“As with organisms, the most successful blockchains will be those that can best adapt to their environments. Assuming these systems need to evolve to survive, initial design is important, but over a long enough timeline, the mechanisms for change are most important.” -Fred Ehrsam.

As the blockchain industry evolves at a frenetic pace, it is essential for Swarm to be adaptable so as to sustain the network over the long-term. Community governance remains at the very core of Swarm, as much as the decentralized blockchain technology underpinning it.

Our focus on harnessing a community governance model is to achieve this sustainability, and to maintain the balance between actionability and representation. By ensuring that our community has the agency to submit and discuss proposals, and to vote on how the network is best managed, Swarm aims to build trust and transparency, ensuring the best interests of all who are invested are always at the forefront in the organization’s decision making. Essentially, the objective of Swarm’s governance is to enable the will of the network to manifest itself and be acted upon.

With this in mind, and as voted upon by the community, Swarm is introducing Swarm Masternodes to scale its decentralized, trustless network.

Expanding its infrastructure with community-operated masternodes allows Swarm to achieve true decentralization while simultaneously rewarding node operators for their part in strengthening the network. Those who stake SWM tokens to operate a masternode not only receive block rewards but additional governing rights proportional to the amount of tokens they stake.

The Decentralization of Swarm Governance

The evolution from foundation to community governance is a process whereby each individual step needs to be proven and iterated upon. From its very earliest genesis, the steps towards the decentralization of Swarm governance are:

Inception — Founders conceived the idea of Swarm. Creation — Core team implement the first pilot concept and model its first manifestation. Resilience — Masternodes create shared and distributed infrastructure in order to ensuring adaptability and sustainability of the network. Propagation — Fractional masternode ownership further democratizes the network and promotes widespread adoption of the idea. Sustenance — Community validates the model through adoption and actionable decisions.

How will Masternodes govern Swarm?

Swarm’s governance model encourages discussion and evaluation of the network and the simultaneous management of the masternode model itself.

As a result of this, suggested proposals are submitted for open consideration, approval of proposals is conducted by a vote and implementation is administered by the Masternodes.

What types of decisions will Masternodes be involved in?

Masternodes will collectively determine core Swarm policies such as fee structures, incentives and rewards. In addition, Masternodes administer the Market Development Fund (MDF), reviewing and evaluating investment opportunities, voting on the allocation of funding, and setting a path towards maintaining the growth and sustainability of the MDF.

Governance of the MDF is significant, as this is the first time its importance will be demonstrated on the investment level. Additionally, Masternodes are called on to help determine the growth and development of the underlying network, and with access to development funds, they’re able to actively acquire services that improve the network as a whole.

What are the reasons to keep policy decisions in the hands of these actors?

“Skin-in-the-game will be the dominant set of ethics of the 21st century” — Francis Pouliot

By the nature and size of the staking requirements, Masternode operators contribute more capital to the stability and maintenance of the network than the majority of SWM token holders. In recognition of their support and vested interest, and bearing in mind that their goals are aligned with the success of the entire network, Masternode operators are granted greater influence. Maintaining this vested interest encourages the desired self-sustaining behavior that is vital to the success of Swarm and its entire community.

With Masternode operators holding the biggest stake in the Swarm network — “skin in the game”, and since it is they who maintain the core necessary infrastructure and functions for the network to exist and prosper, it follows that they should benefit the most from the network’s success.

Trialing network-wide democracy with fragmented participants is challenging, takes time to build up and can be more easily manipulated in its early days; with masternodes Swarm can kick off a higher engagement model right out of the gate with a self-selecting group of higher vested and highly motivated individuals. We can also learn a great deal from how this governance functions and apply it to the broader SWM governance over time

The need to experiment.

“Change is the only constant in life” — Heraclitus

While there are no guarantees that the project will be successful, having the tools and incentives to adapt to future unknown scenarios maximizes the likelihood of prosperity. With additional governance by masternode operators we can be flexible yet strong, creating a cooperative network whose members share in the common objective of making Swarm rewarding for all of its users. The future cannot be foreseen, but it can be prepared for. Creating and nurturing an environment that adapts to unpredictability is key; thus, alongside our commitment to legal compliance, the introduction of Masternodes to Swarm’s governance will be a vital tool that equips our community to navigate the emerging, exciting, yet unforeseen future of cryptocurrency and blockchain technology.