Announcing Polis: Micro-governments with Electus
When I tell people that I am working on a governance protocol, they immediately think that I am building something for governments. However, this is not true. The way we understand governments today is as some sort of big daddy watching over us, telling us what to do, and how to live. Most of us understand national governments, state governments, and probably even city level governments. Note how our notion of governments has to do with large organizations with so many people. It is uncommon to think of a government of say 50 people. However the very beginning of governance did not happen with millions of people. In fact, governments have grown over time. As human societies have scaled, the amount of responsibilities that governments have been taking up has only increased. It has increased to such a point, that it is no longer feasible for smaller governments to carry out all the necessary tasks. As a result, it made lesser and lesser sense for micro governments to exist, because the cost of maintaining several parallel governments with overlapping tasks is too high, and an unnecessary one. For instance, every city having its own army would result in too much unnecessary expenditure, and hence the federal government maintains one army, and each city pays taxes upward.
As a result of living in a world with governments spanning across hundreds of thousands of people to billions of people, we no longer think of smaller units as ‘governments’. Consider a university. There are power structures within faculty, and within students. They carry out politics, practice law-making at their own level, and at times even take part in referendums. Consider a non profit charity organization, what if they allowed donors to govern how their funds are used? For that matter, consider a charity-aggregator which gives out money to certain registered charities who demonstrate more action over time, governed by donors. In fact, let us look into our own backyard for a moment. Consider a cryptocurrency dev team that raised an ICO and wishes to cultivate a developer environment around its platform. Could there not be a micro-government of people that makes decisions on issues like what software is needed more urgently, or how much should be spent on the projects, or which vendor/dev team to select for which project-based on an MVP or PoC? Such a system does not exist for a single cryptocurrency as of today. Why not? Why do we not think of setting up ‘governments’ in this fashion, where we only need some people to come together, and agree to make decisions collectively?
In this article, I hope to describe the next product we will begin working on: a standard micro-government implementation on the blockchain, Polis.
Membership:
First thing that a micro-government must allow for is membership. If there are no members, there is no governance. Members are essentially individuals who agree to trade some part of their autonomy(by agreeing to be governed) in exchange for the right to govern. This transaction of autonomy could be executed by holding a certain amount of coins — since they are holders of the coin, decisions around the coin affect them; or they enrolled in some university — so decisions of the university affect them.
The Electus protocol(EIP 1261) is an on chain smart contract standard that allows a system administrator to add or remove members from an organization. There are more details on this here. While the system administrator controls who is allowed to be a member and who is not, this is always the case in any form of government — in fact, on the blockchain it is possible to at least maintain a tamper proof activity log of the admin. While the membership activity is transparent to anyone who can access the blockchain, it also keeps the participants identity a secret, because the on chain membership reveals nothing about a public address other than the fact that it is a member address of a given organization.
Categorization:
Another thing that a government should permit is the categorization of its members. A government where all members are just members, is far less useful than a government where some people are doctors, some people are legal experts, some people are computer programmers and so on. Direct governance puts back power in the hands of the people, but people should be able to collectively allow the health experts to make the health decisions and the ethics experts write criminal law, and engineers decide construction budgets. For this to happen, Polis must allow for on-chain micro-governments to further categorize its members into subgroups, based on their role in the given community. This is done by using a separate ERC-1261 smart contract for each subcategory. Subcategory contracts will be slightly different from the government contract in the sense that it can only contain members who already belong to the superset contract(the government). Certain subcategory contracts will be made in groups, where there are a number of subcategories that are mutually exclusive(you may belong to only one) and exhaustive(you must belong to one if you are part of the government). One example of an Exclusive Exhaustive(EE) subcategory is region. You must belong to a region, and you can belong to only one region. An example of a Non Exclusive Non Exhaustive(NENE) subcategory is individuals with a college degree. You may or may not belong to this set. NENE subcategories can also serve as subscription indicators, or subsidy benefactor indicators. These are just examples to illustrate the potential of categorizing individuals in a government.

Consensus:
The purpose of building such a government framework is to ensure that each member is able to participate in the decision making process. The Electus Protocol(EIP 1261) issues membership tokens to individuals that decide to join the government. As a result, we can deploy polls which only allow members to vote. At the moment, we are standardizing these polls to be modular so that they can be used flexibly. Polls are separate smart contracts that inherit the government contract, or sub category contracts, or a combination of all membership contracts that create the voterbase for a poll. A voter base could be a single membership contract, but also could be a logical combination of more than one — “All members of Govt X who are not doctors, but belong to subregion ABCD” is a valid voterbase, and polls will be modular enough to allow a user to code in their voterbase. A poll will also have a weight policy. A weight policy is the code which tells the poll how much each persons vote is worth. It could be a one person one vote system, or a coin proportional voting system, or a reputation based voting system, or one of many possible voting systems. We are standardizing some common weight policies so that micro-governments can deploy these easily. A poll will also have a result vector(which proposal has how much vote) and a voter count(how many people voting for which proposal) in the end, so that the poll results can be accessed by another smart contract, or by an off chain database. We are also working on a website — www.pollscan.io. It is not deployed yet, but the intention is to have a place where anyone can audit the results, and the activity log of any given standard poll contract, in order to ensure transparency.

Treasury Management:
A government is not simply a consensus gathering group. Sure, one can use a government for that, but it is not enough. A government carries out collective projects which cost money. Most governance systems do this behind curtains. The opacity in treasury management is the birthplace of corruption. Polis intends to create a treasury management system(TMS) which is transparent and actionable. It draws inspiration from the functioning of Vault. TMS functions with the help of the following participants:
1. The Treasurer: This is a person in power, who possesses all the funds of the treasury in question.
2. Contractors: Contractors are goods/service providers who agree to provide some service or good in exchange for a fee. The funds in the treasury are to be used for paying the contractor.
3. Members: Members are participants in the TMS who can choose to veto a contractor due to negligence or irrelevance or deficiency of service.
Here is the sequence in which a TMS ideally will work:
1. The treasurer has conducted polls to zero in on a specific contractor for a certain task at a certain price.
2. A total amount is decided, along with a burn rate, and the total amount is kept in a smart contract vault, and the vault releases funds to the contractor at the burn rate.
3. If members notice embezzlement, corruption, or negligence, they can vote for a refund of the smart contract, after which the remaining funds(unspent) are sent back to the treasury.
This system is a modification of the Vault, suitably adapted for managing a governed treasury.

The 4 facets above enable the creation of micro governments. It is one of the things we will start working on as soon as DAICO Vaults are ready.
