æternity’s First On-Chain Governance Vote: Decentralization 2.0

The æternity protocol is ready for its first community governance milestone. As planned, the æternity team is handing over governance power to the community.

TL;DR

This will be the first-ever on-chain governance vote in æternity’s history — and we need you to make the decision.

To transform æternity into a self-sustaining platform, we propose the Block Reward Initiative (BRI), through which ~0–20% of miner rewards will be allocated to development. This is what you need to decide on.

Voting æpp will be released on May 7: Voting period: May 7 -15, 01:00 АМ(CEST) . Non-migrated AE tokens on the Ethereum blockchain, AE tokens in migration, and Mainnet AE tokens are all eligible for participation.

. Non-migrated AE tokens on the Ethereum blockchain, AE tokens in migration, and Mainnet AE tokens are all eligible for participation. The æternity community is welcome to participate in the dedicated discussion in the Forum.

The Launch of æternity’s On-Chain Governance

We have reached a historic point:

The time has come for community members to fulfill their role in shaping the platform’s future.

To ensure the continued development of the æternity protocol and the regular addition of new features, sustainable funding mechanisms to bootstrap ecosystem development must be identified and assessed. The process of analyzing the options and judging their viability, fortunately, also presents a unique opportunity to launch æternity’s first version of the on-chain governance mechanism and test it for the very first time.

Although the mining gets done in a completely decentralized way, currently, the platform’s software upgrades (hard forks) and system variables are mainly decided by æternity’s core team. First votes have been done by the voting app which works with AE tokens on Ethereum. This vote app has been live for over a year now and was used for opinion signaling, all votes having been non-binding so far. The long-term end goal has always been for governance to be based on a verifiable on-chain voting process, open to the entire community of AE token users.

æternity’s new voting æpp will be launched on May 7 to enable community members to participate in the governance vote and take an active part in shaping the ecosystem.

Block Reward Initiative (BRI)

We are proud to say that the æternity project, its development, and the expansion of the ecosystem are in full-swing. Funds received from the token sales from April till June 2017 have gone through a thorough financial planning process. æternity is sufficiently funded for current development activities and will remain so for the years to come.

However, to ensure further and continuous growth and to make sure æternity transforms into a self-sustaining economy, æternity proposes that a part of the mining reward will be allocated to support future development activities.

The AE tokens from the BRI will provide an additional source of support for continued open-source development of the æternity platform.

We recognize that in order to establish a thriving blockchain ecosystem, two goals must be achieved in parallel:

developers must maintain and improve the blockchain protocol — and to do so continuously, adapting to demand and industry requirements; miners must continuously secure the platform through the process of mining.

For their work, miners receive block rewards — newly minted tokens, and transaction fees. Currently, community developers are not formally incentivized in the same way.

Developers must also be granted access to a steady source of funds.

To balance the reward share of miners and protocol developers, we propose the Block Reward Share:

Giving between 0% and 20% of mining revenue to developers.

The Block Reward Share will come from existing block rewards and will not affect the total token supply.

Bootstrapping æternity’s Open-Source Development and Evolving æternally

The æternity protocol and supporting tools are starting to blossom into far more than just another blockchain project. Seeds are taking root all over the globe:

æternity’s reach now stretches from Europe and Africa to North and South America, with expansion to Asia underway.

Identifying approaches to turn æternity into a self-sustaining platform is vital to the long-term vision of the project. In the past, open-source communities have relied on foundations, grants, and the formation of consultant agencies to fund the realization of their ideas. However, usually, the development stops as soon as contributor interest wanes.

We are confident that the block reward share is the perfect sustainability mechanism for the project.

The serious work the development teams put into æternity has been apparent not only to those involved but to external researchers as well. Electric Capital released a report noting the number of developers working on the æternity platform every month (over 100), and the fact that æternity’s GitHub repository has over 13,000 code commits as of February 2019, which makes it one of the most actively developed blockchain platforms. Moreover, æternity has consistently been in the top 5 projects by dev activity in all reports by Santiment.

So far, æternity has reached several major milestones and deployed significant protocol improvements, including:

Just as æternity has come a long way, we envision an even longer way ahead as æternity develops into an integral part of the infrastructure of the new, crypto-empowered Internet. Developers are pushing for features that will further solidify the platform’s position as a blockchain for global scale use.

æternity is a vision built by industry pioneers — seasoned programming legends with decades of experience in building scalable and efficient telecommunication systems in Erlang. These developers are fundamental catalysts to the evolution of the Internet as we know it.

As æternity moves forward development teams must get the support they need to keep the protocol up-to-date and at its optimum state.

The Block Reward Initiative: Use of the AE tokens

All AE tokens from the Block Reward Initiative will be dedicated exclusively to æternity’s technical development.

Initially, the AE tokens will be held under the governance of the æternity Crypto Foundation, a 100% charitable foundation established in Liechtenstein, which is supervised by the corresponding regulatory body.

A technical council will be consulted for the allocation of the AE tokens. The technical council assures the knowledge transfer between technical experts, æternity developers and the board of the Foundation. In the more distant future, with the goal of further decentralizing the decision-making processes, the possibility of a DAO-like structure for the BRI AE token allocation could be introduced and subject to another community governance vote. However, among other variables, such profound changes have to be thoroughly tested and rely on a maturing progress of the protocol and the development team.

Block Reward Initiative: Voting Mechanism

The community will vote on the percentage that they believe must be dedicated to the BRI Reward — any value between 0% and 20%. One AE token is equivalent to one vote.

Case 1: Rejection of BRI

Should more than 50% of all voting tokens be placed on a vote of 0%, the result of the governance decision on the Block Reward Initiative will be considered as a rejection of the BRI. No changes will be made to how the block reward is distributed now via mining.

In this case, no part of the mining reward will be dedicated to the future development of the æternity blockchain protocol.

Rejection example with 100 AE tokens in total:

60 AE tokens vote 0%

10 AE tokens vote 5%

20 AE tokens vote 10%

10 AE tokens vote 15%

With the above numbers, 60% rejected the BRI and only 40% accepted it which translates that the outcome of the vote on the BRI will be rejected and NOT implemented at all.

Case 2: Acceptance of the BRI

If more than the simple majority (more than 50%) of AE token holders who participated in the vote select 1% or more, the BRI vote will be accepted.

In this case, the average value of all positive votes will be applied as the percentage of miner rewards that the BRI will receive — activating with the next scheduled hard fork (Fortuna).

Acceptance example with 100 AE tokens in total:

30 AE tokens vote 0%

20 AE tokens vote 5%

30 AE tokens vote 10%

20 AE tokens vote 15%

Considering the above numbers, 30% of all voting AE tokens rejected the BRI vote while 70% accepted it. The outcome of the vote is positive and the percent of the block reward that will go to the foundation for development support will be 10%.

[(20 AE x 5%)+(30 AE x 10%)+(20 AE x 15%) / 70 AE= 10%]

Block Reward Initiative: Voting Timeline

The voting period for the BRI proposal will be from May 7 to May 15 (CEST), before the Fortuna hard fork.

Video tutorials thoroughly explaining how the voting works depending on where users store their AE tokens will be shared before May 7.

Non-migrated AE tokens on the Ethereum blockchain, AE tokens in migration, and Mainnet AE tokens are all eligible for participation.

An AMA session regarding the vote will be organized in Telegram (announcement through the forum soon).

Users who have their tokens on an exchange will need to withdraw them to a personal wallet/account in order to participate in the vote. Alternatively, they can let their trusted exchange vote.

The æternity team will keep everyone updated should there be any changes to the schedule.

Open Discussions

The primary goals of this announcement are to:

inform the community about the upcoming, first-ever governance vote, and start a conversation about the governance and long-term sustainability of the æternity project.

All insights and opinions are highly valued and the community should work on propelling and engineering the ecosystem’s future together through a healthy discourse. We created a dedicated thread for the BRI vote in the Forum.