---
# System prepended metadata

title: NDC Gov Beyond v1
tags: [NDC]

---

# NDC Gov Beyond v1
###### tags: `NDC`

Status: Work in progress, collecting ideas.

## Summary

This document describes the governance framework evolution. Framework v1 is just the first step. We are  working on n new tools to fully empower the Near Digital Collective with mechanism described in the [NDC Voting Framework v2](https://hackmd.io/@robert-zaremba/SJ3TM8hIo)

## General Overview

* Moving towards decentralization and enabling wide NEAR Collective (various actors in the NEAR ecosystem, not only the NEAR token holders) in the governance process for both funding and development directions:
    * NDC should not only be able to manage it's treasury, but also impose directions for the NEAR Foundation and other executing bodies.
* Constitution will act as the primary source of the governance regulations. It contains fundamental principles for the NEAR ecosystem governance.
* Constitution should keep it's current form and outline the primary principle: **Community can act with direct governance**, 
    * NDC mission is to empower community with active and efficient governance tools.
* Constituion should be updated to include the [NDC Voting Body v2](https://hackmd.io/@robert-zaremba/SJ3TM8hIo) as the ultimate governance body:
    * Only NDC can update constituion.
    * NDC can dissolve any other governing body.
    * NDC socially guards the constitution.
* v1 Houses will stay, and will be accountable against NDC:
    * Budget planning and budget approval every 6 months (approved through NDC Voting Framework).
    * Election process update.
* Instead of focusing on HoM as a main unit to distribute funding, multiple communities (as DAOs) will be formed, and HoM will have keep them accountable.

## Preliminary

v2 of the Governance framework focuses on reducing the Central Planning and empowering a wide NEAR Collective community. Recent events in various blockchain ecosystem shows that central planning pose many risks, and the lack of transparency questions the reasons of the token economics and the true beneficiaries of the "native" treasuries. Few examples:
* [Algorand Decentralization Concerns](https://forum.algorand.org/t/algorand-governance-feedback-decentralization-concerns/3012): main complain is around there is not enough public information about how Algorand Inc., the Foundation and network are supposed to work and influence each other, as well as the whole **governance and ecosystem being centrally planned**.
* [Algorand xGov](https://www.algorand.foundation/news/xgov-expert-governors-system) is opening doors for external feedback, but there is no measure towards open governance, except that the final proposals will be voted using Algo.
    * The following part of the xGov program has a very positive feedback _If [a proposal] approved in principle in this vote, the Foundation will start the process of fleshing out this proposal_ -- meaning that a proposal imposes orders for execution bodies.
    * however the proposals are centrally planned, and the community is not empowered the shape the proposals (what measures will be in the proposals, or what directions will be specify in the proposal), hence there is a risk of the xGov being socially corrupted or not being objective with the ecosystem. Also, the process of selecting xGovs is not very clear yet and pose it's own risks: _it looks like we're creating more barriers to participation for folks who don't have as much resources. There are more hoops to jump through to be an xGov._ Good discussion emerged in the [forum](https://forum.algorand.org/t/thoughts-after-attending-deciphers-governance-roundtable-on-xgovs-arc-33-proposal/8498/13).
    * in other threads, a term _algocracy_ started to appear specifying that the voting with 1 Alog = 1 Vote supports whales and entities with huge stake (foundation, VCs, exchanges).
* Difinity has an excellent on chain governance solution through [Network Nervous System (NNS)](https://internetcomputer.org/docs/current/concepts/governance). Today, it is not used to manage treasury, but has a great potential for all sort of governance measures. There is a [strong call](https://forum.dfinity.org/t/transparency-within-the-dfinity-foundation/14872) from community towards more transparency in a way how the funds are managed and the priorities of development.

The faults of central planning and importance of  governance
The wonderful article: ["Central Planning As Overfitting"](https://www.radicalxchange.org/media/blog/2018-11-26-4m9b8b/) explains the importance of approachable, wide and simple social system, discuss the risks of _Central Planning_  

## Main Goals for NDC

NDC Governance v2 goal is to **limit plutocracy** and **improve decentralized meritocracy** and **govern protocol management** (parameter selection...). We creating an approachable, wide and simple social system by:
* Putting transparency an verifiability first.
* Constitution is the dominant proposal validation system. Proposals, which are in conflict with a constitution should be seen as a not valid one are reverted using social consensus. This puts the NDC framework more into a loosely coupled system category (ref [4]).
* Enableing anyone in the community to propose new directions for the foundation and working groups to make the governance system simple and eglitarian.
* Enableing different forms of stake (DAO participation, liquidity provision) to make the system more meritocratic (we kind of contributions provide governance credits).
* Adopting [plural governance](https://hackmd.io/@robert-zaremba/SJ3TM8hIo#Plural-Proposals) and [quadratic voting](https://hackmd.io/@robert-zaremba/SJ3TM8hIo#Quadratic-Voting), (ref [3]) to allow the community to express their true preference and limit the wealth factor. 
* Employing "few knobs" rule in the system design to have a system easy to understand, more resistant for attacks, less likely to overfit and avoid unexpected effects.

Only by epowering wide, decentralized community into the governance we can have both a holistic view of fault-tolerance governance and hold various execution bodies accountable:
* It's crucial to put execution bodies (working groups and the foundation) in competition.
* Ecosystem development should be secured long term by the ecosystem itself.
* Today, the NEAR Foundation has a revenue stream directly from the blockchain (the transaction fees and inflation). NDC can challenge that.
* Decentralization and plural governance is important for objective decision planning and is more resistant for corruption and coercion between decision makers.
* The importance of common goods development is equally crucial to the core system development. Ecosystem and specialized working groups can measure importance of various common good projects and involve companies to collaborate.


## House of Merit (HoM) v2

HoM will act fully on chain as a transparent DAO. The election process will be the same, except the election approval will be managed by the NDC DAO, rather than stake-weighted voting.

HoM, as any other community DAO, will have it's own budget to support various initiatives. However it's main role is to keep communities / collectives accountable:
* requesting reports
* blocking further funding if the community doesn't meet expectations
* understand the community's needs and align their interests with those of the NEAR ecosystem.

NDC can spin off new working groups and communities (DAOs) and use HoM to challenge them.

TODO: define the voting policy for HoM. Is there already one defined for v1?

## Voting Process

The proposal submission and voting process is described in the [NDC Voting Framework v2](https://hackmd.io/@robert-zaremba/SJ3TM8hIo)

We need to have an anti spam mechanism for proposals.
Anyone in the NEAR ecosystem can make an NDC proposal by:
1. collected minimum amount of supporters (on chain parameter, eg: 200)
    * Author should champion his idea using community media (discussion board, NEAR Social...) to collect supporters.
1. providing minimum deposit (on chain param, eg: 500 NEAR) -- must be big enough to limit amount of spam. Deposit will be:
    * returned imeediately if the proposal passed;
    * returned with delay (on chain param, eg 10days) if the proposal didn't pass;
    * partially slashed (rate as an on-chain parameter, eg 1/3) if No With Veto criteria met. The slashed amount will go to the NDC Treasury.

In addition to that, HoM can make NDC proposals, without any additional criteria (deposit, support)

### Option

We may consider an easier road for NDC member to make an NDC wide proposal. The idea is to use HoM to ratify the proposals as valid for final community vote: anyone can make a proposal for HoM by: 
1. getting enough supporters -- initial co-signers (1/8 of the "normal"). 
1. making a minimum deposit (eg 1/4 of the "normal" )

After that, HoM will have 30 days to review the proposal and put it into NDC proposal.


## References:

1. Algorand [xGov](https://github.com/algorandfoundation/ARCs/pull/152/files), [forum discussion](https://forum.algorand.org/t/thoughts-after-attending-deciphers-governance-roundtable-on-xgovs-arc-33-proposal/8498).
2. [Central Planning As Overfitting](https://www.radicalxchange.org/media/blog/2018-11-26-4m9b8b/).
3. [Quadratic voting and the public good: introduction](https://ideas.repec.org/a/kap/pubcho/v172y2017i1d10.1007_s11127-017-0404-5.html),
4. [Notes on Blockchain Governance](https://vitalik.ca/general/2017/12/17/voting.html)
