What role does on-chain governance play in the decision-making process for upgrades and changes in the Polkadot network?
On-chain governance plays a critical role in the decision-making process for upgrades and changes in the Polkadot network. It allows stakeholders of the network to collectively participate in decision-making, ensuring a decentralized and inclusive approach to governance. Through on-chain governance mechanisms such as referenda and council votes, stakeholders can propose, discuss, vote on, and enact upgrades and changes to the network’s protocol and parameters.
Long answer
On-chain governance is an essential component of the decision-making process for upgrades and changes in the Polkadot network. Polkadot employs a hybrid governance model that combines both off-chain and on-chain decision-making mechanisms. Off-chain governance involves deliberations by stakeholders off the chain, while on-chain governance allows these decisions to be implemented directly through smart contracts on the blockchain.
Polkadot has a built-in module called “the common good” where proposals related to system-wide upgrades or changes are submitted. Stakeholders can put forward proposals for consideration by submitting them as runtime code via an upward queue. These proposals may include bug fixes, adding new features, modifying economic parameters, or changing block sizes.
Once a proposal is made, it goes through a collective decision-making process within the Polkadot ecosystem. There are two main on-chain mechanisms involved: referenda and council votes. Referenda are open votes where all DOT holders can participate directly by casting their vote either in favor or against a specific proposal.
The collective voting decisions are weighted according to stakeholder’s locked DOT holdings using a quadratic voting formula offering a more democratic approach than a simple majority vote. This ensures that larger stakeholders have more influence but not completely dominating smaller ones.
In addition to direct voting via referenda, there is also an elected council responsible for conducting pre-voting discussions about proposals before they become referenda. Council members are chosen based on their reputation within the community and hold authority to allocate treasury funds without referendum voting.
The combination of both referenda and council votes allows for a balanced decision-making process in Polkadot’s on-chain governance. It encourages active community participation, provides individual stakeholders with influence proportionate to their stake, and facilitates a fair representation of the broader community’s interests.
Through on-chain governance in Polkadot, upgrades and changes to the network can be proposed, debated, voted on, and ultimately implemented in a decentralized manner. This empowers the Polkadot community to have direct input into the future developments of the network, promoting transparency, inclusivity, and evolving the ecosystem according to the collective will of its stakeholders.