How to Participate in Governance: Deposits and Voting
The second in a series of blogs relating to the current state Regen Network governance
On-chain governance is a fairly simple concept whereby token holders vote on proposals which allow parameter and code changes to be accepted or rejected by the validators. If you’re a token holder that is new to governance, welcome, we are stoked to have you! Our intention is to provide you with clarity on the terms and processes associated with the realm of governance. We’re lucky to have Gavin who did an excellent job of explaining the different mechanisms of governance summarized in this blog post.
Step 1: Deposits
When a proposal is first submitted on-chain, users may notice that there is a deposit period pictured above. During the deposit period, the proposer or other token holders must deposit the minimum amount of REGEN tokens for the proposal to go live.
As mentioned in the previous blog post, the minimum proposal deposit is currently set at 200 REGEN and as mentioned above, anyone can pay for this deposit in full or it can be split up among multiple wallets. The deposit will be returned to the contributors once the governance proposal period is complete whether the proposal passes or fails to pass. However, in some conditions, a deposit could be subject to burning. Burning is the process of destroying the tokens so they can no longer be transferred or used in any other way.
Deposits are burned if:
- The deposit period expires before reaching the minimum deposit of 200 REGEN
- The proposal fails to reach quorum meaning 40% of all staked REGEN did not vote
- Proposals were vetoed meaning 33.4% of voting power backed the ‘no-with-veto’ option
Step 2: Determining whether a proposal passes or fails
In order for a proposal to pass it must follow the following criteria:
- A minimum deposit of 200 REGEN is required for the proposal to enter the voting period
- The deposit must be reached within 14 days
- A minimum of 40% of the networks voting power is required to participate to make the proposal valid
- A simple majority of 50% or greater of the participating voting power must back the ‘yes’ vote during the 14-day voting period
- Less than 33.4% of the participating voting power votes ‘no-with-veto’
The voting power is determined by stake-weight (the amount of tokens a user has staked) at the end of the 14-day voting period and is proportional to the number of total REGEN tokens participating in the vote. REGEN tokens must be staked in order for them to count in the voting process as liquid tokens are not counted toward a vote or quorum.
A validator’s active status is determined by their ranking and if a validator is in the top 50 of the validator set then they are considered to be active. Both active and inactive validators may cast votes, however, inactive validators voting power will not count towards the vote if they are not included in the active set when the voting period ends. For this reason, it is important to determine whether or not the validator you have delegated to is in the active set, because your stake-weight may not be counted towards the vote if they aren’t.
Lastly, it’s also very important to note the ‘no-with-veto’ option. Even though a simple majority of 50% or greater is required, the ‘no-with-veto’ allows a minority group representing 33.4% or 1/3rd of the voting power to fail a proposal that would otherwise pass. It is important to pay attention to the voting details on Keplr which allow you to view the percentage of vote types as a whole in order to gain a good understanding of whether a proposal will be vetoed and a deposit consequently burned.
We hope this post provided you with a better understanding of the deposit and voting periods along with the tallying of votes. In our next and final post of this series, we will be providing examples of the more technical aspects of constructing and submitting on-chain proposals.