ARC-34: Governance proposal process Source

Criteria for the creation of proposals.

AuthorStéphane Barroso, Adriana Belotti, Massimo Morini, Michel Treccani, John Woods, Shai Halevi
Discussions-Tohttps://github.com/algorandfoundation/ARCs/issues/151
StatusLiving
TypeMeta
Created2022-11-22

Table of Contents

Abstract

The goal of this ARC is to increase transparency and efficiency in the decision-making process by clearly defining the steps involved and ensuring that all proposals are given proper consideration.

Specification

The key words “MUST”, “MUST NOT”, “REQUIRED”, “SHALL”, “SHALL NOT”, “SHOULD”, “SHOULD NOT”, “RECOMMENDED”, “MAY”, and “OPTIONAL” in this document are to be interpreted as described in RFC-2119.

What is a proposal

A proposal within the xGov program aims to provide funding for:

  • Funding for early stage projects
  • Facilitation of community involvement
  • Addressing the needs of the community

Duty of a proposer

Having the ability to propose measures for a vote is a significant power, which requires:

  • A thorough understanding of the needs of the community
  • Alignment of personal interests with the advancement of the Algorand ecosystem.

    Issues requiring resolution may have been discussed on various online platforms such as forums, discord, and social media networks.

Voting System

The voting system for the xGov program will be the following:

  • Only xGovs are eligible to participate in the voting process
  • Utilization of the Algo committed by xGov as a form of voting currency, with a 1:1 ratio of Algos to votes
  • Proposals that do not reach the threshold of votes required will be removed from consideration.

Threshold

In order for a proposal to be approved, it is necessary for the number of votes in favor of the proposal to be proportionate to the amount of funds requested. This ensures that the allocation of funds is in line with the community’s consensus and in accordance with democratic principles.

eg. 2 000 000 Algo are available to be given away as grants, 200 000 000 millions Algo are committed to the xGov Process (200 000 000 votes available):

  • Proposal A request 100 000 Algos (5 % of the Amount available)
  • Proposal A needs 5% of the votes (10 000 000 Votes) to go through

Life of a proposal

The proposal process will have the same duration as the governance period. Within the 3 months, the following steps will be implemented:

  • Anyone can submit a proposal at any time.
  • 0.5 months after the start of a governance periode, proposals submitted enter the process
  • 1 month is allocated for proposals refinement and temperature check. Proposals will be evaluated and refined by the community and xGovs.
  • 1 month is allocated for voting on proposals. The community will vote on proposals that have passed the refinement and temperature check stage.
  • 0.5 months for negotiation and claiming grants. Proposals that have been approved will be negotiated and grants will be claimed.

Submit a proposal

In order to submit a proposals, a proposer needs to create a pull request on the following repository: xGov Proposals.

Proposals MUST:

  • Follow the template form provided.
  • Follow the rules of the xGov Proposals Repository.
  • Have the status Final before the end of the temperature check. (1,5 Months after the start of a governance)

Voting on proposal

At the start of the voting period (1,5 Months after the start of a governance) xGovs ARC-33 will votes on proposals through an on-chain votes.

Vote will refer to the PR number and a cid hash of the proposal itself.

The CID MUST:

  • Represent the file.

  • Be a version V1 CID
    • E.g., use the option –cid-version=1 of ipfs add
  • Use SHA-256 hash algorithm
    • E.g., use the option –hash=sha2-256 of ipfs add

Grants calculation

The allocation of grants will be distributed taking into consideration the funding request amounts. The Algorand foundation will initiate contact with the proposal’s author to negotiate final terms and conditions.

Rationale

The current status of the proposal process includes the following elements:

  • Proposals will be submitted off-chain and linked to the on-chain voting through a hash.
  • Projects that require multiple funding rounds will need to submit separate proposals.
  • The allocation of funds will be subject to review and adjustment during each governance period.
  • Voting on proposals will take place on-chain.
  • There is currently no maximum limit set on the number of proposals that can be voted on.

Other considerations that have been discussed include:

  • Allocating funding in two stages, with 25% provided at the start of the project and the remaining 75% distributed upon approval by the xGov vote (on another quarter).

We encourage the community to continue to provide input on this topic through the submission of questions and ideas in this ARC document.

Security Considerations

None

Copyright and related rights waived via CCO.

Citation

Please cite this document as:

Stéphane Barroso, Adriana Belotti, Massimo Morini, Michel Treccani, John Woods, Shai Halevi, "ARC-34: Governance proposal process," Algorand Requests for Comments, no. 34, November 2022. [Online serial]. Available: https://algorandfoundation.github.io/ARCS/arc-34.