Introduction to #5 Basic Constitution Proposal
On 8 November 2023, a Q Constitution Proposal was submitted on-chain as #5 Basic Constitution Proposal. Voting on the proposal is possible until 6 December 2023.
In this blog post, I will provide an overview of the proposed changes, some background to the constitution update process of the Q Protocol in general, as well as some background of this current constitution proposal.
I encourage all Q token holders to familiarize themselves with the proposed changes and — of course vote on the proposal!
Content of the Constitution Proposal
This set of proposed changes focuses on the Decentralised Finance part of the Q ecosystem.
First, the community identified areas where the description of the Saving and Borrowing integrated application lacked clarity. Therefore, changes are proposed with respect to the definition of the following parameters and elements:
- Collateral Liquidation Auctions;
- System Surplus and System Debt;
- Surplus Auctions, and System Debt Auctions.
Further, definitions of key parameters were amended, providing guidance as to how parameters are to be set by the DeFi Expert Panel. The amended parameters include:
- Eligible collateral;
- Oracle selection;
- Collateralisation and liquidation ratios;
- Collateral ceiling;
- Liquidation fees.
The proposed changes effectively introduce a definition of the scope of discretion for the DeFi Expert Panel. If accepted, the changes would not only provide guidance to the DeFi Expert Panel, but also provide more clarity to users of the Q DeFi system as to how key parameters are determined.
Second, the term “Q stablecoin” replaces the term “QUSD” in anticipation of the potential launch of stablecoins not linked to USD such as QEUR.
Also, the proposed changes include non-DeFi elements. These changes amount largely to clarifications, including tidying up of typos, without introducing material changes to the Q Protocol. These changes include:
- clarification of Layer 0 voting processes;
- clarification of the difference between public keys and Q addresses;
- addition of an explicit obligation for Root Nodes to implement contract upgrade proposals;
- addition of a provision describing the intention for the Root Node panel; and
- creation of tiered slashing eligibility periods.
To read about these changes in detail, check out the explainer notes provided at this link:
Background: Constitution Upgrade Process in Q
The Q Constitution sets out the basic rules governing the operations of Q. This includes how users participate, use, interact, or contribute to Q. Any person holding Q tokens may exercise their governance rights as outlined in Appendix 5 of the Constitution to propose changes to the Constitution, and by extension, the Q Protocol as well.
Once the proposal has been submitted on-chain, other Q Token Holders may vote on such a proposal. If, at the conclusion of the voting period, this proposal meets the required quorum and majority, it moves on to the veto period. Root Nodes then verify that the correct voting process was followed according to the Constitution. If the Root Nodes are satisfied, the proposal moves successfully past this veto period, after which the Root Nodes manually execute this proposal so that it is technically implemented on-chain.
There are four different types of changes:
- Constitutional changes mainly fall under four categories differentiated by how substantive such a change is to the principles and operations of the Q Protocol. As such, the required quorum and majority for each type of change has a direct relationship with its impact to the Q Protocol. The four categories are the following: Fundamental Changes, Basic Changes, Detailed Changes, and Non-Constitutional Changes.
- Fundamental Changes refer to textual changes to the Preamble or Article 1, 2, or 3, as well as to any of the definitions or parameters which are key to one’s understanding of the meaning of the Preamble and Articles 1, 2, and 3.
- Basic Changes are any changes to the text of Articles 4 through 13 as well as to any of the definitions or parameters which are important to one’s understanding of the meaning of these Articles. These changes generally touch upon the following topics: Validator Nodes, Root Nodes, Slashing, stake withdrawal, Expert Panels, Q ID, integrated applications, and dispute resolution.
- Detailed Changes are a catch-all category for any textual changes to the Constitution that are not included in the two categories above. Non-Constitutional Changes are changes which affect the functional logic of the Q Protocol as stated in the Q Constitution which may not be reflected textually in any of the above three categories.
Some context to #5 Basic Constitution Proposal
In April of this year, #2 Fundamental Constitution Proposal was submitted on-chain (https://hq.q.org/governance/proposal/constitutionVoting/2). That proposal failed due to high required quorum and high concentration of different substantive changes.
Due to the fundamental nature of this proposal, a 50% quorum was required, and since the number of Q tokens in circulation was insufficient to meet the quorum, the Q International Foundation would have had to submit a vote in order to meet this high quorum. However, the Foundation chose to abstain from voting and listed a number of reasons including the high concentration of substantively different changes into one vote.
In response to feedback from the Q International Foundation, a Basic Constitution Proposal was created to include the first set of changes from #2 Fundamental Constitution Proposal. This was shared with the community on Discord and Reddit on August 10. The community gave feedback on this proposal.
Following the incorporation of community feedback, the final version of this Basic Constitution Proposal was submitted on-chain on November 8 as #5 Basic Constitution Proposal.
In case of any questions around this proposal or the voting process in Q in general, please feel free to get in touch with me directly or reach out to other members of the Q Community on Discord, Telegram, Twitter, Reddit or another channel or your choice.
