Decentralized Governance Overview
To achieve the decentralization, your participation matters. No matter you would like to participate by proposing your brilliant idea to improve the Function X Ecosystem or you vote for a proposal, you can do it through the mechanism of governance voting.
The mechanism of governance voting is now LIVE on https://explorer.functionx.io for the desktop users. Click “proposal” and you can connect your f(x)wallet to create a proposal. Currently, there are 4 types of proposals available for the community to create:
More proposal types will be available later.
In the previous Hash Out article, we have detailed how you can propose / vote for a proposal. Here we made a flow chart so that you can easily understand how it works.
Deposit is designed to prevent spam.
In order to initiate the governance voting, all proposals are required to have a minimum amount of FX Coin deposit, that is, the deposit threshold. Initially, the threshold is set to be 10,000 FX. This parameter can be changed via governance voting.
To submit a proposal, it requires an initial deposit of at least 1,000 FX Coins. The Initial Deposit will be counted as part of the entire deposit of initiating the governance voting. If the Initial Deposit reaches the threshold, the voting will open immediately.
The proposal owners are not required to deposit the full amount on their own. Once submitted successfully, the proposal will enter the Deposit Period where other FX Coin holders can increase the proposal’s deposits by sending a Deposit transaction.
When a proposal gets approved after the voting period, each deposit will be automatically returned to its respective depositor.
Please note that there are situations that result in the burn of the deposit.
If a proposal doesn’t pass the deposit threshold before the deadline of the Deposit Period, the proposal will expire and will be removed from the proposal list. Consequently, the deposit will be burned.
Regarding the burn of the proposal’s deposits, please see Deposit Burn below.
Initially, both the Deposit Period and Voting Period are set to last for 14 days. The parameter of period duration can be changed via governance voting.
Quorum is defined as the minimum percentage of voting power that needs to be cast on a proposal for the result to be valid.
The amount of voting power is measured in terms of stake. Hence, a voter has to be either a Delegator or a Validator on f(x)Core. To get the right to vote on a proposal, users need to have FX Coins bonded to an active Validator and/or become an active Validator before the proposal enters the voting period.
The value of Quorum is set at 40%. Quorum is calculated as:
Voters’ bonded FXTotal bonded FX on FxCore x 100%
If a proposal fails to reach the Quorum at the end of the Voting Period, the proposal will be marked as “Rejected”, and its deposit will be burned.
Also, the number of FX a voter or their validators hold determines how much influence their votes will have on the outcome of a proposal (see Voting Results).
A qualified FX holder will have the right to vote on a proposal if
- the person is a Delegator to (at least) one active Validator on f(x)Core before the proposal entered the Voting Period.
- the person has been an active Validator on f(x)Core before the proposal entered the Voting period.
Hence, a voter has to be a Delegator or an active Validator.
Unbonded FX holders and other users do not have the right to participate in governance. However, they can submit and deposit on proposals.
Participants cast their vote by selecting from the option set that consists of 4 options:
“NoWithVeto” counts as “No” but also adds a Veto vote.
“Abstain” option allows voters to signal that they do not intend to vote in favor or against the proposal but accept the result of the vote.
If a delegator does not vote, it will inherit its validator vote, except:
- If the delegator votes before its validator, it will not inherit from the validator’s vote.
- If the delegator votes after its validator, it will override its validator vote with its own.
The voting result determines by the combination of following 3 conditions:
- Quorum is reached (or not)
- More than 50% or a majority of FX Coins that participated in the vote (not counting “Abstain” votes) must have voted “Yes”
- Less than 33.4% of FX Coins that participated in the vote (not counting “Abstain” votes) have vetoed the decision “NoWithVeto)”.
We commit to empowering the community to participate and grow Function X through decentralized governance. This is just the beginning and we will keep improving this tool to make it better.
If you are interested in sharing your ideas and participating in building the Function X ecosystem to make it better, join our official Function X Forum.