SWARM’s Governance Upgrade: Decentralized, Self-Organized, and Ready for Action
Vote now on the new SWARM Network Constitution
In the crypto economy, governance is key.
We’re often asked where the name “SWARM” comes from. While we’ve given different responses at different times, one of our community members just recently resurfaced a definition that encapsulates many of the facets of what we hope to achieve with SWARM:
The successful achievement of this state requires frameworks and incentives applied globally across a collective of individual humans. Governance is therefore essential. It’s how a community can coalesce around mutual values and frameworks.
From its beginning, we have worked to manifest the SWARM network with governance as a crucial, core concept.
SWARM Governance Upgrade
As our community has gotten to know us, we have strived to build and roll out SWARM in a series of structured and carefully considered phases. We have applied the same approach to our governance, and to the principles we have adopted.
From the very beginning, SWM holders have had a voice, and have been able to vote on various foundational decisions — the first vote taking place only a few days after the initial SWM tokens had been distributed to our community.
We introduced SWARM Masternodes last year, and their adoption has already grown beyond our expectations to 370 nodes, each of which has staked 50,000 SWM to run infrastructure for the network. That’s 20% of the SWM token supply vested and stashed away.
We also saw that the vested network participants, many of whom own masternodes, seemed to begin to care more, and that this population became the nucleus of one of the most engaged communities in the blockchain space. We observed community members speaking up and requesting opportunities to take greater responsibility. Members drive self-initiated programs to manage the community, give legal/tax/regulatory perspectives, and our favorite, directly connect issuers and partners with SWARM. We have been amazed and delighted to see this family come together, and we are grateful for every contributor.
We think the time has come to introduce an upgrade to the SWARM governance model. Today we are proud to show you some of the hard work that has been done in parallel to the release of the new platform upgrade. We have published several proposals in a number of ballots that we believe will set SWARM up for its next evolution.
The ballots span the following:
1. SWARM Network Constitution
An ideal governance model allows for fact and competence based decision making. In other words, competent people make informed decisions based on objective facts, and in a seamless and fully automated voting process.
At the same time, we feel the SWARM network needs to be appropriately self-identified, resilient and self-determined to face whatever changes or evolutions come its way.
Guided by these principles, we’ve created a proposal for a SWARM Network Constitution (SNC-2019.01). It addresses the following elements:
- SWARM Network Members: The SNC provides more precise terms to define who qualifies to become a member and how they do so. Note that we will build that definition on the SWARM infrastructure on top of the Market Access Protocol (MAP) and the SWARM Investor Pass functionality in a way that prioritizes privacy and data sovereignty.
- Governance Actions: The SNC defines how members can participate in the decision process. The document describes the flow thereof, which includes creating proposals, gaining support from other members, and resulting ballot proposals. Proposals are then voted on in a transparent way, and — subsequent to approval — are reliably and trackably executed. Our goal is to introduce concepts that incentivize thoughtful and constructive proposals, while ensuring compliance and legality.
- Other Network Participants: In the SNC we’ve begun to define other groups that are important actors on the SWARM network, namely issuers, investors, and channel partners. We hope that together, as the SWARM community, we will be able to build future mechanisms and incentives to attract, retain, and integrate these key participants and make them stakeholders to the network. With one of the ballots, we are proposing to task the SWARM Council to explore this further and trial these concepts. Another ballot makes this more tangible, determining how the Council should develop proposals to gradually give masternodes more responsibilities on the network — from governance to policy making to operations.
- SWARM Council: With the SNC-2019.01, we’re defining a next step in a self-determined network. However, there is much conceptual, operational, and supervisional work needing to happen which simply cannot be fully automated yet. This version of the SNC defines the SWARM Council as “helping hands” dedicated to the network’s purpose and its members. With a rolling nomination and appointment schedule, we have set up the council to continuously self-renew and change its face and composition. In our view, the SWARM Council holds a transitional role until more governance actions can be automated or carried by other network participants, before it ultimately dissolves.
We know it’s likely that various aspects of our model will need to be adjusted over time. Nonetheless we believe it’s a good next step toward delivering a governance system that sets the bar in terms of quality and reliability for the SWARM network participants, and also preserves the agility to change over time.
2. More seats on the SWARM Council and new candidates
As described, SWARM network members have demonstrated their engagement and eagerness to contribute and take responsibility for the direction of the network. We are proposing to bring this drive into the SWARM Council by adding more members. One of the ballots is to increase the body to five total seats.
Another three ballots then propose to appoint Zachary K. Perryman, Sam Stone, and Richard Steward to the SWARM Council. These individuals are outstanding candidates, each with unique and complementary skill sets and their own special story of how they came to find and interact with SWARM. We are excited to have them as part of the community and glad that they are interested to serve the network on the SWARM Council. You can read more about each candidate here.
Once elected, the five seats will be up for reelection on a quarterly rolling schedule, with one seat per quarter re-elected starting in 6 months.
3. SWARM Network Policy for Issuance Staking
The concept of staking for Masternodes has proven to be powerful and well-received within the SWARM Community and beyond.
A few months ago, we introduced the concept of making issuance completely free. Issuers now only need to stake based on the value of their security tokens on the SWARM Network. It’s fair to say that this revolutionary approach to issuance has been a great success both in practice and in terms of positive recognition across the industry. The issuer staking model has attracted a lot of issuers, who see this as a key value proposition. On the other hand, it’s exciting to see this important group become vested participants of the network. The ballot is the formal approval of that program .
These are exciting times, as SWARM’s open infrastructure for digital securities is more widely adopted and accepted in the world of finance. Let’s lay the groundwork to manifest the network as a key, future-proof, reliable, and trustworthy market infrastructure in this new world of finance.
Go out and vote.
Voting has begun today and will continue until 6/25/2019 1p GMT / 6a PT
To address questions and discuss governance and the current ballots, I will be doing an AMA on the SWARM Telegram on 6/19/2019 6p CET together with Zachary K. Perryman.
PS: Special thanks to Zak P (the honey badger) for his tireless help and perspective on crafting the SNC. Also, we admire the work done by others in the industry, amongst them namely Polkadot, and want to give them a shout-out