What Is a Liquid Decentralized Meritocracy?
Governance is a fundamental concept within social behavior among humans and has reached a new spectacle with the advent of public blockchain networks. Decentralized networks that produce value present entirely new challenges and potential, which has surfaced some age-old debates on governance coupled with some intelligent technical developments.
To better understand Suterusu’s Liquid Decentralized Meritocracy design, it is best first to put blockchain governance into context.
Primarily, the governance debate can be painted with broad strokes as confined to trust-minimized “rough consensus/off-chain” models, and the more novel, on-chain governance approach.
Like all innovations, specially one as complex as with governance, there are significant hurdles that need to be overcome. Precisely honing in on the on-chain governance developments, we can identify three primary obstacles:
- How to increase the voter turnout rate while keeping the system decentralized?
- How to keep a balance between the number of votes and the professionalism of decision-making?
- How to bootstrap the community and introduce the governance structure?
Public blockchains with on-chain governance are highly participatory and flexible designs for organizational management. With a Liquid Decentralized Meritocracy, many of the problems handcuffing on-chain governance models can be removed — effectively making a universal, inclusive, and adaptable governance framework.
Defining Liquid Decentralized Meritocracy
Relying on Suterusu’s QSC algorithm, a model of BFT, we can define the structures of Suterusu’s Liquid Decentralized Meritocracy (LDM) in the context of stake-weighted voting participation using Suterusu’s native Suter token.
At a high level, there are three types of entities in Suterusu’s governance protocol:
- Token Holders
- Watching Nodes
- Validating Nodes
The voting power in on-chain governance decisions is quantified as a derivative of how long users hold the Suter token. The longer they hold the tokens, the more “mining power” is generated from them, adding a form of weight to the user’s tokens that is added to the overall token amount. However, there is a significant opportunity cost in holding tokens and not participating in the voting process. Since users are outpaced by other, more participatory users in voting, they tarry behind in the accumulation of Suter tokens, incentivizing them to be active in the overall network’s governance decisions.
Users delegate their Suter tokens to validator nodes, which subsequently lock them in as a “stake” and generate a return on investment (ROI) for the token holder. Validators invest in hardware and their own tokens to verify and produce blocks in the Suterusu blockchain. They can even charge fees to users for staking.
Validator nodes are overseen by watching nodes, which verify transaction data using parameters defined by community vote. Watching nodes are rewarded for finding malicious validator activity, which also slashes the validator’s stake should they act against the interest of the Suterusu community.
In summary, a connecting thread of incentives and rewards for Suter token holders, validators, and watching nodes fosters an environment that promotes activity and participation. Voter turnout rate is improved (on-chain governance turnouts are typically low), and the balance of power through a dual-node layer of checks and balances maintains the integrity of the system, ensuring weighted referendum votes only are finalized once a majority of the network agrees.
A Unique Approach
Suterusu derives inspiration for its LDM as a synergy between liquid democracy and the meritocracy systems of East Asia. This is opposed to static committee voting models deployed in many blockchain networks with on-chain governance, where decisions are reflective of conventional governance systems in representative and direct democracies — each with their own, independent limitations.
Liquid decentralized meritocracy is ideally suited for public blockchains, where adaptability and rapid decision-making need to be valid, have high turnout, and can facilitate real-time referendum decisions that accurately represent the collective interests of the community. Delegating votes in previous on-chain models are typically directly propagated to a fixed committee, which based on staking models, usually are large bag holders of the system’s native token.
In Suterusu, these votes can be delegated to “professionals” in specific fields that operate validating nodes — such as economist and developer. Therefore, the balance between the number of votes and professionalism of decision-making is adhered to and finishes the addressing of the three primary restrictions facing on-chain governance models.
Suterusu’s LDM is a marked indicator of progress in the crypto sector towards improved on-chain governance mechanisms, born out of in-depth research and experimentation. Liquid decentralized meritocracies are the optimal model for public blockchains because blockchains have very niche requirements compared to conventional organizations.
Focusing on universality, adaptability, and inclusivity, Suterusu appears poised to pioneer the foray into highly functional on-chain governance of public blockchains where other projects have failed.
Zhengpeng Hou is the founder of the Suterusu project. He is an open-source veteran with more than one decade of successful experience in contributing and building community. He has also worked for Linux distribution companies like Ubuntu in the past and devoted himself to the blockchain industry. He specializes in open source project development, IoT, and cloud computing and is a true believer in decentralized technology.
