Polkadot OpenGov Deep Dive

Key Insights

• Polkadot's OpenGov model places the community at the center of decision-making processes and eliminates any control from Parity Technologies and Web3 Foundation. Polkadot transitioned to OpenGov on June 15, 2023.
• OpenGov has seen the average number of referenda and votes increase by 1,008% and 1,981%, respectively, over the first six months. OpenGov introduced parallel tracks and simultaneous voting which has resulted in increased governance activity.
• Treasury proposals have increased 405%. Polkadot has a treasury of 41 million DOT ($410 million) to support the ecosystem.
• The Fellowship plays a crucial role in guiding the technical direction of the Polkadot network. It is responsible for technical proposals and ensuring that changes and updates to the network are aligned with Polkadot's long-term vision.

Primer

Polkadot (DOT) is a distributed blockchain computing platform that acts as a base layer for other sovereign blockchains, known as parachains, facilitating their validation and shared security. Polkadot was built using the Polkadot SDK, a blockchain development framework. Furthermore, Polkadot’s base layer is known as the Relay Chain, which employs a Nominated Proof-of-Stake (NPoS) consensus mechanism, and its state machine is compiled to WebAssembly (Wasm).

Polkadot's governance transitioned to the OpenGov model on June 15, 2023, marking a significant evolution from its original Gov V1 framework. This new model has enhanced the platform's governance by introducing mechanisms that have led to a higher frequency of referenda, an increase in Treasury activities, and a greater level of decentralization. This report will delve into the details of Polkadot’s governance, providing a comprehensive comparison between the original Gov V1 and the OpenGov model. It will also analyze the impact of these governance changes on the network.

Polkadot Governance V1

Overview

The initial governance framework of Polkadot, Governance V1, centered around three core bodies: the Council, the Technical Committee, and the Referendum Chamber. These groups collectively supported the network's finances, technology, and other miscellaneous developments. This structure facilitated a balanced approach to decision-making and operations, engaging various stakeholders in the governance process.

Stakeholders

The roles of Gov V1 stakeholders were as follows:

• Council: Composed of 13 members, the Council's responsibilities included managing proposals, canceling referenda, and electing the Technical Committee.
• Technical Committee: Formed by key Polkadot developers and selected by the Council, the Technical Committee was tasked with blocking harmful proposals and expediting necessary fixes and updates.
• Referendum Chamber: This chamber included all DOT token-holders engaged in the governance process by staking, endorsing, or delegating their tokens to gain voting rights.

Funding for the Polkadot ecosystem was managed through the Treasury in Gov V1. The Treasury accumulated resources from block rewards and transaction fees. Spending proposals required Council approval and a waiting period of 28 days.

Process

The Polkadot Gov V1 governance process was structured to engage token holders actively in the network's evolution. The process is outlined as follows:

1. Proposal Submission and Endorsement: Any party could initiate proposals. These were then queued and required endorsements to progress. The most supported proposal was moved forward for voting.
2. Referendum and Voting: The voting cycle alternated between public proposals and those put forward by the Council, incorporating emergency fast-tracks and token-boosted delegated voting.
3. Council and Treasury Involvement: The Council played a key role in managing Treasury funds, proposing, and evaluating proposals.
4. Adaptive Quorum Biasing: Voting thresholds were adjusted dynamically based on turnout and the source of proposals.
5. Proposal Enactment: Passed referenda, subject to a waiting period, alternated between public and council proposals.

Polkadot OpenGov

Overview

The Polkadot ecosystem rolled out OpenGov on June 15, 2023. This model places the community at the center of decision-making processes and eliminates any control from Parity Technologies and Web3 Foundation.

Referenda in the OpenGov system undergo a structured life cycle for enactment, including the Lead-in Period for proposal submission, the Decision Period for voting and approval, and the Enactment Period for execution. OpenGov allows multiple referenda to run concurrently, allowing for the faster passage of motions.

In the OpenGov framework, the traditional roles of the Council and Technical Committee have evolved into the Fellowship, which provides deep technical expertise without special voting powers. Functioning as a developer DAO, it champions decentralization through advocating community-based voting along with rigorous checks and balances. Membership to the Fellowship is open to all who qualify, marking a departure from the exclusive council system. This model also commits to paying developers for their contributions to Polkadot. Furthermore, it introduces a novel delegation mechanism, empowering users to allocate their voting power by conviction and token commitment.

Stakeholders

The OpenGov stakeholders’ roles are as follows:

• DOT Tokenholders: DOT tokenholders are at the heart of the OpenGov system and carry the primary responsibility for governance decisions. This includes voting on proposals, delegating voting rights, and actively participating in shaping the network's future. The direct democracy model empowers every tokenholder to have a say in the governance process, democratizing the decision-making and making the system more reflective of the community's collective will.
• Polkadot Technical Fellowship: As the new technical advisory body, the Fellowship plays a crucial role in guiding the technical direction of the Polkadot network. They are responsible for reviewing technical proposals and ensuring that changes and updates to the network are sound, secure, and aligned with Polkadot's long-term vision.

This evolution in governance roles under OpenGov illustrates a strategic move towards a more participatory and technically robust decision-making process, aligning closely with the ethos of decentralized and democratic blockchain governance.

Process

OpenGov introduces a nuanced and dynamic system for proposal submission, evaluation, and enactment:

1. Proposal Submission and Evaluation:

• Public Initiation: In OpenGov, all proposals originate from the public, emphasizing community-driven governance.
• Lead-in Period: After submission, proposals enter a lead-in period, a preparatory phase that ensures proposals are thoroughly considered before moving forward.
• Assignment to Tracks: Proposals are categorized into one of fifteen Tracks based on their nature and requirements, each with a distinct Origin determining the referendum's duration and voting capacity.
• Diverse Tracks for Varied Proposals: Tracks like Small Tipper or Big Spender categorize Treasury proposals by funding amount, ensuring appropriate handling.
• Expedited Processing: The Polkadot Technical Fellowship can fast-track proposals via a Whitelist Caller origin, streamlining the review and voting processes.

2. Voting and Approval Process:

• Simultaneous Voting Across Tracks: OpenGov permits concurrent voting on proposals across different tracks, adhering to capacity limits to ensure manageable decision-making.
• Multi-Role Delegations: Voters can delegate their voting power to experts in specific tracks, optimizing governance participation without requiring constant engagement from all tokenholders.

3. Mechanisms for Control and Correction:

• Cancellation and Blacklisting: OpenGov allows the community to cancel ongoing referenda or blacklist proposals, preventing them from re-entering the queue. This feature is essential for managing malicious or spam proposals.

4. Detailed Governance Stages:

• Creation and Lead-in: Proposals must satisfy origin-specific criteria, including a deposit to manage spam and capacity.
• Decision Period: Proposals advance to voting, where they must meet predefined approval and support criteria to pass.
• Enactment Period: Successful proposals undergo an enactment period before the changes are implemented, allowing the network to prepare for the transition.

5. Additional Governance Elements:

• Origin and Track Dynamics: Each proposal's path is determined by its Origin and Track, with specific parameters for decision-making and enactment tailored to its impact.
• Multiplier Feature: Tokenholders can amplify their voting power through token locking, with the conviction multiplier increasing based on the lock period.
• Approval and Support Mechanisms: Proposals require meeting approval and support thresholds within a confirmation period to progress, ensuring broad consensus for enactment.

6. Strategic Voting and Proposal Management:

• Approval and Support Thresholds: A sophisticated system evaluates proposal viability through approval and support metrics, adjusting to ensure proposals have substantial backing.
• Dynamic Confirmation Period: The confirmation period's flexibility allows for re-evaluating proposals based on shifting voter sentiment, maintaining governance integrity

Polkadot's OpenGov system introduces a governance model that balances community input, expert evaluation, and strategic decision-making. Through its stages, multi-tiered voting system, and mechanisms for correction and control, OpenGov empowers the Polkadot community to actively shape the network's evolution in a structured and effective manner.

Data

This data is sourced from the Parity Data Team’s DotLake platform, a data lake containing offchain and onchain data on the Polkadot ecosystem.

Following the transition to OpenGov, a significant increase in platform engagement has been observed. The average number of votes has risen by 1,981% compared to Gov V1. This trend extends to referenda, which have seen a 1,008% increase in participation after the transition. Notably, 40% of referenda under OpenGov were not approved, in contrast to a 9% rejection rate under Gov V1. This indicates a shift towards a wider range of voting behaviors and outcomes, suggesting that OpenGov fosters a more diverse and dynamic governance environment than its predecessor.

Since the introduction of OpenGov, the number of Treasury proposal submissions has significantly exceeded those made through Gov V1. Gov V1 recorded 83 proposals before OpenGov’s implementation, while OpenGov received 401 proposals (+405%). This transition resulted in an average monthly increase of 126% in proposals submitted to OpenGov, which now represents 80% of all treasury proposals. OpenGov proposals peaked in November 2023 with 92.

Between June 2023 and January 2024, the counts of direct and delegated voters in the Polkadot governance system were closely matched, with 66,602 direct voters and 65,508 delegated voters recorded. Initially, direct voting was the more popular method following the launch of OpenGov, but over time, the trend shifted towards an increasing preference for delegated voting. December 2023 experienced the highest voter turnout in the latter half of the year, which could be attributed to year-end voting activities. This trend towards delegated voting indicates a clear preference that is expected to maintain or increase governance participation over time.

Outflows from the Polkadot Treasury have seen a steady increase. The primary outflows are from bounties and proposals. Both bounties and proposals saw increases in the second half of 2023, with bounties increasing 18% and proposals increasing 116%.

Closing Summary

Polkadot's governance underwent a significant evolution with the transition to OpenGov in June 2023. The shift aimed to enhance community involvement through new mechanisms like replacing the Council and Technical Committee with the Fellowship and introducing a more dynamic proposal system. Thus far, OpenGov has accomplished its mission with referenda and votes each up over 1,000% through six months, treasury proposals up over 405%, and both direct and delegated voters increasing.

Overall, this new governance model has boosted platform engagement and governance participation. These changes underscore Polkadot's commitment to fostering a participatory and responsive ecosystem.

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