In the previous blog, we have talked about one of the key participants within the ABBC ecosystem: Block Producers (BPs).
Alongside their focus on block confirmations, BPs are also key actors within ABBC’s management model, a Decentralized Autonomous Organization (DAO) that provides greater flexibility and agility in our community governance.
The DAO is a governance model that allows communities to be guided or governed through business processes by data-driven decisions based on the choices of all the members of the community.
It can be summed up as an organization of people who communicate with each other through a network protocol to come to a consensus.
This governance model has been integrated with other projects such as DASH, that essentially affirms the interest and trust in such type of organization.
Let’s look into how DASH implements the DAO governance model and compare it to how the ABBC DAO works.
One of the more well-known projects that implemented a DAO is DASH. Dash’s DAO is a refined version of Bitcoin’s rudimentary DAO. With Bitcoin, the participants were miners, the protocol was designed by the miners, and so all decisions were made by the miners. DAO cannot work without a monetary incentive, and the block rewards shouldn’t go 100 percent to the single job of mining.
Dash’s makeup is more diverse. Contrary to Bitcoin, the block reward is distributed in three parts:
- The first 45 percent goes to the Dash miners
- The other 45 percent goes to its masternodes
- The final 10 percent is set aside to finance whatever expenditures the Dash network assumes necessary
With that final 10 percent, for example, Dash can hire its own developers, marketers, researchers, and anyone else the network would like to hire at any point in the future. The DAO facet of it all is how these people would be hired. In addition to performing their essential functions, masternodes also get to vote on how the 10 percent block reward is dispersed.
In addition to our own team at ABBC, we recognize the two main actors of the ABBC DAO:
- Users with the voting power (each holder of ABBC Coin)
- BPs who act as a decentralized governing body
The voting/selection process goes as so:
- Each ABBC holder can delegate his voting power to a proxy to vote on his behalf
- Each ABBC user has the right to receive a status of BP by
- a) Staking a fixed part of his coins
- b) Being elected as other BPs and community members
- As a vital part of the ABBC ecosystem, BPs will vote on ABBC’s blockchain for proposals that can directly impact the business
Each decision can make a significant impact on ABBC’s future success and it creates a gradual network effect. The more users that enter the ecosystem and implement valuable projects, the more established a network becomes. When there is a development fund project up for vote, it is conducted similarly to the BP’s selection process. Each proxy and ABBC staker has the ability to support any number of projects in a couple of varying voting proportions:
- 1) Voting on a yearly basis for a one-year road map
2) Ad hoc voting for projects that the ABBC management considers for immediate evaluation
For the roadmap voting, the total amount of projects to be voted for would be selected based on the total amount of the budget that is available. For example, if there are 50 available projects to consider with a total budget of $1 million and the available budget for the year is $50,000, then the projects would be selected accordingly to the yearly budget, aiming not to exceed it.
In the case of ad hoc voting for a project that created immediate concern, there should be funds set in reserve for future allocation. If there are no funds remaining or available for disbursement for the urgent project, then ¾ of the total number of ABBC holders will vote for the immediate allocation of project funds using next year’s budget, assuming that the budget hasn’t already been accounted for.
Along with the basic principles of DAO, which are transparency, total shareholder control, unprecedented flexibility, and autonomous governance, ABBC’s unique approach has many benefits. DAO users aren’t just investors or token holders; they are the disruptors of the traditional business model who will be using the power of their voices to reach a decision. In line with this, ABBC continues to promote decentralization and transparency with its implementation of the DAO governance model.