Today most of the governance mechanisms in cryptocurrencies such as in Bitcoin, Ethereum, etc… are informal (off-chain). These governance models are designed or improved based on Satoshi Nakomoto’s original whitepaper. Improvement proposals to the blockchain are initially submitted by developers and then the core group involved with the blockchain, mostly consisting of developers, are responsible for coordinating and achieving consensus between stakeholders. 

In any blockchain protocol, the stakeholders are mainly:

  • miners (operate nodes)
  • developers (build the blockchain)
  • users (use/invest the cryptocurrency of the blockchain)

In this article we will discuss ‘On-Chain Governance’ and especially the on-chain governance model by Uniris, where any modifications on the blockchain will be quick, formal, and work solely online.

In layman terms, on-chain governance vs off-chain governance is more like ‘Soft Brexit vs Hard Brexit’.

What is the problem with Off-Chain Governance?

Let us take the example of Ethereum, which adopted an off-chain governance model. Usually when improvement proposals to Ethereum are submitted by the developers, the core Ethereum dev team is responsible for the approval or disapproval of the improvement proposal. All the approval process is offline and once approved, the code will be online.

Currently Ethereum is switching from its original 1.0 version to Ethereum 2.0. The transition is quite risky, complex, and protracted. The main motive for this transition is to achieve scalability and hence have higher TPS than Visa, Mastercard etc… (>45000 TPS). Ethereum expects to continue its growth, hence all its node operators are indirectly ordered to work on computers with more processing power and storage, which will easily lead to some form of centralization. Ultimately, support for such a network will decrease! (Especially in the decentralized world.)

For this transition to be successful all the existing smart contracts need to be moved to another network. The new Ethereum 2.0 network would slowly add all the smart contracts (all these smart contracts must be created again), hence, we call it the most painful long term process in the history of blockchain.

Solution: Uniris’ Onchain Governance Model

On-chain governance models are simply where any change with respect to code is proposed online, validated online, accepted online and implemented online. All changes to the blockchain are proposed through code updates and the respective nodes involved with that part of the code/logic can vote to accept or decline the change.  

Once the code is accepted, it will automatically be included in the blockchain!

Note: Depending on the blockchain protocol and on-chain governance model used, not all nodes have the same voting power. For instance, preference can be given to:

  • Nodes with a history of code proposals & acceptances
  • Nodes with more coins

Eg: Tezos uses a similar form of on-chain governance called self-amending ledger. All the proposed changes are first implemented on a test version of the blockchain. If the results are successful the code will be put online on the real blockchain.

Uniris’ Edge

The code used by the nodes is hosted by the Blockchain itself, so the network is certain that all the nodes will immediately apply the decided updates (via Elixir hot-reload modules and from the information stored in the “smart-contract content” area). The Uniris Blockchain is also equipped with the ability to test the impact of a new feature in real time.

Governance of the Uniris network is based on 8 distinct groups:

  • Users: Anyone with the ability to prove their uniqueness (via biometric devices or other processes).
  • Miners: Owners of the mining nodes which constitute the network itself.
  • Application & Services: Application providers with a weightage based on usage generated.
  • Foundation: Their role is to lead the community and organize governance.
  • Technical Council: Composed of the “core developers” with a weightage based on importance of their code contribution.
  • Uniris: As the creator of the network.
  • Ethics Council: Whose members will be proposed/elected by the community and who will have a veto right over all technical features that would impact the privacy of users.
  • Blockchain: The Blockchain itself, in particular, through its ability to test a full-scale functionality before deploying it on the network. For example, the maximum size of transactions is not linked to a point of view, rather it can be directly tested to determine the actual impact on the network with respect to the need considered.

Planned Governance by the Community

Uniris, a Humanitarian and Community Project

Once the risk of fork is removed, all the patents will be transferred to the heritage of the open source technologies, most likely this heritage would be assigned to the OIN (Open Invention Network). The entire source code will be AGPL licensed.

– Written By Nilesh Patankar, COO and Co-founder, Uniris, and Akshay Kumar Kandhi, Chief Product Officer, Uniris

For any questions or more information on Uniris do check out: https://uniris.io or follow them on social media:

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