Welcome to our tutorial on Governance in Klaytn. In the world of blockchain, governance refers to the process by which stakeholders make decisions about the future direction and operation of the network. In Klaytn, governance is a crucial aspect of the network, as it allows for participation from all members of the community and ensures that the network remains decentralized and responsive to the needs of its users. In this tutorial, we will explore governance in Klaytn in detail, including its structure, its mechanisms, and its impact on the network. Whether you are a developer, researcher, or simply a blockchain enthusiast, this tutorial will provide valuable insights into the inner workings of governance in Klaytn and how it plays a role in the functioning of the network.
Governance in Klaytn refers to the process by which stakeholders make decisions about the future direction and operation of the network. The governance process is designed to be decentralized and inclusive, allowing for participation from all members of the community.
In Klaytn, governance is achieved through the use of governance tokens, which are used to vote on proposals for changes to the network. These proposals can include changes to the network’s protocol, the addition of new features, and the allocation of resources.
The governance process in Klaytn is based on the “Delegative Proof of Stake” (DPoS) consensus mechanism. Under this mechanism, token holders can delegate their voting power to other token holders, known as “validators,” who are responsible for validating transactions and maintaining the network. Validators are elected by token holders through a voting process, and they are rewarded for their work with a portion of the transaction fees collected by the network.
The governance process in Klaytn is designed to be transparent and accountable, with all proposals and voting results being publicly available on the blockchain. Additionally, the Klaytn Governance Council, a group of reputable organizations and individuals, has been established to provide guidance and direction for the network’s governance process.
In summary, Governance in Klaytn refers to the process by which stakeholders make decisions about the future direction and operation of the network. It’s achieved through the use of governance tokens
Klaytn Governance: Taking the First Step to Decentralization
The Klaytn Governance Council is a council that has the right to decide various governance matters. To secure its reliability, the early members of the Governance Council have been limited to trusted organizations. This was chosen for the sake of efficiency in the platform’s development and stabilization stage. Klaytn reached the stage by joining hands with 31 Governance Council Members and a seamless operation of the Klaytn Mainnet.
Klaytn believes that Klaytn governance should lead Klaytn’s growth aligned with the transition of our world. One of the key transitions in the world is coming from the growth of the metaverse. Technological advancements are ushering in a more metaversified world. In particular, we are witnessing the growth of the influence of non-traditional entities such as Decentralized Autonomous Organizations (DAOs) and builders. As an organization operating on smart contracts without a centralized structure, DAOs will be a core entity in the metaverse. Builders will have more influence by contributing to the operation and growth of the metaverse.
We are reorganizing our governance structure to better accommodate the changing world. In addition to traditional enterprises, Klaytn is opening up the Membership of the Klaytn Governance Council to the non-traditional entities mentioned above.
By introducing a stake-based governance model and eliminating the Gini Coefficient from Klaytn’s voting mechanism, Klaytn enables governance participants who can gather more support from Klaytn Communities to shape Klaytn in line with their preferences. Entities who can make a proper decision in a Metaversified world will have more influence in the Klaytn GC. We believe DAOs and builders will lead the scene in the future.
When the level of metaversification crosses the critical threshold, Klaytn governance will be fully decentralized with various types of entities. Ultimately, Klaytn will evolve into a DAO of DAOs and a platform for DAOs to communicate the voices of Klaytn Communities through on-chain mechanisms.
The main topics that can be decided through the governance structure include the following three areas and proposals that require additional decision-making may be introduced in a regular meeting or temporary meeting for review. The Klaytn Governance Council must make decisions that are best for the growth of Klaytn.
Matters related to the technical update of the platform. Here the issues on the blockchain’s basic structure (e.g., Account Structure), new features (e.g., L2 solution), or software update schedule are included.
Issues relating to additional issuance of KLAY and its distribution structure, changes in transaction fees, Klaytn Improvement Reserve spending approval, etc. are included in this category.
The governance subjects and processes, as well as the rules for the responsibilities and rights of governing bodies, are included in this category.
Klaytn principally aims for the governance process to occur within the protocol (on-chain). Through this process, the votes will be recorded on the blockchain, and the results will be carried out following the vote. As the platform grows, more matters will be handled through on-chain governance.
General Governance Process
The initial governance process proceeds in the following order: proposal introduction, statement of opinion submitted by advisors, voting by council members, and various follow-up procedures depending on the result of the vote.
Those who have the right to introduce proposals can make sure each proposal is voted on by introducing it. Once the proposal is introduced, the advisors must conduct an expert analysis of the proposal and submit a statement of opinion with their results.
During the initial phase of Klaytn governance, the Klaytn Governance Council members will have the right to vote on the introduced proposals and will reference the advisors’ statements of opinion to vote on what they believe to be the best option. If the number of votes passes the threshold, the proposal will pass; if not, the proposal will be dismissed. In its initial phase, the voting process may be replaced by a discussion process facilitated by the Klaytn foundation. The follow-up measures for an approved proposal will be led by the chairman, and the chairman has the responsibility to carry out all the proposals that have been passed by the council during his or her term.
Klaytn Improvement Reserve Review Process
The KIR Proposal review will be decided through the voting of the Governance Council members, and the proposal will be rejected if half of the committee or more vote against(rejected) the proposal. For more details on the KIR Proposal review, refer to the following.
The bodies participating in governance must act in consideration of Klaytn’s long-term benefits rather than just for their personal interests, and they must actively participate in the governance process. Additionally, all participants that contribute to the network as Klaytn Governance Council members must secure computing resources that are greater than the platform requirements and stake a set amount of KLAY of their own or from third parties. For smooth operations in the development and stabilization of the platform, Klaytn Foundation will take on many roles in governance-related matters in the initial development phase. In the future, however, other bodies will gradually take on greater roles in the decision-making process, and they will have the right to participate independently.
Development Phase: The initial development phase after the mainnet launch must quickly see parameter adjustments, new feature developments, etc. For this to be possible, many issues will be decided by gathering the opinions of the Klaytn Governance Council members, service providers, and community members. To secure initial stabilization, Klaytn Foundation will lead the decision-making process. Additionally, all decided matters will be transparently shared with the public.
Stabilization Phase: The Klaytn Governance Council has governing rights on many proposals and this phase will gradually begin starting Jan 2021. For special matters such as those concerning platform development, and matters that directly affect the overall Klaytn ecosystem, Klaytn foundation may facilitate the discussion and execution.
Decentralization Phase: Following the stabilization period, a number of non-traditional entities such as DAOs and builders may be brought into the decision-making process for additional opinions. The decentralization phase may be gradually achieved through multiple stages with different governing rules and participants.