Understanding SmartVote¶
One of the greatest challenges of building a cryptocurrency platform is ensuring you create a decentralized system of governance to manage, fund, maintain and expand the project. This key element has been absent in every major currency to date, so the natural response is to create a not-for-profit foundation that is tasked with maintaining the core protocol and promoting the coin, but is not really connected to the coin holders in any meaningful way. This approach has a few issues that have been made evident from the experience of older crypto currency platforms.
Current crypto foundations are not related to the currency itself by any mechanism that is included in the protocol and are not designed to outlive early adopters when they lose interest. The foundation then struggles to maintain funding until it implodes and core development of the protocol is left scrambling for funding or depending on charity that can’t be counted on and does not allow for proper budgeting and planning. Donations are also unfair to donors because there are always free riders that benefit from the effort done by others without contributing. Other projects have financed themselves by premining coins or running prelaunch sales, which is not a great solution either because control of the funds is centralized and at that stage it is impossible to quantify the future needs of the project.
Through the network of full nodes and the collateral requirement, SmartCash already has a decentralized network of smartnode operators that are heavily invested in the future of the currency, and that as hive structuring teams can act as stewards of the core protocol development, outreach, web, quality assurance, support. We propose a decentralized management system based on the voting mechanism.
All SmartCash holders can vote on projects to be funded from the community hive budget. There is no cost or fee to vote.
Project treasury and smartvote¶
The system works as a decentralized voting mechanism set up in the rules governing the blockchain, where budgets for specific projects are proposed, then the SmartCash holders as a whole vote on them. Each project, if it passes, is added to the total budget and paid from the project treasury to the person doing the work.
Reward¶
To guarantee long term sustainability of the blockchain, the network keeps a portion of the block rewards back as new blocks are created, with the smartnode operators tasked to act as stewards and invest in the maintenance and expansion of the network. This results in faster development and promotion, creating a virtuous cycle that benefits all actors, including miners, smartnode operators, investors and users. More importantly, this gives the blockchain itself a self-preservation mechanism that is beyond the control of any individual.
Contractors and proposals¶
Contractors of the blockchain can be developers, outreach professionals, team leaders, attorneys or even people appointed to do specific tasks. Proposals generally begin life as simple pre-proposal forum posts on the SmartCash Forum, where feedback and suggestions are solicited from the general community. Once the proposal owner decides they have a reasonable chance of passing their proposal, he created proposal here https://vote.smartcash.cc/. A fee of 100 SmartCash is associated with this action to prevent spam and ensure only serious proposals make it to this stage. Several tools exist to allow smartcash holder to comfortably review and vote on proposals.
Proposal websites¶
The community has gathered around SmartHive Governance Portal as a website to facilitate discussion and voting on proposals.
Conclusion¶
We envision a future in which this model of transparent, unbreakable and verifiable contribution to the common good, in combination with continuous participation of the crowd through active voting, is utilized to manage organizations that are owned or operated jointly by its members, who share the benefits and responsibilities of those collectives, like governments, cooperative corporations, unions, DAOs, cryptocurrencies, etc. We call this model Community Governance via Blockchain.