Fast Fairy Series: Private Governance

In the second installment of the Fast Fairy Series, we delve into “private governance”, an application made possible by Fairblock infrastructure. This application is generously supported by Atom Accelerator DAO and will provide value to Cosmos Hub, other Cosmos L1s, and DAOs.

Before reading this article, we highly suggest reading our previous article on the architecture of FairyRing here.

TL;DR:

Public visibility of votes in decentralized governance systems can lead to manipulation and inefficiency. Fairblock aims to enable encrypted voting for governance proposals, offering flexibility between mandatory or optional encryption. This approach enhances privacy, prevents voting manipulation, and ensures accurate results while maintaining a seamless user experience.

Problem: Voting and governance mechanisms have been one the most promising applications of decentralized technology. While the on-chain transparency and decentralization of such systems can prevent many forms of corruption and censorship, the fact that all of the votes are publicly available before the inclusion of the vote in the block, before the proposal deadline, and after the finalization of results is not an ideal property in some scenarios and can lead into manipulation, censorship, and less efficiency for the proposal.

Some examples of these scenarios include:

• Validators censoring certain parties from voting.
• Parties with large voting power can actively observe and affect the direction of a vote.
• Voters on the winning side will not engage, since they think they are already winning, or voters on the losing side may experience apathy and don’t vote, so the actual results and the difference may not accurately reflect reality.
• Voters may not do their own research and may be biased e.g. toward the majority’s decision.
• Voters may be susceptible to external incentives or negative social pressures due to the visibility of their votes.

Goal: For some scenarios and applications, protected votes are necessary for a healthy governance/voting mechanism leading to fairer outcomes and greater efficiency. Our goal is to provide the option for governance proposals to have encrypted votes. Encryption can be mandatory for all votes or purely optional in a hybrid voting system that accepts both encrypted and plaintext votes. The user experience will be the same as regular voting. That is the sending of encrypted votes will be done in the background. In some scenarios, the best practice is decrypting all votes right after the deadline for transparency; however, in some other scenarios, it makes more sense to keep votes encrypted even after the deadline while computing the final results privately.

At Fairblock, we believe that voters and protocols should have the freedom and flexibility to choose which voting mechanism they need. We are building the necessary infrastructure and a user experience that is familiar to users. A sample of the UX can be seen in the figures below:

This solution has the following properties:

1. Privacy preserving

2. Unexposed voting power

3. Impossible to tally before the voting period ends

4. Only valid votes are tallied

5. Fully decentralized

6. Voters can choose to abstain from voting

7. Autonomous process (votes are tallied automatically once the voting period ends)

8. Users have the option to vote privately or publicly

9. Double voting is impossible. (Voters can submit their vote multiple times, but only the last instance is accepted)

Voting Lifecycle:

The voting lifecycle is heavily inspired by our existing architecture and design. For more details about the cryptography, user flow, and system architecture, please take another look at our previous article. We can summarize the voting lifecycle as follows:

a. A governance proposal is initiated and a proposal ID is generated. This ID is used to derive the encryption key which is used for encrypting user votes.

b. Users encrypt their votes using the key from (a). The encryption process occurs only on the user side (whether it is via a front-end, browser wallet, or CLI). The encrypted vote is sent to the destination chain (Cosmos Hub), not FairyRing.

c. The encrypted vote transaction is committed on-chain by the validators on the destination chain.

d. Once the voting period has passed, validators on FairyRing will submit private key shares. An honest majority of these shares will be used to obtain a decryption key for the specific proposal ID. This key will be relayed to the destination chain that initiated the governance proposal.

e. The key will be used to decrypt the votes. Once decrypted, the votes are tallied and the results of the governance proposal will be finalized.

Thank you for reading our second article in the Fast Fairy Series. In our next articles, we will cover Fairblock’s future path for other ecosystems (modular ecosystem, rollups, and Ethereum), and more details about other applications that we can enable on top of our infrastructure.

Please send us a message on Twitter or send an email, especially if you are interested in learning more about Fairblock, building with us, and brainstorming new ideas. Thanks!!