Social Kapital Gridlock

If you follow American politics, you will notice that the word gridlock is used quite often. In American politics, gridlock frequently refers to occasions when the United States House of Representatives and the United States Senate are controlled by different parties. Frequently, when one chamber votes to pass a law, the other chamber votes to block passage of the law. The result is gridlock. Gridlock is resolved through negotiation or the eventual control of both houses by the same party.

The Social Kapital voting protocol works just about the same way. For a vote to pass, three distinct conditions must be met.

(1) The number of shares voted must pass a quorum threshold. Most contract defaults are set at 51% of the total shares (FLORIN) in circulation. This number can be adjusted through a vote by shareholders.

(2) The number of YES share votes must pass a threshold. Again most contract defaults are set at 51%. Thus 51% of all the shares voted during the voting event must be YES, for the vote to pass.

(3) The number of yes voters must pass a threshold. The default for most contracts is set at 51%. Thus, 51% of all the voters that voted during the voting event must have voted YES, for the vote to pass.

For a vote to pass, there has to be a quorum of shareholders, majority of the shares been voted must back the proposal and majority of those voting must also back the proposal. If any of these conditions is not met, the vote fails. What this means is that big shareholding blocks cannot force proposals through and small shareholding blocks that have voting number cannot force proposals through either. The proposal has to work for the different interest groups to pass. It also means that the much talked about 51% attack is not possible.

Although the provisional default settings is 51% for all the three variables in Social Kapital contracts, shareholders can vote to tighten or loosen the value for each variable. However, there is a minimum value of 20% and a maximum value of 90% to prevent technical lockouts.

Because all opinions are important at Social Kapital, shareholders can vote YES, NO or ABSTAIN. Just to make it clear, abstain is provided as a voting choice and counted as a vote.

Sirus Knight is the Co-Founder of Social Kapital