The concept of a “Decentralized Organized Company” (DAO) was proposed by Daniel Larimer (2013) and implemented in Bitshares in 2014. In 2014, Vitalik Buterin, the founder of Ethereum proposed that after a DAO was launched, it might be organized to run without human managerial interactivity, provided the smart contracts were supported by a Turing-complete platform (V. Buterin, 2014). Thereby, DAO clearly designates something broader than the typical definition of “organization”—a social group that brings people together and works toward a common purpose. Vitalik thus defines a DAO as "a decentralized autonomous community" in which all members have a share in the decision making (V. Buterin, 2013), “an entity that lives on the internet and exists autonomously, but also heavily relies on hiring individuals to perform certain tasks that the automaton itself cannot do” (V. Buterin, 2014).
Governance in the Humanode Network will be decentralized from genesis and is to be known as Vortex—the Humanode DAO, a Decentralized Autonomous Organization to rule over the changes. Vortex consists of human nodes, delegators, and governors.
Human node—a user who has gone through proper biometric processing and receives network transaction fees but does not participate in governance.
Governor—a human node who participates in voting procedures according to governing requirements. If governing requirements are not met, the protocol converts him back to a non-governing human node automatically.
Delegator—a governor who decides to delegate his voting power to another governor.
The governors will have different rights according to their tiers. Tiers are based on Proof-of-Time (POT) and Proof-of-Devotion (PoD), meaning that devotion in the system is valued more than the riches one has. Tiers do not give any additional voting powers to their holders, instead they are given an ability to make and promote proposals on crucial matters. If a human node wants to become a governor he must have his proposal accepted by the Vortex DAO. All proposals are submitted to the proposal pool anonymously.
The combination of PoT and PoD in Humanode governance means that a governor progresses through tiers based on the time his node was considered governing and the amount of devotion a governor had channeled into the network.. On top of that, to progress to a Legate or higher a Governor must participate in Formation, a proposal-based grant mechanism. Even if a governor participates in Formation during the first days of his node's existence, he will still be required to govern for another three years to become a Legate.
A quorum is reached if at least 33% of the Governors vote on a proposal. If 66% Governors out of the quorum vote to approve a proposal, then Vortex will consider it approved. This means that 22% of the Governors will be the necessary minimum to approve a proposal. Human nodes that do not participate in governance are not counted to reach a quorum.
The voting power of each Governor is equal to 1 + the votes of his Delegators.
Any proposal that is pulled out of the proposal pool gets a week to be voted upon in Vortex.
Figure 20. Vortex voting procedures
Becoming a part of Vortex gives access to different governing tools based on governor tier. Hypothetically, separation of voting power from proposal rights that are solely determined by time and participation should make the whole system reasonably decentralized, preventing malicious actors from a quick attack on the Humanode network.
Tiers and proposal types
Tiers give various proposal rights to the governors. The higher the tier the more crucial a proposal a governor can make.
In more detail, Humanode Upgrade Proposals (HUPs) types are divided into the following categories that are based on the inception characteristics of Vortex:
Tier 1 Citizen
Social media presence
Web, mobile, and desktop application for dashboard, wallet, biometric verification, and voting
Sybil defence through decentralized crypto-biometrics
Equality between peers in decisions on a global state
Max time in proposal pool: 3 months.
Types of human nodes, their rights, and requirements
Governor tiers: rights, requirements, and obligations
Formation procedures and grants
Tier 4 Legate
A DAO begins with a defined scope of proposal types to prevent detrimental actions. But it is not supposed to stay narrow. The system will eventually allow the submission of HUPs to do anything possible on the DAO. Simply by submitting proposals, Vortex can go wherever the imagination takes proposers. Maximum time in the proposal pool: 6 months.
Proposal system values and protocol
Vortex voting values and protocol
Equal voting power distribution
Decisions on the creation of new types of human nodes
Decisions on the creation of new types of governors
The above-mentioned characteristics will be implemented on top of the Humanode network at the deployment stage.
If for some reason 66% percent of Consuls decide that it is necessary to veto a decision then it will be possible to do so, and the decision will be considered declined by the Vortex. But they cannot veto the same decision more than two times in a row, meaning that if a proposal is approved thrice then the veto cannot be implemented. Vetoes are important to safeguard the system from panic-based attacks and the dilemma where a minority of professionals might be able to see things clearer than the whole mass of voters. But liberty, public opinion, and democracy should prevail in the end as the Consuls’ veto cannot be implemented more than 2 times for a particular decision.
The two main principles behind creating the Humanode proposal system are to mitigate chokepoints and to keep up the quality of proposals. Governors can participate in every part of the system whilst other human nodes can only make proposals. Non-human nodes cannot propose directly but can be nominated by any Governor to do so. A human node cannot create more than 5 proposals at the same time. All proposals are submitted to the proposal pool anonymously.
Figure 21. Proposal pool system and voting periods
How it works:
A human node casts the proposal into the pool system, defining a header, the voting period, writing a description, adding docs, etc., but more importantly, choosing one of the types of proposals that are available depending on the governing tier.
Inside the pool, Governors upvote or downvote different proposals. Each Governor can give each proposal an upvote or a downvote. Each pool consists of different boards: fresh, trending, popular, new, etc.
Proposals that receive upvotes or downvotes from 22% of existing Governors are immediately conveyed to Vortex for voting. Proposals that do not receive enough upvotes or downvotes in the max voting period get deleted from the pool and can be proposed again in two weeks' time.
The voting procedure in Vortex takes up strictly a week for each proposal to be voted upon.
If approved the proposal is conveyed to Formation to receive funding and assemble a team.
If declined by Vortex, the proposers must wait out a period of two weeks to propose again.
Vortex governs the Humanode by deciding on key parameters through the voting power of human nodes.
Formation is a part of the Humanode. It is a special grant-based development system providing grants, investments, service agreements, and projects to build. It is dedicated to supporting the Humanode network and all related technologies.
Any human node can join Formation to make a grant proposal or apply to become a part of a team that already develops an approved proposal. Proposals by non-human nodes can only reach Formation if one of the governing human nodes decides to nominate them. Such limitations allow us to protect devoted followers and contributors to the Humanode network.
The process is as follows:
Figure 22. Proposal pool, Vortex and Formation processes
Human nodes create proposals, allocate funds for their implementation, and take coordinated action to see the proposals implemented properly. Governors upvote and downvote them. We assume that 2% of fees go to Formation as the network begins to function. Then, the proposers, i.e., Vortex, will regularly determine the percentage of the fees going to Formation.
The Humanode network's DAO supports a number of different proposal directions.
Generally, Formation funds:
Research: Advancing basic and applied research in cryptobiometrics, cryptographic primitives, distributed systems, consensus mechanisms, smart-contract layers, biometric modalities, liveness detection, encrypted search and matching operations .
Development & Product: Development turns research into software, while Product turns it into user-experiences. The formation is primarily interested in technologies that expand the Humanode network, its potential, capabilities, and security, as well as the ecosystem. From DeFi and NFT’s to decentralized courts.
Social Good & Community: Formation supports community members to bring awareness to open-source, decentralized, and bio-technologies, and scale community outreach for the Humanode network.
The Formation funds are mainly used to maintain the network.
Assembling a team
We understand how crucial it is to find and coordinate people that are willing to support the proliferation of the Humanode network. That is why we are developing a special team-assembly procedure in the Humanode app that will allow those whose proposals were approved by Vortex to find passionate professionals to assemble their team from among the members of the international Humanode community. All the proposer has to do is send a digital offer to any other human nodes that he thinks are a good fit for his projects. Their proposal must have the public address of the potential member, and it should state working objectives and conditions and have a smart contract that locks some part of the grant for that person in particular. Proposers — the team (public key - role).
The team is partially assembled
No one in the team yet
If the proposal for grant in Formation does not include the team, it’s members might be selected from the human nodes who are interested in the proposed project.