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# System prepended metadata

title: Permissionless guardrails

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# Permissionless guardrails

Governance Structures in permissionless protocol environments requires more intricacies in implementation to primarily serve the community including key stakeholders with technological substrate to coordinate all resources and opinions
Over the years many research has been done on the topic but no holy grail has been found to resolve all major aspects of governance.

In some governance structures, issues of collusion can arise from closely aligned groups who may influence key decisions by altering protocol parameters for their benefit. Although the principle of open participation is fundamental, informal hierarchies tend to form. Individuals who have consistently contributed over time, have deep technical expertise, or hold a clear vision of the protocol’s direction often earn influence and respect within the community, becoming "Benevolent Dictators([high sparrows](https://en.wikipedia.org/wiki/High_Sparrow))" for a set period.

Over the years, the industry has employed various mechanisms to uphold fair governance such as quadratic voting, stake-weighted voting, quorum requirements, and soulbound tokens. These methods have functioned as permissionless safeguards for the past three years and currently represent promising solutions for establishing on-chain identity systems and reputation attestations across different verticles.


### Mina Governance's Vision

Over the past few months the work by Mina Foundation to implement a fair goverance structure looks promissiing based on these aspects:
- Direct communication with the community through [survey bot](https://github.com/MinaFoundation/gptSurveySummarizer) actively collecting feedbacks from the community
- MEF Test, which mimics how the ecosystem's projects, initiatives and operations will reqeuest funding which shows how Mina can be a [lab for deliberation](https://docs.google.com/document/d/1gbELywH8pxt3sa_QPA1Cnn_42crKDrivP7GYBVa9yCA/edit?tab=t.0) using [collective intelligence](https://directus.thegovlab.com/uploads/ci_cases/originals/b3b84db2-296c-435d-968a-8d066c6a7b87.pdf) using minimum viable experiments(MEF test)

The Mina  vision brings forth permissionless guardrails with a focus on:
- On-chain Identity system
- On-chain contribution and reputation leaderboard
- Algorithmic coordination

![image](https://hackmd.io/_uploads/r143knMfyx.png)


## Proposed solution overview and recomendations

PGs will be formed through an on-chain DAO like system, which will self govern its membership parameters (and thus indirectly its members), as well as adding capabilities into the ecosystem. Technically speaking, It should be enabled to define and enforce any on-chain changes, inclusive of changing its own parameters governing its social consensus and democracy.

This work is heavily inspired by the widely appreciated E. Glen Weyl research related to Quadratic Voting and Quadratic Funding well described in [Radical Markets: Uprooting Capitalism and Democracy for a Just Society](https://press.princeton.edu/books/paperback/9780691196060/radical-markets). Moreover, the thesis is highly correlated with ["Decentralized Society: Finding Web3’s Soul"](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4105763) by Glen Weyl, Puja Ohlhaver and Vitalik Buterin and ["Plural Management"](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4688040) by Glen Weyl, Scott Moore, Petar Maymounkov, Shrey Jain, Leon Erichsen, Tobin South.

Governace guardrails serve to
- **Define Decision-Making Processes:** Establishing clear procedures for proposing, discussing, and approving decisions.
- **Allocate Authority:** Determining who has the power to make decisions and how that power is distributed.
- **Manage Conflicts:** Providing mechanisms for resolving disputes and disagreements.
- **Ensure Accountability:** Holding decision-makers responsible for their actions and the outcomes of those decisions.


**1. On-Chain Identity System**

a "Proof of Unique and Alive Human". The output of each such algorithm can be represented by a Soulbount Token (SBT). The algorithm can be something as simple as proof of attendance, or complex things like Face Recognition, Social Graph mining where it can be use to leverage the collusion betwen individual and decrease the tension between corellation of decision in votes. The goal here is to allow multiple options to represent a constantly evolving world.

It can be expressed by a combination of one's fingerprint, look of their face, who their friends are and how often they meet, their accounts on social media, their passport and social security number, their phone number and address, even their attention and skill at solving fuzzy problems.

Soulbound Tokens (SBT) adds three important features to the NFT standard:

- Non-transferrable - Important to ensure people can’t use the same credential to verify many accounts as unique
- Recoverable - Important in case a user loses their private keys or their account becomes compromised in any way.
- Expiration + Renewable - Important feature to ensure people come back with some frequency to be re-credentialized, for example to prevent the token to be used after a user dies or to collect annual fees
With these added features, SBTs become advantageous as carriers of individual human attributes, such as uniqueness or aliveness.

**2. Contribution and Reputation leaderboard**

The transparency of onchain systems allows for the creation of public and verifiable leaderbaoards 

**Management/voting credits:** management credit are earned through individual contributions to an activity in an organisation, This system could be adapted to create reputation scores or trust ratings associated with onchain identities. For example, users could earn reputation points for participating in governance activities, contributing to open-source projects, or completing transactions in a reliable manner.

management credit serve as a dynamic legder of contribution and influence. The expenditure of these credits in setting priorities and approving contributions is governed by a quadratic cost function, steering towards optimal public goods outcomes by avoiding excessive dom-inance of those with greater authority.

To scale down over-powered members, and avoid [tyranny of whales and superusers](https://en.wikipedia.org/wiki/Tyranny_of_the_majority) we typically apply a square root of the voting power to get the voting credits, which are used when voting on a proposal. To broaden participation, some votes can use a cube root or any other higher quadratic power, which would scale down the plutocratic voting power even more. And true one-human-one-vote can also be considered in certain vote scenarios.

voting credits are assigned to the user independently for each proposal, according to her state  at the time of the vote, according to the following formula:$$\text{voting credits} = e^{\left(\frac{1}{\text{power}}\right)} \times \text{soul strength}$$

**proof**

assume $p$ is the amount of token held by user $x$ and $s$ is the current value of reputation on the leaderboard

**scenario 1:**
$x$ = $10$
$s$ = $5$

$Vcredits = e^{(\frac{1}{10})} \times 5$
$Vcredit = 1.1052 \times 5 = 5.526$
                
**scenario 2:**
$x$ = $1$
$s$ = $10$

$Vcredits =e^{(\frac{1}{1})} \times 10$
$Vcredit = 2.718 \times 10 = 27.18$


- Even though the second user has lower "Power" (1 compared to 10), their **soul strength** (reputation) is much stronger (10 compared to 5), leading to a higher voting power in this example.
- The diminishing effect of "Power" (due to the $e^{(\frac{1}{power})}$ term) means that as "Power" increases, it contributes less to the overall voting power.

For a broader onchain identity system and since they are non-transfarable, a mechanism for transferring or sharing reputation between different platforms and applications could be explored. eg: [CodeArena's points to Sherlock](https://docs.sherlock.xyz/audits/watsons/watson-points-example#where-do-leaderboard-points-come-from)

**3. Algorithmic Coordination**

In the case of Mina's Governance, Subject matter experts can adjust parameters to incentivize certain behaviors, such as encouraging participation in voting or predicting the outcome of proposals.  This concept could be extended in the algorithmic coordination mechanisms that adjust incentives and parameters based on the overall health and activity of the network.

For example, algorithms could dynamically adjust the rewards for contributing to specific tasks or projects based on the network's current needs. If a particular area of development requires more attention, the algorithm could increase the rewards for contributions to that area.

**Conviction Boost**
This is a novel mechanism that can be an alternative to predictive markets which also reduces technical implementation where members can express their governance conviction by bonding tokens(power) for a longer period of time. In exchange, they will get more vote credits(eg 20% more by bonding for 1 month).

conviction gov parameters:
- conviction staking (min, max) factor and max duration. Example: when ```min=1, max=2, max_duration=4months``` then a member who locks their tokens for 4 months will increase amount of their bonded vote credits by 2x.

**Dispenser**
A dispenser is a grant allocation mechanism. Dispenser is a grant disburse mechanism, which doesn't allocate the whole grant at once. Instead, it disburses the grant in multiple stages. We will provide two mechanism:

- Based on predefined milestones.Each grant will have assigned committee which will evaluate progress of a project and unlock subsequent grant allocations.
- Time based vesting (eg 5% every month). The dispenser can be stopped any time by SBE or by an associated individuals.

### Next Steps

- Edge-cases