By Solidarity Staff, in collaboration with Jalen Abron

We the People: Can constitutions unify blockchain communities?

The Solidarity Project: Constitutions and other Enabling Documents

Photo by Anthony Garand on Unsplash

In this article, we examine the purpose of a constitution and examine EOS and Decred, two blockchain projects with their own constitutions.

In part one, we examine the what and why of constitutions. In part two, we discuss fictive kinship and how it may give rise to blockchain constitutions. In part three, we examine the EOS community’s attempt at creating a constitution. In part four, we examine the Decred community’s attempt at creating a constitution. Lastly, we provide a short conclusion with some recommendations.

I. Constitution

Before we dive into blockchain communities that have their own constitutions (hereinafter “blockchain constitution”), lets start with a definition of “constitution” to guide us.

A constitution, as defined by Merriam Webster’s Online Dictionary in 1(a), is:

the basic principles and laws of a nation, state, or social group that determine the powers and duties of the government and guarantee certain rights to the people in it

We settled on this definition for its ease of use and understanding.

Why does anyone need a constitution?

A constitution is an extremely useful written or unwritten approach to governance because the constitution describes to all stakeholders in the community the following:

the community’s principles and values;

decision-making procedures;

collection, budgeting, distribution and accounting (“financing”) of community funds;

the powers, duties and restrictions of government departments;

the rights reserved to community members;

dispute resolution among community members;

how community members can elect their representatives;

how elections will be held;

the fundamental laws of the community; and

the extent and manner of the government’s exercise of sovereign power.

Through a constitution, the governing and the governed have transparency over how each is expected to behave within the constitutional system.

Though, a constitution is not limited to the above.

Why would a blockchain community want a constitution?

A blockchain community would benefit from the creation of a constitution regarding a clear, concise and transparent set of rules and procedures in conducting their community affairs.

A constitution would provide the most benefit regarding off-chain decision-making (on-chain as well but generally the protocol handles this matter), election of community members to governing or overseeing organizations (e.g., non-profit foundation to maintain software or investment group to grow the ecosystem), community finances, and unifying the principles and values of the community (See, e.g., how the many different views of what Bitcoin should be has led to any number of forks to the Bitcoin blockchain).

This is also of the reasons why Decentralized Credits (Decred) has a constitution, as to avoid the issues that have befallen the Bitcoin community.

Having a constitution also helps provide a sense of stability and predictability for the community, and to prevent newcomers who lust for power from entering the community and imposing their will on others.

II. Fictive Kinship

Fictive kinship, as defined in Collins Dictionary, is:

a term used by anthropologists and ethnographers to describe forms of kinship or social ties that are based on neither consanguineal (blood ties) nor affinal (“by marriage”) ties, in contrast to true kinship ties.

Now, does fictive kinship exist within blockchain communities? We would like to make the suggestion that it does.

Members of a blockchain community are generally not brought together by consanguineal or affinal ties. Rather, members of a blockchain community are brought together by a common blockchain protocol, a procedure for amendments thereto, and a set of principles and values.

For example, the Bitcoin community is tied together by the Bitcoin Core software which connects nodes to the Bitcoin network to interface with the Bitcoin blockchain (the common blockchain protocol), the Bitcoin Improvement Proposal procedure to suggest amendments to the Bitcoin blockchain (amendment procedure), and the set of principles and values professed by Satoshi Nakamoto (decentralized, public, distributed, censorship-resistant, open source).

III. EOS Constitution

EOS logomark. Solely for Normative Use. All rights reserved to Trademark and Intellectual Property owners.

To begin, we shall provide the first version of the EOS constitution, as of June 7, 2018. The second version of the EOS constitution is still undergoing deliberation [2] [3].

EOS Constitution V.1:

This Constitution is a multi-party contract entered into by the Members by virtue of their use of this blockchain. Article I — No Initiation of Violence Members shall not initiate violence or the threat of violence against another Member. Lawful prosecution of crimes with the goal of preserving life, liberty and property does not constitute initiation of violence. Article II — No Perjury Members shall be liable for losses caused by false or misleading attestations and shall forfeit any profit gained thereby. Article III — Rights The Members grant the right of contract and of private property to each other, therefore no property shall change hands except with the consent of the owner, by a valid Arbitrator’s order, or via community referendum. This Constitution creates no positive rights for or between any Members. Article IV — No Vote Buying No Member shall offer nor accept anything of value in exchange for a vote of any type, nor shall any Member unduly influence the vote of another. Article V — No Fiduciary No Member nor EOS token holder shall have fiduciary responsibility to support the value of the EOS token. The Members do not authorize anyone to hold assets, borrow, nor contract on behalf of EOS token holders collectively. This blockchain has no owners, managers or fiduciaries; therefore, no Member shall have beneficial interest in more than 10% of the EOS token supply. Article VI — Restitution Each Member agrees that penalties for breach of contract may include, but are not limited to, fines, loss of account, and other restitution. Article VII — Open Source Each Member who makes available a smart contract on this blockchain shall be a Developer. Each Developer shall offer their smart contracts via a free and open source license, and each smart contract shall be documented with a Ricardian Contract stating the intent of all parties and naming the Arbitration Forum that will resolve disputes arising from that contract. Article VIII — Language Multi-lingual contracts must specify one prevailing language in case of dispute and the author of any translation shall be liable for losses due to their false, misleading, or ambiguous attested translations. Article IX — Dispute Resolution All disputes arising out of or in connection with this Constitution shall be finally settled under the Rules of Dispute Resolution of the EOS Core Arbitration Forum by one or more arbitrators appointed in accordance with the said Rules. Article X — Choice of Law Choice of law for disputes shall be, in order of precedence, this Constitution and the Maxims of Equity. Article XI — Amending This Constitution and its subordinate documents shall not be amended except by a vote of the token holders with no less than 15% vote participation among tokens and no fewer than 10% more Yes than No votes, sustained for 30 continuous days within a 120 day period. Article XII — Publishing Members may only publish information to the Blockchain that is within their right to publish. Furthermore, Members voluntarily consent for all Members to permanently and irrevocably retain a copy, analyze, and distribute all broadcast transactions and derivative information. Article XIII — Informed Consent All service providers who produce tools to facilitate the construction and signing of transactions on behalf of other Members shall present to said other Members the full Ricardian contract terms of this Constitution and other referenced contracts. Service providers shall be liable for losses resulting from failure to disclose the full Ricardian contract terms to users. Article XIV — Severability If any part of this Constitution is declared unenforceable or invalid, the remainder will continue to be valid and enforceable. Article XV — Termination of Agreement A Member is automatically released from all revocable obligations under this Constitution 3 years after the last transaction signed by that Member is incorporated into the blockchain. After 3 years of inactivity an account may be put up for auction and the proceeds distributed to all Members according to the system contract provisions then in effect for such redistribution. Article XVI — Developer Liability Members agree to hold software developers harmless for unintentional mistakes made in the expression of contractual intent, whether or not said mistakes were due to actual or perceived negligence. Article XVII — Consideration All rights and obligations under this Constitution are mutual and reciprocal and of equally significant value and cost to all parties. Article XVIII — Acceptance A contract is deemed accepted when a member signs a transaction which incorporates a TAPOS proof of a block whose implied state incorporates an ABI of said contract and said transaction is incorporated into the blockchain. Article XIX — Counterparts This Constitution may be executed in any number of counterparts, each of which when executed and delivered shall constitute a duplicate original, but all counterparts together shall constitute a single agreement. Article XX — Interim Constitution This constitution is interim and is intended to remain in effect until a permanent constitution is written and ratified in a referendum. [1]

Overall, we found the EOS constitution to be lacking in regards to serving the purposes of a constitution. And because of that, we decided to only discuss certain portions of the constitution, and our major gripes with it.

Many Articles allude to a third party’s substantive legal framework, but fails to ever mention which legal framework is referenced. There are many issues with EOS’s constitution, but the most important is the confusion of the relationship between constitution and contracts and the parties they govern.

Specifically, a contract describes the relationship between two or more contracting parties (generally, only third party beneficiaries can enforce contract terms) while a constitution describes the relationship between the government and the people (which applies to the whole community). In other words, a contract (which is generally made for specific parties) should not be used in place of a constitution (which provides the fundamental law for the whole community).

This could have arisen from considering the constitution from a social contract theory viewpoint, wherein individuals consent, implicitly or explicitly, to surrender some of their freedoms to an authoritative body, in exchange for social order and preservation of their remaining freedoms [4].

As stated above, a constitution is the basic principles and laws of a nation, state, or social group that determine the powers and duties of the government and guarantee certain rights to the people in it.

A contract, as defined by Black’s Law Dictionary 2nd edition, is a “legally binding agreement involving two or more parties that sets forth an exchange of promises of what each party will or will not do…” [5]

Basically, if you want to truly make a constitution, keep in mind what is or is not a constitution.

We believe this confusion was a major contributor to the EOS blockchain halt incident in 2018 [6][7][8][9][10][11][12].

The incident arose when the 21 elected EOS Block Producers decided to freeze seven EOS accounts (i.e., public keys) suspected of theft without authorization from the EOS Core Arbitration Forum (ECAF) [6][7][8][9][10][11][12].

This action violated the EOS constitution because the block producers cannot execute such action without ECAF’s authorization [6][7][8][9][10][11][12]. Furthermore, ECAF declined to order freezing the seven accounts because the EOS constitution was not finalized at the time (refer to Article IX and XX), thus ECAF had no authority to make such an order [1][6][7][8][9][10][11][12].

Despite ECAF’s denial, the block producers took matters into their own hands and enacted EOS911 initiative, an initiative designed by EOS 42 block producer, to take safety measures to recover stolen funds [6][7][8][9][10][11][12].

This incident raised many concerns about centralization of the EOS network, and rightfully so, because the Block Producers in the EOS Constitution are simply an executory body, who can only act upon the explicit authorization of arbitrator bodies, such as ECAF [6][7][8][9][10][11][12].

Eventually, this led Daniel Larimer, EOS founder, to propose replacing the EOS constitution with a completely new constitution to avoid such incidents [6][7][8][9][10][11][12].

You may find the proposed EOS constitution 2.0 here: https://block.one/news/block-ones-proposal-for-eos-constitution-v2-0/

IV. Decred Constitution

Decred Logomark. Solely for Normative use. All rights reserved by the intellectual property owners.