Vortex 101

Vortex 101

One of the key features for any project to succeed is in the governance of the project.  

In traditional corporate structures, although still challenging, it is easier, well at least clearer.  They have shareholders who choose the board of directors, who select the officers, who hire the employees to do the work.  The board of directors is usually composed of people who have the most shares, thus the biggest voice, and they hire the officers who will be able to fulfill their desires, and the officers hire the people that they believe will do the jobs they are asked to.

It is clear.  It is simple.  Those who have the money have the power.  Everyone else is a moving piece that can be replaced.

So, what about the governance in community-driven decentralized crypto and blockchain projects?  Well, the obvious conclusion is decentralized governance.  The concept of a decentralized autonomous organization (a DAO) can be traced back to the 1990s but was popularized by Vitalik Buterin, the creator of Ethereum, in 2014.  It can take multiple forms, from being the foundation of a digital company to just being a voting mechanism.  

As pointed out in other articles, DAOs are still in their infancy, and various projects have tried implementing various DAOs sometimes with success and sometimes with failure.

When envisioning the future of what Humanode can bring to the table, the founders and core team also fundamentally agreed that a DAO was necessary to realize this project's vision and goals.  At the same time, they also saw a brick wall in front of them.

Yes, there were numerous technological challenges that needed to be overcome, and yes there were many traditional challenges in governance to overcome, but more importantly, there was a philosophical challenge that needed to be overcome.

The question was, in simple terms, what should the governance be based on?  Most decentralized projects came to be with the desire to break free of the mold of centralized governance.  Having said that, due to the fact that the consensus mechanisms of most blockchains (both Proof of Work and Proof of Stake) are capital intensive, the majority of the results have been plutocracies, which tend to concentrate the power into the hands of a few.

It was immediately realized that Humanode, which relies on a cryptobiometric infrastructure to determine that its participants are living and unique human beings, required a different structure and philosophy if it was to build a governance model that was viable.  The core ideology of the Humanode network has been, and will always be, one person = one node = one vote.  Obviously, a traditional corporate governance model based on money = power would not work.

So, how does one formulate a governance model that would work with a truly decentralized project?  Dato Kavazi, the co-founder of Humanode, who has not only been researching the rise and fall of DAOs but also the historical rise and fall of historical governance models, came up with a hypothesis that could act as the foundation, the building blocks for a DAO that would work with Humanode.  The Vortex.

The Vortex

Since the inception of Humanode, the Vortex has been a key element in the vision of giving the community the power to steer the project forward.  It was introduced in the Humanode whitepaper v0.9.5 as the groundwork for the governance structure custom-built for a fully decentralized community.

In the whitepaper, It was clarified that although the governance structure would start with the Humanode Core having full control at the start, 4 years after the mainnet launch, all of the authority of Humanode Core will be transferred to Vortex and dispersed among the community and its governing entities. 

Now that one and a half years from the mainnet launch have gone by and the Humanode core has been able to gain experience and knowledge through the operation of the Humanode network, the philosophy that is required to support the Humanode governance model has been even more clearly envisioned, and tweaks and adjustments have been made and clarified in the Vortex 1.0 whitepaper.

Naturally, like everything else, Vortex is the blueprint for the governance model the founders and the core team envision, and will be subject to change as Vortex comes alive and the power balance shifts from the Humanode core to the participants of the Vortex.

So, what is this Vortex?  How does it differ from other governance models?

First off, the philosophy of the whole system is based on a combination of Meritocracy (based on Merits, as in a system where people get success or power because of their abilities, not because of their money or social position) and Cognitocracy (from Latin verb cognoscere ‘to know’ and from Ancient Greek kratos 'rule') - a legislative model that aims to concentrate power in the hands of those who have proof of proficiency in a specialization and aims to take into account the quantitative and qualitative data of contribution of governors to the Humanode network.

No, this does not mean that the Humanode network wants to make the governance system for a few elitist pricks.  The goal is to make sure that the important proposals come from people who know their stuff.  Professionals in their field.  Not by populists, oligarchs, collusionists, etc who might be trying to game the system for their own personal advantage.

One of the biggest headaches in decentralized governance is the fact that even if people have the power to vote, people rarely do.  Studies show that even on “successful top 50 DAOs”, on average, only about 1.77% of those eligible, vote.  Of course, it must also be noted that 1% of the voting population wields 90% of the voting power in most PoS networks. 

This creates an opportunity for people who are interested in their own agenda to utilize the power of money to find themselves dictating the shots.  

Perhaps that is why a number of venture capital funds who loved the potential of cryptobiometrics opted not to “invest” in Humanode early on because they would not earn any significant voting power, unlike other projects.

So, what happens when each person is only allowed one node, thus one vote?  The Humanode chain is nearing 1000 active validators, meaning that there are 1000 people who could have equal voting power.  What happens when there are 100,000 active nodes?  1,000,000 active nodes?  

Not everybody launches a node because they believe in Humanode.  Some may just launch nodes because they get some compensation for running the node, and hope to reap benefits when there is a profit share in the future.  Many that run nodes may not know programming or building on blockchain networks and are more interested in the concept. 

Would you want those voters to be the people proposing what type of security the network requires?  On where funds are spent on development?  Would you want the hardcore programmers to dictate how marketing is conducted or how the UI is designed?

The point is that you want the right people in the right place.  You want to make sure that people who have proven that actually know what they are talking about are in the position to propose the necessary actions.  You also want the system to be dynamic.  Balances and narratives constantly shift.  Even more so is the world of decentralized finance and Web3 which are just starting to emerge.  In reality, the game changes faster than any checks and balances structure can evolve to deter the constantly changing meta.  Thus a dynamic, flexible, transparent, and active system is the requirement.  Meaning that only those who are knowledgeable, current, and active should be able to lead the path forward.  

Thus Cognitocracy, the Vortex, and the tools that are being developed to make this happen.

The basics.

To break it down, Vortex consists of three major parts: 

  1. Proposal pools
  2. Vortex (voting chambers)
  3. Formation 

Proposal pools and voting chambers belong to the legislative branch. Formation belongs to the executive branch.

One other important fact to know is that Vortex consists of Human nodes, Delegators, and Governors/Cognitocrats.

  1. Human node — a person who has gone through proper biometric processing, participates in blockchain consensus, and receives network transaction fees but does not participate in governance.
  2. Governor/Cognitocrat — 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.
  3. Delegator — a Governor who decides to delegate his voting power to another Governor.

In this article, we will be focusing on the proposal pools and the voting chambers.

The voting chambers of Vortex are divided into the General Chamber which incorporates all governors that reside in the system regardless of their field of expertise for proposal submissions that affect a system as a whole, and Specialization Chambers, each representing a distinct field of expertise run and governed by the specialists in that field.  On top of that, the Specialization Chambers might have a multitude of sub-chambers based on the necessity and size of a respective chamber.

So, who can make proposals?

The simple answer is that all Governors can.  Having said that, Governors will have different rights according to their tiers. Tiers are based on Proof-of-Time (PoT), Proof-of-Devotion (PoD) and Proof-of-Governance (PoG).  How much HMND you have, where you live, how high your education is, and who you work for means little in determining your tier of governance.

The governing tiers are as follows:

Tier 1 Nominee:  A nominee is a Human node who sets out to receive voting rights in any of the chambers. Although a nominee cannot partake in voting, he is already able to participate in any projects that are assembled in Formation and make proposals to chambers, excluding those connected to Fee distribution, Monetary System, Core Infrastructure, Administrative, DAO core.

Tier 2 Ecclesiast:  The second tier is achievable only when a proposal submitted by the nominee gets accepted by governors in a chamber. From this point on a governor can start actively participating in governance according to the governing requirements and are also allowed to make Fee distribution and Monetary System proposals.

Tier 3 Legate:  The third tier requires a demonstration of prolonged governing participation and passage of the meritocratic barrier by direct participation in the processes of the Humanode ecosystem.  In short, one would need to run a node for 1 year, be an active governor for 1 year, have your proposal accepted in Vortex, and have participated in a project through Formation.  Once a governor becomes a Legate, the governor also may propose changes to the core infrastructure.

Tier 4 Consul:  The fourth tier unlocks the ability to make administrative proposals, such as types of human nodes, their rights, and requirements, or the rights, requirements, and obligations of the governor tiers.  Naturally, the requirements become higher and they are required to have run a node for 2 years, be an active governor for 2 years, have their proposal accepted in Vortex, and participate in a project through Formation.

Tier 5 Citizen: The fifth and final tier unlocks the ability to propose changes to the DAO core.  The requirements are to have run a node for 4 years, be a governor for 4 years, be an active governor for 3 years, have your proposal accepted in Vortex, and participate in a project through Formation.

How the voting works.

For a proposal to be submitted to vote, a governor sends the proposal to the proposal pool in the designated chamber.  If 22% of the active governors in the chamber interact with the proposal (with at least 10% of the active governors upvoting it), the proposal moves to voting.

Alike the majority of DAOs that are currently in operation, the voting threshold for accepting a proposal will be set at a qualified majority of 66% + 1 vote. This means that if 66% + 1 vote including delegated ones are in favor of a proposal, the proposal will pass. The quorum will be considered assembled if 33% of active governors of the chamber participate in the vote.

The biggest distinction between the Voting Chambers and the proposal pool is the fact that delegated votes are not counted in the proposal pool. So in order for the proposal to move to voting, they will need 22% of the actual governors to take interest in the proposal.

That is all great, but how do I get involved?

The keys are in the three proofs.  

Proof-of-Time: Longevity of being a human node and longevity of being a governor.

Proof-of-Devotion: Proposal approval in Vortex and participation in a project through Formation.

Proof-of-Governance: Longevity of being an active governor and active governing status.

In short, be active!  Run a node, be engaged.  It will take at least until the end of this year for the baseline tools to be developed and put in place.  But there is no reason to sit back and wait for the tools to be fully developed.  Get a head start in participating in the development, community activities, or even the writer’s pool.

Having said that, once the tools are in place, there are a few things to remember.  One of them being the difference between a governor and an active governor. 

A governing era consists of 168 epochs. Each epoch lasts for 4 hours, which is similar to the epochs in human node validation on the chain. The key here is that a governor is only considered active if he or she was bioauthenticated and ran a node for at least 164 epochs out of 168 and if he or she has passed the necessary governing action threshold in the previous era, meaning if they have voted in a set % of the proposals.

And now comes the “secret sauce”.  Remember that the whole system is based on Cognitocracy?  Well, how does one objectively determine that a cognitocrat has actually contributed to the overall governance?  

The answer is the introduction of what we call the Cognitocratic Measure, or the CM.  The CM is an attempt to objectify the contribution of each cognitocrat to the system as a whole, and is a numerical score that is received by a cognitocrat every time a proposition is accepted by a chamber.

So, as a governor, not only will you vote “Yes” or “No”, you will also tack a cognitocratic score to the proposal.  Let’s say the highest score a person can give is a 10, and you voted “Yes” to a proposal.  You will then think about how good of a proposal it is, how it will impact the system as a whole, how much value it will add, and how creative it is, and give it a score.  Say, the proposal is good, it may not be the best proposal you have ever seen, but is solid and answers the need, you may give it a 6.5.  The system will then take the average of all of the scores based on the votes cast, run it through a multiplier, and give the proposal a score.  No, the score will not affect your ability to vote or make proposals, but it will give the other governors a general idea of how much contribution that cognitocrat has made to the system.  This number may very well affect how seriously governors will consider your future proposals. 

This number may also be a measure that becomes useful when a governor considers who they want to delegate their vote to. 

Obviously, there is more to the process, such as how the multipliers are set and so on (which are discussed in more detail in the paper), but the important point here is that it encourages governors to actually think through their proposals, and voters to think about the value of the proposals.  After all, the last thing you want is a “proposal mill” that clogs up the system with meaningless proposals that have little value to the community as a whole.

And finally, the people with the highest amount of CM in each chamber will be given extra power in the governance.  The veto power.  If 66% + 1 person of the governors with the highest amount of CM in each chamber vote to veto a proposal that passed the general vote, a proposal can be vetoed up to 2 times per proposal.  Basically, we give the power to veto to the people who have been judged to have made the highest contributions to the community as a whole.

In conclusion, the Vortex has been designed to give power to those who are active, who make worthwhile contributions through actual participation, and who drive the community forward.

As mentioned in the beginning, these are the building blocks and the blueprints for the construction of the Humanode DAO, the Vortex.  How it will develop and progress, will be in the hands of those who participate.