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The Trust and Transparency working group, initiated in August 2022 is aimed at flagging concerns related to DC, addressing disputes within the Fil+ ecosystem and fostering accountability among the complex set of stakeholders within the program. As the program continues to expand and mature, it's important to ensure that the decision-making process remains efficient, effective, scalable, and decentralized. To this end, we propose implementing a staking solution that would require participants to put up a stake to gain decision-making privileges as part of the T&T Board. This approach would help filter out noise in the current working group with 300+ members in the Filecoin slack channel, as the cost of submitting a stake would outweigh any potential benefit from maliciously participating (e.g., creating fake accounts). To this end, we have already gauged interest from the current participants, and the list of interested participants is published [here]. Additionally, with fewer participants in the working board due to the staking requirement, decisions can be made more quickly and with greater confidence. By incentivizing genuine engagement and commitment, we can further enhance the trust and transparency that underpin the Fil+ community.
Next Steps
After carefully considering the various proposed implementations, taking into account both legal and technical constraints, we have narrowed down the options for the first version of T&T staking to two potential implementations:
Tracked wallet: T&T participants transfer FIL to a wallet that the Fil+ governance team monitors to join the T&T working board. If a participant moves FIL out of the tracked wallet during their participation in the T&T board, they will be subject to penalties.
Burner wallet: T&T participants transfer FIL to a burner wallet to join the T&T board.
We will discuss these two options during the upcoming T&T board, and notary governance calls and aim to finalize a plan within the next two weeks. If you have any thoughts or opinions about the proposed implementations, please comment below.
Proposed implementations
There are numerous ways to implement this idea, and several options have been suggested thus far.
Tracked Wallet
Flow:
T&T board members would be asked to create a new wallet and designate it as their "tracked wallet."
They transfer $x$ FIL to the wallet.
Fil+ tracks the amount of FIL in the wallet to ensure that it always contains at least $x$ FIl.
If the amount in the wallet falls below $x$ FIL, the notary is penalized.
If a notary deviates from the rules or engages in malicious behavior (though determining this may be difficult), their wallet will no longer be tracked.
Pros:
No centralized entity needs to hold funds, which enhances the trust and decentralization of the system.
Implementation is straightforward and incurs minimal engineering costs.
Cons:
The risk of a board member losing FIL may be negligible, other than the time cost of money and risks of market volatility, which could reduce the effectiveness of the staking mechanism.
Burner Wallet
Flow:
board members who wish to join the T&T Board stake $x$ FIL by sending it from their ledger address to a burner wallet.
They send the Fil+ governance team a link to the transaction to prove that they burned the FIL.
Pros:
Implementation is simple and incurs no engineering cost.
There is an upfront cost to join the T&T Board
Cons:
board member's FIL is instantly lost to the burner wallet and is not retrievable in case they decide to leave the T&T Board
Fil+ Treasury
Flow:
Notaries who wish to join the T&T Board stake $x$ Fil by sending it to a treasury wallet.
When a Board member is found to be operating in bad faith, their stake is either slashed. (specifics on % amount TBD based on community consensus)
The T&T Board can vote to use a portion of the treasury for different initiatives (including voting to give part of the stake back).
Pros:
A pool of funds can be established that can be used for other initiatives such as funding grants for fraud analysis, doing early research on future tools, etc.
Cons:
Implementation would be complex and time-consuming from both a legal and engineering standpoint.
Optimistic Governance
Flow:
There is no T&T Board, and no one is required to stake $x$ FIL; rather, they must stake to initiate a motion to the T&T board.
If another WG member wishes to contest the motion, they must put up an equal amount of FIL. This starts a dispute process in public, overseen by the T&T WG lead and the Governance team. At the end of the $y$ week time period, based on public discussion and voting, the motion will either be passed or fail, and the reward i.e. total staked amount, is distributed to the winning T&T WG member
If no WG members contest the motion within $y$ weeks, it is executed, and the staked amount is returned to the initiating WG member.
Pros:
Fil stake is only required when a motion needs to be initiated.
There is no need to determine whether a T&T notary is malicious.
Cons:
Implementation would be challenging from both a legal and engineering standpoint.
Proposed value(s)
$x=200$ $y=2$
Issues
Legal
The first two proposed implementations, the tracked wallet and burner wallet, are legally viable as they do not require a central wallet to hold user funds. However, the viability of the other two implementations, the Fil+ treasury, and optimistic governance, relies on the smart contract governance structure's design. Depending on how the governance structure is implemented, the Fil+ governance team may have to establish a legal entity to manage custody of user funds, which conflicts with our decentralized principles and introduces additional legal complexities.
Engineering
The engineering costs for each approach may vary. For example:
Tracked Wallets: Only wallet tracking software needs to be implemented, which is relatively straightforward using Filfox. However, additional alert systems would need to be created.
Burner Wallets: This approach requires no engineering cost.
Fil+ Treasury: Implementation using FVM would incur significant engineering costs, as FVM is a newly launched technology. An alternative approach using multisigs could be used, but this would be time-consuming from an administrative standpoint.
Optimistic Governance: Implementation on FVM could be achieved through a simple escrow contract, but using a manual escrow multisig owned by the Fil+ governance team would be impractical due to administrative overhead. Additionally, there are existing primitives for optimistic governance on the Ethereum chain that could be leveraged.
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T&T Staking
The Trust and Transparency working group, initiated in August 2022 is aimed at flagging concerns related to DC, addressing disputes within the Fil+ ecosystem and fostering accountability among the complex set of stakeholders within the program. As the program continues to expand and mature, it's important to ensure that the decision-making process remains efficient, effective, scalable, and decentralized. To this end, we propose implementing a staking solution that would require participants to put up a stake to gain decision-making privileges as part of the T&T Board. This approach would help filter out noise in the current working group with 300+ members in the Filecoin slack channel, as the cost of submitting a stake would outweigh any potential benefit from maliciously participating (e.g., creating fake accounts). To this end, we have already gauged interest from the current participants, and the list of interested participants is published [here]. Additionally, with fewer participants in the working board due to the staking requirement, decisions can be made more quickly and with greater confidence. By incentivizing genuine engagement and commitment, we can further enhance the trust and transparency that underpin the Fil+ community.
Next Steps
After carefully considering the various proposed implementations, taking into account both legal and technical constraints, we have narrowed down the options for the first version of T&T staking to two potential implementations:
We will discuss these two options during the upcoming T&T board, and notary governance calls and aim to finalize a plan within the next two weeks. If you have any thoughts or opinions about the proposed implementations, please comment below.
Proposed implementations
There are numerous ways to implement this idea, and several options have been suggested thus far.
Tracked Wallet
Flow:
Pros:
Cons:
Burner Wallet
Flow:
Pros:
Cons:
Fil+ Treasury
Flow:
Pros:
Cons:
Optimistic Governance
Flow:
Pros:
Cons:
Proposed value(s)
Issues
Legal
The first two proposed implementations, the tracked wallet and burner wallet, are legally viable as they do not require a central wallet to hold user funds. However, the viability of the other two implementations, the Fil+ treasury, and optimistic governance, relies on the smart contract governance structure's design. Depending on how the governance structure is implemented, the Fil+ governance team may have to establish a legal entity to manage custody of user funds, which conflicts with our decentralized principles and introduces additional legal complexities.
Engineering
The engineering costs for each approach may vary. For example:
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