When speaking of governance, within the blockchain space, there are three types of governance one can refer to: protocol governance, distribution governance, and social governance. I will touch on each briefly, but will focus on social governance.

Protocol governance refers, generally, to the system of consensus. In Bitcoin, this is a proof-of-work system centered around raw hash output. If disputed, the chain with the most accumulated hash power is the valid, dominate chain. Some blockchains use a ‘trusted node’ system, such as NEO, which are considered ‘pseudo public’ blockchains. It is public, in that all can download, use, and review it, but it is private in that only the 7 to 10 trusted nodes are able to contribute hash power and form consensus. Other systems use other protocols.

It is the desire of Alvalor to be a proof-of-work consensus forming blockchain, centered around raw hash output, in the long run. That said, our methods for doing this are in development, and we are open to many ideas. It is recognized that Bitcoin’s blockchain has become vulnerable to overly concentrated hash, which, according to the white paper, jeopardizes consensus, and this is a problem we would seek to avoid.

We wish the best to all blockchains, and hope teams overcome all obstacles.

Distribution governance refers to the amount of tokenized reward provided for exhibiting certain behaviors. In Bitcoin, this is referred to as the ‘block reward’, which is a combination of transaction fees and a schedule of payments to nodes (per white paper, now miners) over 30 plus years. Within Ethereum one has ERC20 tokens, and ENS registries, which are priced in Ether. On SteemIt, one earns rewards for article submissions, and so on.

Collectively, the Alvalor team is very interested in optimizing reward to maximize impression and utility. During our early phases, we are likely to keep the reward distribution as simple as possible and relatively minimal. Rather than rely upon on-chain systems (which are in development), we will utilize the standard utility token distribution approach. As we have not allowed any moneyed interests, or ICO investors, we also have not made firm commitments, potentially hampering our future scope. Thus, to keep it simple, we reserve the right to reward tokens in a manner we deem best to promote, grow and develop the Alvalor blockchain.

Initially, this will be handled using available social systems, but we hope to mimic these properties on the blockchain, so that it becomes perpetually self-sustaining one day and doesn’t rely upon outside communication anymore. We hope to be a blockchain for all of humanity.

Lastly, that brings us to social governance. By social governance, we mean the systems used in which people, real life people, get together and produce order.

In that regard, we operate as an open-source project. Open Source means that we expose our code openly, allowing anyone to inspect and verify our work. It also implies that we hope to build and sustain a community of people with applicable skills who take the initiative to make voluntary contributions. We hope that one makes a contribution without need of reward, but we do intend to incentivize people who add significant value to the project. Please seek us out if interested. Our finances are public, so the community knows, and will know, how all tokens are distributed. We hope to be fair to each and all.

Internally, business matters have been handled quite similarly. Largely each one takes initiative upon self-directed, self-created projects or roles, which they believe they can accomplish and which they think add value. As we are ‘building a restaurant from scratch’, there are so many opportunities to contribute that there is little need to specify any particular assignment. If we had 400 people and a blockchain built tomorrow, surely this would be of a higher value than one built two years from now. To summarize this point, we look for highly talented people who are able to create a position for themselves within Alvalor, and have the discipline and motivation to deliver without requirement of a manager.

As we progress, our list of priorities is likely to become consolidated and more managed. Those who have shown reliability will be given assignments, teams to manage, and so forth. This transition shall occur organically, but it is the future direction we foresee.

Regarding team discussion, we pride ourselves on breaking changes when analyzing problems and minimalism when creating solutions. A ‘breaking change’ analysis of a problem means, generically: what is the ideal or best solution, given no prior restraints or requirements? An example of a breaking change was the move away from flip phones and buttons to touchscreens. As opposed to ‘how better to design a keyboard’, Apple simply removed it. When looking from this vantage point, one must become immersed in the future direction of technology, be in tune with customer wants and know exactly what they need, sometimes more than even they do. This process might mimic a form of brainstorming, with more emphasis placed on justified reasoning, problem analysis and fast decision making, as opposed to a perfect, or even reasonable, solution.

After consideration, we move on to prepare the minimalist solution required, one most achievable. While it is great to set time aside for grand mental exercises, at the end of the day we want solutions with the least amount of risk exposure, or attack vectors, using the least amount of resources to fit the specific need. This is done to honor real world practicality, maximize resource efficiency and to harden structural integrity by reducing exposures to well meaning, but unintended consequence. We recognize the path to destruction begins by meaning well, and we hope to create things which have the fewest variables in which our creations grow to become so misaligned.

Following these guidelines has enabled us to maintain positive momentum and make agile decisions of approximate accuracy, without excess continuity burden in trying to perfect something whose relevance has already withered.

If you are interested in participating in our group discussions, we invite you to join our Telegram; it is a great first place to start. From there, all and one are welcome to contribute to the code on our Github, if you have the time, desire, motivation and ability. Alternatively, youcan contribute a Medium article, or join us on the team calls, which occur most Thursdays at 16:00 CET / 10:00am EST, over Google Hangout. Be in touch, and we will find something for you.

Below I will summarize the nature of some prior discussions, for posterity, and to help illustrate our governance systems.

Alex and Max meet up and begin working toward a new project, Alvalor

Alex, Max and Keller discuss ICO considerations

On the plus side, an ICO would provide early startup capital. However, forgoing an ICO allows us greater technology and financial freedom, with fewer commitments, allowing for greater flexibility for years to come. Added more, the good feeling of offering up our tokens as a public utility was not something we could easily shake. Finally, “The ICO market has turned into a greedy cesspool that doesn’t align with the project’s philosophy,” said Max. Max thus proposed the idea of a 50% airdrop, of some kind, and Alex and Keller wanted to make it work. Ultimately, we decided to keep our day jobs for a time longer, so that our life’s project would not risk being marred by short-term capital exchanges and commitments.

Alex, Max and Keller discuss airdrop methods and quantities

In these discussions we reviewed Auroracoin , Stellar Lumens, and other systems of coin distribution, such as utilizing Pokemon Go, World of Warcraft Gold, Magic the Gathering and alternative systems of social exchange. We identified the failing of Aurora was to force the coin upon those who had no known desire for it. ‘All of Iceland’ does not want cryptocurrency. To mitigate this, we created an airdrop system in which one needs to sign a message to claim tokens, as opposed to forcing them into wallets, regardless of interest. Secondly, regarding distribution of tokens, initially a 1 for 1 distribution of ETH to TVAL (Alvalor), or linear escalation, was proposed. Keller proposed a system of distributing a flat amount, such as 5 TVAL, to each ETH address, regardless of holdings. Later, we all agreed to a proposal by Max to use a logarithmic distribution which provided those with 1 ETH 60 TVAL, and those with 450,000 ETH with 400 TVAL. Thus, there was a balance of creating a diverse set of benefactors, while maintaining some considerations for wealth. As noted, we ultimately chose to utilize the Ethereum airdrop platform, as it was significantly more practical than other alternatives, and frankly speaking, has attracted many participants with whom we and the community frequently associate.

Alex, Max and Keller discuss foundation structure and distributions

Initially we had set our sites on becoming another Swiss non-profit foundation. The legal entity was quickly set up. However, as time progressed, and without the consideration of an ICO, this structure became unnecessary. Alvalor now resides near entirely within Luxembourg, thus it makes sense to incorporate there, as it is likely to be the home of our first partnerships. The decision of locating the project in Switzerland was quickly reversed and the dissolution of the foundation initiated. There is a sense of olympic pride that comes from representing one’s home country, even in small things. From there, we drew up financial arrangements which seemed sufficient to sustain and initiate the initial protocol, postponing any future endeavors and discussion of on chain distribution governance until we are better able to access abilities and community sentiment, which is still budding.

Alex, Max, Keller, Marina, Sergii and Badr discuss airdrop implementation

Marina proposed new designs for the website, and made other reviews and contributions. Alex took the lead in communications and community relations. Badr implemented the frontend website for the airdrop, while Max implemented the smart contract and the backend. The snapshot was taken on the first Ethereum block after midnight (CET) on Christmas Eve, for a unique santa surprise. The collective work was reviewed and final touches, such as the FAQ, were added by the whole team in collaboration with some early access users from the community. The implementation of this process went quickly, as the work began once the vision was crystal clear, and all were reading the same page.

And that is where I will leave this narrative. On to the protocol.