to be invited to come in.
You have to follow certain rules,
and only then do you get voting power on a one-person, one-vote.
And this is different than CoosDAO,
which is much more open
and all discussions are transparent.
Some DAOs have members
with stronger voting power than others.
So we see all these different governance structures
forming underneath the main OpenGov,
skin in the game governance.
Yeah, I think it's also beautiful for me
to see the structures that form
with regards to processes, right?
For example, a really, really good example
of perfect, transparent and efficient communication on how they vote is Saxenburg.
Saxenburg is very diligent when it comes to explaining why they vote in favor or against proposal.
They use the right channels.
They know where to go for their message to be out there.
And you can always contact them to discuss why the proposal, why their vote was against or in favor, and what they need in order to change their vote.
Another good example, too, because Saxenburg is two people.
Yeah.
High, high concentration of voting power among just two individuals.
But they are right there with Chaos Dow and KUS Dow and all these other subconsensives.
It's really neat.
Yeah.
What do you think about the future of Hub, so we're moving
governance over to Hub, AcidHub, where we're also moving smart contracts that
are going to be able to interact with the governance aspects of the Polkadot
network. What do you see happening? I'm gonna make it short and then
Soter has a lot of opinion on this. I think it will be a hard and long migration, but I do think the roadmap looks right.
And I think utilizing smart contracts for governance will bring a lot of flexibility.
A lot of flexibility.
Yeah, especially with the vibe coding that's going on.
Yeah.
People have no idea what they're doing.
I mean, look at Tommy. Look at Tommy go. Are you vibe coding right now? All. Yeah, people have no idea what they're doing just like I mean look at Tommy
Look at Tommy go. Are you vibe coding right now? All right good. Oh, what do you see?
Yeah, I'm super excited about it right
The migration with Plaza integration smart contracts
We should be able to unlock so many opportunities because right now having a
collective or sub down on chain means that you have to work with the pallet
and then work with the runtime upgrades, which is a massive undertaking
and not something that everyone can do.
On the contrary, with the smart contract, you can write it pretty straightforward, test it and deploy it.
And then that will facilitate creation of so many sub-organizations,
And that will facilitate creation of so many sub organizations, so many sub DAOs with their own independent logic and the rules and tokens and how to operate everything under the big Polkadot umbrella.
And that will bring a lot of innovation in the ecosystem.
So, yeah, I'm super excited about it.
I don't know what kind of DAOs will emerge, but, yeah, I think we will be surprised what's possible.
Other sub DAOs that are really gonna be unlocked in the future or other styles of sub governance that's gonna be unlocked in the future is
gonna be enabled by proof of personhood. Right now we have to do this skin in the game kind of
style of governance because we have nothing better. Really
having people with the most to lose,
with the most power,
it's kind of the best thing we have at the moment.
But of course there's a lot of other systems.
One person, one vote, quadratic voting.
All of this can only be unlocked when we know that people are individuals.
Yeah.
I mean, there is an argument
for those in favor of coin
boiding systems which is the generally accepted model on blockchain networks
that say that the more tokens I have the more skin in the game I have therefore I
only want the long-term good for the network, right? Or even yourself. Or even
myself aligned but in general I tend to if I have a lot of tokens in a network,
I tend to align with what I think will be best for the network. But what I think will be best
for the network is not necessarily what others think will be best for the network. And that's
the conflict that we have. I think it's not only Polkadot exclusive, but it's also everywhere else with whales, right? And so Bill mentioned some instruments
that try and mitigate this particular problem
of whales versus minority token holders.
And I think conviction voting is a nice experiment.
To repeat, conviction voting allows you,
when you vote, you lock your tokens for a period of time,
which is the period that the proposal is up for vote. If instead of one vote for
one token you want your one token to be valued at six votes right you can lock
your token for longer right and but that means that you have to stay in the
network because your token is locked.
You cannot just go off ramp and sell and say, I'm done with this network, right?
You need to stay.
So if the decision goes in your favor, your token will be locked for longer.
But the truth is that also whales can do that, right?
So if I, that I have one dot, can use the conviction voting, whales can also do that.
I have one dot can use the conviction voting.
Whales can also do that.
So it's not an instrument that allows us to mitigate the whales problem,
if you want to call it a problem, so much.
Delegation is another instrument.
It's really good.
I'm very excited about proof of personhood
because I think it might allow us to experiment a lot with one person, one vote,
or one identity identity even though we
will not know who it is we will know it is one. One person one boat that is
very exciting. I think there are other mitigation mechanisms in other
ecosystems that we can in a limited way kind of like try to experiment with but
it's not so straightforward as for EBM compatible networks
for example quadratic boating is a very interesting boating mitigation mechanism.
Totally.
So yeah I mean there's a lot of possibilities out there and as Autor said with EBM compatible
network with Asset Hub with smart contracts deployment and so on that allows us to do a lot
of other things. And of course, a lot of people get hung up on idealism or a specific ideology,
but really ideas are not useful outside of the present context of the task at hand.
It made sense, governance one made sense at the time.
We had a brand new network, it made sense to have a small council with concentrated power.
a brand new network, it made sense to have a small council with concentrated power.
We're still a pretty early network but it makes sense to have whales maybe with a lot
of the power.
But maybe in the future we can open it up to one person, one vote.
But will we open it up to my neighbor who doesn't know anything about Polkadot, just
gardens all day?
You know, that's...
That's the asymmetric information problem.
That's it, yeah, that's it.
I think the beauty of Polkadot relies on the fact that it's upgradable.
I don't think we can expect the user to adapt to the technology, we need to adapt the technology to the user.
And I think Polkadot allows you to do that, and that's beautiful.
Alright, we have a couple minutes, let's go down the line. Just from our experience, either as proposers or voters or observers of OpenGov some do's and don'ts for anybody
who wants to participate in any in any way we'll go we'll go down the line a
few times okay but let's let's start with some do's yeah Ohtar. Do vote and if
you don't vote do delegate 100%. I do. Do use the mainstream channels to
distribute information about your proposal.
Go to the forum, go to Polk Assembly, go to Subsquare, go to AIG.
Go to the Polkadot Direction channels. Make sure that the people see what you want to do
in order to be able to discuss it with the wider community and get some votes in.
Good. I would say do be supportive of votes that have succeeded.
If money is leaving the treasury, well, it's already gone.
So do your best to help things be successful.
Yeah.
Otar, don't.
Or do.
Don't.
Don't.
Don't.
Don't submit the proposal directly on-chain without off-chain coordination,
which is a discussion round, to measure the temperature before you formalize your submission.
Yeah, nice.
Yeah, I would say don't take it personal.
That's a very very important thing and never take it personal, never take any attack on the network, particularly from anonymous people.
network, particularly from anonymous people, personal, in general, take into
account the constructive criticism even if it's with a rejection
vote. You can always improve, you can always come back. We've seen so many
situations where somebody takes a no badly and they're cooked, but other
situations where people take it well, improve the proposal, come back, and we have major successes in this way.
Yeah.
Okay, I would say don't submit a proposal for your stupid idea before you build a reputation in the ecosystem.
A lot of people come out of nowhere with this entitlement to spend the treasury, but nobody knows who you are.
And reputation goes a long way on the social layer.
Yeah.
Okay, one more do, and then we gotta finish.
Otar?
Don't be an asshole.
Don't be an asshole, yeah, nice.
Engage in the constructive discussion and feedback
because open up many people, different opinions.
I mean, some negative, some positive.
Be constructive, I mean, that's very important.
Be constructive and be patient.
Nice.
Either one.
Do retroactive work.
If you have the opportunity, do work for free.
Something that you know the community will need.
Present it to the community.
Make it use them.
And you will build a lot of social capital in the community. An example here is Tomek and his team with the tools for Jam.
Nice.
I would say do engage in the proper forums.
Keep the FUD off the timeline.
The funny thing about this transparent decision-making is it's messy,
and if we cry about it on Twitter and show the world
that we're all just full of drama and whatnot.
They can get the wrong idea of what we're trying to do here.
Of course, we've done so many productive things,
and keeping discussions in the proper channel
keeps those discussions focused on finding solutions
and reduces noise in public.
Wow. That was a great hour.
Thank you very, very much, guys, for coming on.
Let's give them a big round of applause.
Thank you. Thank you. And very much guys for coming on. Let's give him a big round of applause. Thank you.
And thanks to you.
My pleasure.
And to Nikos.
Thank you to Nikos for organizing it.
And for Nikos.
Yeah.
Bye everybody.
