This is the third of a four-part mini-series to explain what you can do with your XNS on Insolar MainNet.

What is XNS

XNS is the primary coin powering enterprise blockchain adoption. Governance is another realm where XNS is applied. In this sense, coin holders can have a democratic say in how the network is run and vote for changes.

XNS is Insolar MainNet native coin. It is used as a medium of exchange for transferring value to settle application fees, resource fees, and subsidies within the network.

What is governance in Insolar MainNet

In a traditional sense, governance is when an organization uses and regulates influence to direct and control the actions and affairs of management and others. However, in a decentralized DLT network such as that of Insolar MainNet, stakeholders participate in collective decision making to improve the management of the network and delivery of the services the network offers.

The mechanisms to bring about autonomous governance of the network as a self-sustaining ecosystem are fuelled by Insolar native coin (XNS). As such, all network-wide decisions in Insolar MainNet will be made by the community through a collaborative decision-making process, all facilitated by XNS.

Those with more coins have more say on how decisions will be taken in this consensus-based system. However, increasing decentralization through greater distribution of coins across a greater amount of stakeholders can contribute to the overall robustness of the system, removing single points of failure and introducing additional flexibility.

Example: governance in action

Transactions need to be executed and subsequently validated. The platform decides which node will execute the transaction through entropy. Let’s say there is a governance model in place which states that only the nodes with the appropriate staking level of XNS can execute transactions of a certain (high) value.

From this list of allowed nodes (instead of the full set), one is selected to execute the transaction and several are selected to validate the transaction in accordance with the set governance requirements. Should they wish, stakeholders are able to propose that the staking requirements be changed. In this situation, a network-wide vote can be held for the staking requirements to be altered.

Up next

The next explainer in our XNS mini-series will explain the difference between coins and tokens.

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