Approaches to Governance: How Figment Votes in On-Chain Token Voting Systems

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Figment participates in on-chain governance through voting and sharing our votes with the community.  Our goals are to build a better and more decentralized internet where individuals have control rather than large data monopolies and governments. This means participating in governance and actively encouraging other validators to do the same. 

We are currently in an era of decentralized governance where one token is the equivalent of having one vote. As a large validator, we take the responsibility of voting seriously and aim to vote on proposals that match our overall strategy and vision for the future of Web 3. 

When Figment engages in research or governance activities in the space, we’re thinking about growing participation at every step. Participation in governance from validators, token holders, and community members is a sign that a network is organized and run by a community of stakeholders, not just the founding team. The ultimate goal of governance processes is to align all stakeholders behind the project and continually improve the project to remain adaptable, relevant, and sustainable.

This includes what good governance practices mean to us. (Find more background into how we think about governance here.)

Most networks have some form of governance through off-chain methods like Ethereum’s. Twenty-five networks that Figment stakes with have on-chain governance where having one token is equal to having one vote. Because one token is one vote on these networks, it’s vital that we participate and engage with the community to ensure the network is going in the right direction. 

How We Vote

There are three types of proposals: Community Spend Proposals, Upgrades and Parameter Changes, and Economics Changes.

In each proposal, we look for key indicators that signal a robust proposal. We look for the following information in each proposal. We will look for more information if it doesn’t have this information. If the information is absent, we will vote no or ignore the proposal:

Upgrades and Parameter Changes:

  • Block height or time this will be enacted.
  • Key changes or a link to the changes in the protocol. 

We address the following questions:

  • How does this proposal likely affect the protocol overall?
  • Are there any things that the proposal purports to do that seem unlikely?
  • How will this likely affect stakers?
  • How will this affect our staking operations? Could it affect DataHub?
  • Is there legitimate criticism in the community, and has it been adequately addressed?

Community Spend Proposals

  • Who is requesting funding?
  • Proposal writers must have a detailed outline of their funding plans, including metrics for success.
  • How the funds will be used.
  • What are the product commitments or milestones for the project?  

We address the following questions:

  • What value does this project bring to the network?
  • What additional context is needed to understand this project?

Economic Changes

Economic proposals come in different forms, so we target questions rather than have set information in each proposal.

We address the following questions:

  • How does this proposal likely affect the protocol overall?
  • Are there any things that the proposal purports to do that seem unlikely?
  • How will this likely affect stakers?
  • How will staking incentives change?
  • What are the consequences? i.e., change in the token or inflation?
  • What other context is needed to understand this proposal?

Who Votes

Our protocol analysts involved with the community know when votes happen on-chain and are responsible for sleuthing out the answers to the questions above. They have context from both the community and Figment to recommend a decision. Individuals are considered the authority. 

If there is a debate amongst other team members about voting, there is an internal discussion of the merits. We are often contacted by core team members who ask us to vote (but don’t recommend a certain way) and community members who attempt to persuade us to vote in the direction they favor. Ultimately, we vote with the best interest of the network in mind.

Votes happen on-chain, and as such, they require us to sign in to our accounts. Security remains a top priority throughout the voting process.

Recently, the Vega upgrade from Cosmos included a new feature to grant arbitrary privileges from one account to another. We will be looking into this solution to allow other analysts to vote on proposals.

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