The Cosmos Hub has launched and one of its core features is the ability for Atom holders to collectively govern the blockchain. Atom holders can submit proposals and signal their approval or disapproval to proposals submitted to the network by signing a special type of transaction. The following article will cover the governance procedure on the Cosmos Hub and introduce our governance tool that allows any Atom holder to participate in the on-chain governance mechanism.
The Governance Procedure
In the current Cosmos Hub governance implementation anyone can submit a text proposal to the system. A minimum deposit is required for a proposal to enter the voting period during which Atom holders will be able to vote on whether the proposal is accepted or not. The numbers used in the following are based on the parameters implemented on the Cosmos Hub at the time of writing (25th March 2019).
Phase 1: The Deposit Period
For a proposal to be considered for voting, a minimum deposit of 512 Atoms needs to be deposited within 2 weeks from when the proposal was submitted. Any Atom holder can contribute to this deposit to support proposals, meaning that the party submitting the proposal doesn’t necessarily need to provide the deposit itself. The deposit is required as spam protection, Atom holders that contributed Atoms to a proposal will be able to collect their deposit when the proposal was accepted or when it did not reach the minimum threshold after 2 weeks.
Phase 2: The Voting Period
When the minimum deposit for a particular proposal is reached the 2 week (336h) long voting period begins. During this period, Atom holders are able to cast their vote on that proposal. There are 4 voting options ("Yes", "No", "No with Veto", "Abstain").
Important details in the governance implementation of Cosmos are:
- Only staked (bonded) tokens can participate in governance.
- Voting power is measured in terms of stake. The number of Atoms you stake determine your influence on the decision (coin voting).
- Delegators inherit the vote of the validators they are delegated to unless they cast their own vote, which will overwrite validator decisions.
Phase 3: Tallying Results
If a proposal is accepted depends on the result of the coin voting by Atom holders. The following requirements need to be satisfied for a proposal to be considered accepted:
- Quorum: More than 40% of the total staked tokens at the end of the voting period need to have participated in the vote.
- Threshold: More than 50% of the tokens that participated in the vote (after excluding “Abstain” votes) need to have voted in favor of the proposal (“Yes”).
- Veto: Less than 33.4% of the tokens that participated in the vote (after excluding “Abstain” votes) need to have vetoed the decision (“No with Veto”).
If one of these requirements is not met at the end of the voting period, e.g. because the quorum was not met, the proposal is denied. As a result, the deposit associated with the denied proposal will not be refunded and instead be awarded to the community pool.
Phase 4: Implementing the Proposal
An accepted proposal will need to be implemented as part of the software that is run by the networks’ validators. A future blog post will cover different types of proposals and how exactly validators coordinate to implement a proposal that passed the procedure described above.
For an exemplary governance vote, check out the first governance proposal from validator team B-Harvest about adjusting the block time rate used to calculate network inflation to mirror actual conditions in the network (Note: Chorus One is supporting this proposal because it aligns staking rewards paid out by the live network with what was described in the Cosmos whitepaper. We recognize that this is only a temporary solution and will support other proposals that introduce a dynamic adjustment based on network conditions).
How to Participate in Governance
At Chorus One, we aim to enable token holders to exert influence on network governance. For this reason, we created a tool that allows Atom holders to effortlessly cast their own governance vote from their Ledger device. You can find the tool on our Cosmos page:
Another part of our effort in terms of network governance is informing and discussing governance procedures and proposals with our community of delegators and the wider Cosmos ecosystem, join our Telegram and follow our social media channels to stay informed about our stance in matters of blockchain governance!
We believe the governance implementation of Cosmos with delegators inheriting validator votes, but delegators being able to overwrite validator choices and make their own decision is a great solution to the low governance turnouts that can be observed in other blockchain networks. We think this approach does good in striking a balance between a representative democracy (“proxy voting”) for less interested holders, while still allowing for direct influence for token holders that want to directly engage in network governance.
Cosmos Hub governance is still in its early days and we aim to provide our input into how the system could be improved, as we believe a well-functioning governance mechanism will increase the likelihood of success of the Cosmos Network, feel free to chat with us about your ideas!
Cosmos Governance Online Resources:
Chorus One Governance Tool:
Governance Proposals Statistics:
List of query commands (in gaiacli):
gaiacli query gov -h
Participation (through gaiacli):