EOS Community Constitution¹
The Community Constitution is a joint effort of members of the Chinese, Korean, European and North American EOS community.
Article 1 Applicability, definitions and transfers²
1.1 This constitution applies to EOS. and to all actions or lack thereof regarding EOS and all of its tokens and institutions. EOS means the public Mainnet blockchain system based on EOSIO software. Accessible through the chain_id-aca376f206b8fc25a6ed44dbdc66547c36c6c33e3a119ffbeaef943642f0e906
1.2 All EOS code must comply with this constitution³.
1.3 Any person that owns EOS tokens, or has an EOS Account, or transacts on this blockchain system is a party to this constitution. A person might be an individual or a legal entity. By using EOS one agrees to this constitution.
1.4 An EOS account is a combination of data used for identification to which combination EOS attributes inter alia rights, authorizations and (conditional) obligations.
1.5 An EOS account can be held by one or more persons. “To hold an account” means to control it.
1.6 An EOS account may be transferred provided that both the old and the new holder are a party to this constitution.
1.7 An EOS account may be held on behalf of a third person provided that such third person is a party to this constitution.
1.8 No third party can derive any rights from this constitution unless otherwise detailed.
1.9 Each party that offers services regarding EOS to other persons must ensure that the EOS account holder or the owner of the EOS tokens such party interacts with is or becomes a party to this constitution⁴.
1.Drafted in concert with the EOS Community. Based on an EOS Amsterdam draft. Author: Jetse Sprey.
2.Applicability: this constitution applies e.g. to the offering of EOS, to the quality of the block producers, to the good faith interaction between the parties. The parties are everyone with an account but also persons that do not hold EOS directly but are entitled to EOS on an exchange are a party and have certain rights. We have done this because it makes sense economically. It is similar to people and bank accounts. People legally don’t own their money in their bank account but have a claim on the bank to be paid that money to them if they wish so. Those people, nevertheless, are generally considered owners of the money in the bank. Therefore we treat people that have EOS on an exchange as owners too. If we don’t do that, they have no rights.
3.This is essential. If this isn’t put in here there might be confusion. People may start to develop code that works against the constitution. A block producer that accepts such code, may be forced to undo that.
4. Each party should make each person that interacts with EOS and that is not a party yet, a party. How this is done differs from jurisdiction to jurisdiction.
Article 2 Multi party contract
2.1 This constitution is a multi-party contract. It cannot be terminated. It ends only if and when no account holder of EOS is left.
Article 3 Freedom
3.1 All parties are free to use EOS as they please, providing they act in good faith, they do not infringe the rights of other parties, and they fully comply with this constitution⁵.
Article 4 Ownership
4.1 EOS blockchain belongs to no one.
4.2 EOS tokens have owners. “Owners” means account holders or the persons on behalf of whom an account holder holds the tokens.
4.3 No one shall, neither directly nor indirectly, own or control more than 10% of the EOS tokens⁶.
Article 5 Inflation
5.1 Block producers cannot set the inflation to be paid to them at a rate higher than 1% yearly without a referendum lite⁷.
5. This article defines a general principle: “we should behave as considerate businessmen”. Good faith is a general concept. In many jurisdictions it is included even if it is not mentioned in the contract itself. Good faith means you should think about the other party’s interest too. Of course you can make a profit and do pretty much as you please but all within the good faith limits. It says that e.g. lying in order to sell someone EOS is not a good faith transaction. If we wouldn’t put good faith in, it would be in anyway (in many jurisdictions).
6. We inserted that ownership should be limited to 10% of the issued tokens. This is obviously done to keep the blockchain public and decentralized.
7. Block producer may lower their inflation if they feel that would help EOS. If they want to set the inflation higher than 1% annually they need a referendum lite. This is done to protect the EOS owners and the community as a whole. The community should decide if a raise will lead to a right balance between the block producers’ needs and the token holders’ interests.
Article 6 Votes
6.1 Account holders of the EOS token shall have one vote per EOS Token. One vote can select up to 30 BPs.
6.2 No one shall neither directly nor indirectly control the casting of more than 1% of all the votes whether through ownership, agreement or orchestrated behaviour.
6.3 In the event an owner is not the account holder, the respective account holder will ensure that the owner shall be able to vote, whether by proxy or by software that allows the owner to cast the account holder’s votes. Such account holder shall not vote itself unless it acts as a proxy for the owner.
6.4 Votes cast by a proxy shall only be valid votes provided that:
6.4.1. The owners can freely choose such proxy; or
6.4.2 The owners can freely provide voting instructions to their proxy and are informed of that right when they enter into an agreement with that proxy and after that at least once every twelve months.
The proxy shall have to prove it complies with this paragraph if asked. The proxy shall publish its voting system in such a way that is easily found and accessible to the general public.
Article 7 Block producers
7.1 There are 21 active block producers. A minimum of 15 active block producers is needed to make changes to the EOS.IO source code⁸.
7.2 Block producers shall use commercially reasonable efforts to perform their block producing duties as detailed further in the block producer agreement.
7.3 Block producers shall not share control with other block producers, whether through ownership, agreement or orchestrated behaviour. Block producers shall publish a comprehensive schedule of their group and a list of ultimate beneficiaries with an interest of 10% or more⁹.
7.4 Block producers shall execute the code unless¹⁰:
7.4.1 An executable court order or arbitrator’s award indicates otherwise;
7.4.2 A block producer is or becomes aware of a clear infringement of the intent of code or of the rights of a party or of a third party or of a threat thereof, while there is no alternative remedy to halt or prevent such infringement. If in such event the block producer decides to take action against such, such block producer shall forthwith notify the other active block producers and the default ADR provider. The block producer shall also notify the victim to forthwith file a claim with the default ADR provider (ADR means: “alternative dispute resolution”). Any deviation from the execution of the code shall be temporarily and only in as far as is necessary to prevent the infringement from happening or continuing;
7.4.3 Article 7.5 applies.
7.5 A block producer must comply with an award provided by a default ADR provider as further detailed in article 12.
7.6 Block producers in their capacity of block producer are not liable for losses and damages unless those result from their intent or gross negligence¹¹.
8. Such changes to the core code will have to remain within the limits of this constitution, and its subordinate documents established by the community through a referendum lite.
9. We believe block producers should be independent. That will heighten trust in EOS. If we allow for collusion, the block chain might be considered a less safe environment, run be a couple of people that at the right time can take far reaching decisions solely in their own interest.
10. Block producers can decide independently whether or not they follow outside demands. Of course in principle the code must be executed. However, we believe if an outside court should subpoena a block producer to block an account, the choice whether or not to do that is up to the block producer. We don’t want to see block producers go out of business under outside pressure. However all measures other than those instructed by the default arbitrator should be temporary.
11. This is to protect the block producers.
Article 8 Liability of developers
8.1 Unless the parties to a development agreement agree otherwise, developers are not liable for losses and damages for the code they provide, unless those result from their intent or gross negligence.
Article 9 CDF¹²
9.1 Should the community decide so, there will be an EOS Commons Development Fund (“CDF”) The CDF shall operate fully independently. The CDF itself shall have sufficient funds wholly or partly to be paid out of inflation.
9.2 The CDF and its funding shall be established through a referendum lite.
Article 10 Intellectual property
10.1 All code paid for by the CDF shall be open source and free to use on EOS for all parties.
10.2 Regarding copyright and other intellectual property, the party that publishes code or other material on EOS, implicitly grants by doing so, to all parties the non-exclusive right to use such code or material on EOS, but only as intended¹³.
Article 11 Damages, liability and penalties
11.1 A party that is in default under this constitution shall be liable for damages and losses caused by such default in the event that:
11.1.1 such default is irreparable; or
11.1.2 in the event such default is repairable, only after receiving written notice in which the defaulting party has been given reasonable time to repair such default and fails to do so,
unless otherwise stipulated in this constitution or unless the occurrence of force majeure.
11.2 The ADR neutral may award penalties against any defaulting party that may range from fines to removal of regprod (in case of a block producer). The fines shall not exceed the total amount in EOS received by a defaulting party. The community shall establish a fine policy through the referendum lite. Lack of such fine policy will mean that the highest fine can only be the amount in EOS that the defaulting party received during the six months prior to the day the defaulting party was notified of its default¹⁴.
11.3 The ADR neutral may stipulate that the defaulting party shall pay all profits resulting from a default to the claimant and/or into a broad community benefit fund such as the EOS Commons Development Fund.
11.4 If a penalty becomes due, this shall not limit in any way a party’s right to demand full reimbursement of its damages and losses caused by a default.
12. This is to open the possibility to invest in dApps. Given the current discussions about WPS, we have made this optional.
13. This article says that if you publish a dApp, it can be used. It is implied of course but this article makes it explicit.
14. The ADR neutrals may issue a fine in the event of non compliance. However, this should be used wisely. It is up to the community to decide on a fine policy. It should also be possible to remove a bad block producer.
Article 12 Dispute resolution
12.1 Each dispute relating to EOS shall be resolved by the court or ADR provider that the parties to such dispute appoint or appointed¹⁵.
12.2 In the event no forum has been agreed by the parties, any dispute, controversy or claim arising under, out of or relating to this constitution and any subsequent amendments of this constitution and all of its subordinary agreements and arrangements, such as, without limitation, the block producer agreement and a, eventual, CDF system, including, without limitation, its formation, validity, binding effect, interpretation, performance, breach or termination, as well as non-contractual claims, shall be referred to and finally determined by ADR in accordance with the ADR-rules of the default ADR provider. In the event more ADR providers are selected, the competent default ADR provider shall be determined in accordance with the ADR system implemented by the community¹⁶.
12.3 The community shall determine an ADR system which allows for the participation of one or more ADR providers based on their registration with EOS and further on quality and procedural requirements detailed in article 12.7 and 12.8. The community may select one or more ADR providers directly as well. The ADR providers that are selected through this system are as of the day the community decides the “default ADR provider(s)” this constitution refers to. The ADR system shall be part of this constitution. Any appointment of a default ADR provider by the community shall be for at least 18 months unless the ADR provider is malfunctioning (e.g. when their decisions are regularly being overruled by outside courts or legal professionals state as much). A dismissal of an ADR provider is only possible if the community has appointed a replacement.
12.4 The community may decide to select multiple providers and proceedings in order to reflect the variation in cases. E.g. the community could decide to allow for cheap and simple proceedings regarding disputes that involve low amounts.
12.5 The community may decide to fund an ADR provider wholly or partly out of the CDF.
12.6 All community decisions in this article are to be established through a referendum lite.
12.7 The ADR neutral shall make its decision in all fairness without being bound to the strict rules of law. The ADR system shall ensure fair proceedings. The ADR system shall at least:
12.7.1 ensure strict independence of the ADR neutral(s);
12.7.2 ensure that there are sufficient ADR neutrals that shall have the necessary skills and are trained to understand EOS and the principles of due process and the arbitrator’s role;
12.7.3 charge fees that are reasonable taken into account the merits of the cases concerned;
12.7.4 allow for the parties to challenge the person of an ADR neutral if they believe such person is not independent;
12.7.5 provide reasonable periods to detail claims and defenses and further documentation;
12.7.6 allow for a hearing through electronic means or, in the event both parties shall wish so: for one where both parties are physically present;
12.7.7 forbid one party to interact in any way with the ADR neutral(s) without the other party present or, in the event of written interaction, simultaneously informed;
12.7.8 provide the reasoning behind the award;
12.7.9 allow the parties to choose the language provided such choice is limited to the major languages;
12.7.10 the community may introduce the possibility for wholly or partial appeal;
12.7.11 allow for preliminary and emergency measures;
12.7.12 publish summary anonymized information on the disputes.
12.8 A decision may contain, without limitation, monetary compensation (whether in fiat or in EOS), the fines and penalties of Article 11.2, measures to prevent a threatening default enforced through penalties in the event of non-compliance, penalties in the event a default is not corrected (to avoid misunderstanding: in these cases the amounts of the penalties are not limited as set out in article 11.2), restoring a party’s access to an account such party can prove to be the rightful owner (provided no good faith third party rights will be infringed) and all other measures, including payments, the arbitrator shall deem fit.
12.9 No party to this constitution shall be obliged to comply with an ADR neutral’s decision unless it has been provided or confirmed by (one of) the default ADR providers¹⁷.
12.10 In the event of a non-default ADR neutral’s decision, each party to the dispute is entitled to have the competent default ADR provider confirm such decision. In the event the default ADR provider’s proceedings confirm such decision, such decision shall be deemed to be decision from a ADR provider. The default ADR provider’s decision shall only refuse confirmation in the following events:
12.10.1 Material non observance of due process and/or the rule of law;
12.10.2 Apparent and clear misjudgements of the facts;
12.10.3 Incomprehensible decision;
12.10.4 Apparent mistakes.
12.11 An ADR system may introduce mandatory mediation for eligible cases¹⁸.
15. Like with any other agreement, the parties could also decide to let their dispute be resolved by any ADR provider they jointly pick.
16. This constitution defines rights and obligations that must be honored. We choose for ADR. Without this choice, the local courts will deal with the disputes.That seems not ideal. We believe ADR providers, especially specialized ones, can deal with all disputes adequately and fair. A dispute may range from alleged colluding, to a claim for damages in the event EOS are being stolen, or to a claim to unreg a defaulting block producer. Block producers will have to execute the arbitrator’s award. If they refuse, the original claimant will have to commence ADR against the refusing block producer. If the block producer loses that case and still doesn’t comply with the award, the claimant will have to commence proceedings with the competent court in the country where the block producer is based. The verdict issued by such court (which should be a more or less simple administrative procedure), can be issued as any other verdict.There are many safeguards in this route and we feel that is important.
There are simple cases that even may largely be automated. E.g. lost keys. We believe arbitration in these simple cases is not the ideal solution. As an interim this constitution has the Oath Protocol for lost and stolen keys. Please note that these decisions cannot, under the EU regulation called GDPR, be fully automated. There has to be the possibility to have a human eye review a fully automated case. That is an important right European citizens have.
The lost and stole and stolen keys will probably best be dealt with technically. New software and identity management systems will probably make these issues go away or marginalize them. As long as there are no such effective mechanismes, we need ADR to solve them.
17. We envisage a system with more providers that are default and that may be selected by the parties and/or that rule over different types of cases. All parties are entitled to pick another arbitration provider than one of the default ADR providers. The parties themselves are in principle bound to that decision. However to ensure the quality of the ADR neutrals, one has to pass through an ADR neutral in order to execute an award. The ADR neutral will just check if the proceedings are followed correctly.
18. We would encourage mediation since it is often a good and fast way to end a dispute. The parties themselves resolve their disputes and that’s why its results are often longer lasting.
Article 13 Community referenda¹⁹
13.1 This constitution may only be changed, amended, or repealed by an ordinary referendum. A valid decision requires:
13.1.1 A vote of the token holders with no less than 10% of all EOS tokens must be staked and voting; and
13.1.2 No fewer than 10% more Yes than No votes for 30 days continuously; and
13.1.3 Both requirements to be met within 120 days of the day voting starts.
13.2 Within the limits this constitution sets out, the community shall determine all other agreements and other documents that result in obligations for the parties through a referendum lite. Such agreements including, without limitation, establishing the default ADR provider, further detail the referendum lite, establishing the EOS Commons Development Fund and the block producers agreement.
13.3 A referendum lite is how the community decides in certain cases. It is a vote of the token holders following community input as follows:
13.3.1 Proposals may be submitted by any party at any time provided such party proves it has support for that proposal of at least 1 million tokens;
13.3.2 If the proposal effects the EOS code, the code to effectuate such changes must be submitted too. No code may be submitted without a full description of its functionality and intent;
13.3.3 Voting will start fourteen days after the proposal is submitted;
13.3.4 The community needs to be informed of the referendum lite and the day voting starts;
13.3.5 There will be an initial voting period of thirty days;
13.3.6 Decisions require a simple majority of the votes cast for a period of fourteen days following the initial voting period within 90 days of the start of the voting;
13.3.7 A decision requires that at least three percent of the total tokens issued cast their votes;
13.3.8 A token allows for one vote for one proposal;
13.3.9 Further details of the voting process may be detailed through a referendum lite.
13.4 In the event two or more decisions regarding the same issue are up for voting, regardless which type of referendum, the decision made will be the one that after all voting ends, has the most votes.
13.5 The date of effect for a constitutional amendment or replacement shall be the date that following 13.1, that is, the day after 30 days in which no fewer than 10% more Yes than No votes for 30 days continuously with no less than 15% of EOS tokens staked and voting. The date of effect for a referendum lite shall be the day following a simple majority held for 14 days with at least 1 million tokens voted in total.
13.6 New subordinate agreements and changes cannot have retroactive effect.
Article 14 Further rules and protocols
14.1 The community may provide further rules,protocols, code and subsidiary agreements such as the block producers agreement through the referendum lite. Said rules, protocols,code and subsidiary agreements must be fully in accordance with this constitution.
Article 15 Applicable law
15.1 As far as that is possible, this constitution supersedes all national laws²⁰.
15.2 Should a law have mandatory provisions that hinder the execution of this constitution, the parties shall, if and to the extent possible;
15.2.1 Choose a law that does not do so, or, to the extent that is not possible
15.2.2 Amend this constitution in a way that comes closest to its meaning within such mandatory provisions;
notwithstanding the arbitrator’s assignment to rule in all fairness without being bound to the strict rules of law.
Article 16 Transition article
16.1 This constitution replaces the interim constitution as of the date it is being elected by the community unless the referendum system details otherwise²¹.
16.2 Until further rules are provided in accordance with this constitution, all rules that are in effect remain so in as far they are in conformity with this constitution. Any rights and obligations that originate before this constitution comes into force, are respected²².
16.3 In the event of “lost keys and stolen keys” (“stolen” referring to theft, hacking or other criminal activity that results in the loss of a private key), the default ADR provider shall be the Oath Protocol (https://oaths.io/en/) until the community through referendum lite shall decide otherwise. Each decision made in accordance with the rules of the Oath Protocol shall be executed by the parties.If the number of EOS concerned is more than 10,000 EOS, the decision made in accordance with the Oath Protocol may be subject to review through WIPO Expedited Arbitration. Such an appeal must be initiated within 30 days of the decision.
16.4 For all other disputes, the WIPO Arbitration and Mediation Center (www.wipo.int/amc)²³, shall be the default ADR providers until the community through referendum lite shall decide otherwise. Such arbitration shall be conducted and finally determined in accordance with the WIPO Expedited Arbitration Rules.
19. It is our fundamental choice to give EOS as much as possible to the community. We defined a system for the community to decide. That is called “referendum lite”. That is a fast track referendum that has a lower threshold and doesn’t require a large difference between yes and no’s. This systems allows for a fully democratic chain. Within the boundaries set by this constitution. The community must also be working on further developing the governance, the block producers’ agreement and other subordinate documents. We (as a community) are at the helm. The decisions regarding those documents and make them binding for all EOS parties will need a referendum lite. However, of course, all referendum lite documents should be within the limits of this constitution to be valid. Whether or not this is the case, will, if a document is challenged, have to be ultimately decided by the default arbitrator.
20. National laws will apply to this constitution. The stipulations herein will supersede those laws generally speaking. However, national laws may have mandatory provisions one cannot deviate from. For now, we are not familiar with specific rules of a specific country that might interfere with this constitution but we have no in depth knowledge (and often even no knowledge at all) of all the legal systems.
21. The community could stipulate that it starts on a certain date.
22. This is to ensure that the rules already in place remain so until replaced. Otherwise there would be a vacuum. If one or more existing rules conflict with this constitution they are automatically replaced by the corresponding rules of this constitution. As for running ECAF cases: contractually we are obliged to let ECAF finish those. As is any other party. We suggest of course that ECAF will work closely with the default ADR provider.
23. The WIPO Arbitration and Mediation Center (WIPO Center) was established in 1994 and forms part of the World Intellectual Property Organization (WIPO) in Geneva, Switzerland. Its purpose is to offer arbitration, mediation and expert determination services for the resolution of commercial disputes between private parties involving IP and technology. The Center is international, independent and neutral, and is supported by external experts in international dispute resolution and intellectual property. See https://www.wipo.int/amc
