ARC-34: xGov 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 clearly define the steps involved in submitting proposals for the xGov Program, to increase transparency and efficiency, ensuring all proposals a 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 engagement
  • 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. Proposals requesting a large amount of funds SHOULD split into a milestone-based plan. See Submit a proposal

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.

The formula to calculate the voting power needed to pass a proposal is as follows: Voting Power Needed = (Amount Requested) / (Amount Available) * (Total Number Of Algo In Term Pools)

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

  • 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 follow steps below:

  • Anyone can submit a proposal at any time.
  • Proposals will be evaluated and refined by the community and xGovs before they are available for voting.
  • One month is allocated for voting on proposals. The community will vote on proposals that have passed the refinement and temperature check stage.

If too many proposals are received in a short period of time. xGovs can elect to close proposals, in order to be able to handle the volume appropriately.

Submit a proposal

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

The tutorial can be found here: xGov proposal submission Tutorial.

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.
  • Milestone-based grants must submit a proposal for one milestone at a time.
  • Milestones need to follow the governance periods cycle. With the current 3-months cycle, a milestone could be 3-months, 6 months, 9 months etc.
  • The initial proposal must include display all milestones with clear deliverables and the amount requested must match the 1st milestone.
  • Once a milestone is achieved, the team must submit a proposal for the next milestone, including ways for xGovs to verify that the milestone is completed.

Voting on proposal

At the start of the voting period xGovs ARC-33 will vote on proposals using the voting tool hosted at [URL TBD].

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 consider the funding request amounts and the available amount of ALGO to be distributed.

Grants contract & payment

  • Once grants are approved, the Algorand Foundation team will handle the applicable contract and payment.

For milestone-based grants, please also refer to the Submit a proposal section

Disclaimer jurisdictions and exclusions

To be eligible to apply for a grant, projects must abide by the Disclaimers (in particular the “Excluded Jurisdictions” section) and be willing to enter into a binding contract with the Algorand Foundation (template link coming soon) . Additionally, applications promoting gambling, adult content, drug use, and violence of any kind are not permitted.

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.

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: xGov Proposal Process," Algorand Requests for Comments, no. 34, November 2022. [Online serial]. Available: https://github.com/algorandfoundation/ARCs/blob/main/ARCs/arc-0034.md.