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# Governance

This page outlines the governance mechanism of the BIFROST Network during the Incentivized Testnet.

## Introduction

BIFROST aims to reflect the voice of the community and enhance the protocol through governance. Based on our shared vision, the BIFROST governance mechanism encompasses all token holders. All types of governance must go through the decisions of holders who can vote or create proposals. In addition, our governance forum allows everyone, even those without tokens, to freely discuss and share ideas about the protocol.

## Glossary

• Referendum: The proposal with the highest amount of support from each launch period is selected to be a referendum. During the voting period, BFC holders can submit “aye” or “nay” votes by depositing their shares, and approval is determined by the total voting weight at the end of the voting period.
• Launch period: A period of time with blocks of a certain length. At the end of the launch period, the proposal with the most endorsement is selected for a referendum.
• Voting period: A period of time during which voters may vote on a referendum. At the end of the voting period, votes are aggregated to determine whether or not a referendum is approved.
• Enactment period: A period of time it takes for a referendum to be reflected in the network. From a technical perspective, a referendum is placed In Queue, waits for a certain amount of time specified by the enactment period, and is finally applied by pallet_scheduler.
• Lock period: A period of time starting from the end of the enactment period of a referendum during which the voters’ shares are locked.
• Delegation: As it may be difficult for BFC holders to participate in every voting, delegation exists as an option to yield one’s voting rights by using their stakes as collateral and increasing the voting weight of a certain trusted voter. In such a case, when the delegated voter casts their vote, it is submitted with an additional delegated weight. As with normal voting, a conviction can be applied to delegation to increase the vote weight by increasing the lock period. However, delegators cannot vote unless they remove their delegation.

## Mechanics

The idea behind governance is to allow holders to make changes to the BIFROST Network through voting. Every proposal has to go through a referendum.
Members of the General Council are expected to have a deep understanding of the BIFROST Network and be aligned with its long-term goals. Initially, General Council will be appointed by the Bifrost Foundation, and over time will move towards the election-based system in which BFC holders will be voting members in and out.

## Proposal

### Creating a proposal

In order to submit proposals, participants must first create a proposal. During the process, participants suggest changes to the pallet (smart contract) and the extrinsic (function). Once participants make all the changes, they have to save the generated hash.
The saved hash is used to submit a proposal. When submitting a proposal, holders can set the minimum amount of BFC to endorse the proposal. Keep in mind that the minimum amount of BFC will be locked until the proposal is selected as a referendum and undergoes voting. This is a measure to prevent voters from selling their votes after endorsement. The required number of coins may vary depending on the type of the proposal or the minimum number set by the proposal creator.
If a proposal fails to become a referendum, it has to go through another launch period. The process is repeated until the proposal is selected as a referendum. At the end of every launch period, the proposal with the most endorsement will be selected for a referendum.

### Endorsing a proposal

Voters can endorse a proposal by clicking the “Endorse” button. The endorsement may fail if a voter does not have enough coins in their address or does not own enough coins set by the proposal creator.

### Referenda

Given that at least one proposal is endorsed by the majority by the end of a launch period, a new referendum is held after every voting period. During the voting period, holders may vote either “aye” or “nay”. If a referendum passes, it goes through the enactment period and is queued for dispatch.
The number of coins determines the voting power in the referendum and holders can vote on behalf of other voters through delegation. When voting on the referendum either with “aye” or “nay”, voters can use the “Increase voting power” button to increase their conviction.
Voters can increase their voting power by increasing their lock period. With this feature, voters can increase their voting power by up to six times. The increased lock period will be succeeded by the voting period. For example, if a voter decides to increase their voting power by two, their lock period following the voting period will be doubled.
Lock Period
Vote Multiplier
0.1 (no lock period)
0.1
1 (no lock period)
1
2
28
3
56
4
112
5
224
6
448

### Balance

To unlock coins used for endorsement and voting which are immediately locked, users need to access the “Profile” page. On the “Profile” page, users can check their balance as well as their governance participation history.
To unlock their votes, voters need to click the “Unlock” button under Delegation Status. By clicking this button, voters request the remove_vote function to the BIFROST governance system. After the lock period, voters can claim their coins used for voting. Even if remove_vote is not requested, unlock will begin automatically after the end of the referendum voting period. However, if remove_vote is not requested, the balance will not be transferred to claimable BFC.

## Voting System

In order to alleviate the problem of poor turnout, the BIFROST governance mechanism adopts the Polkadot-based Adaptive Quorum Biasing (AQB) protocol instead of the existing quorum-based voting system. This is because the latter requires the participation of a certain number of voters and manifests a number of problems including the following:
• Low participation rates due to strict and fixed quorum settings.
• Difficulty in setting a specific quorum that is both appropriate and agreeable to all participants.
Conversely, the following are key characteristics of a voting system that is not quorum based:
• Participants are rewarded.
• However, nonparticipants are penalized.
However, this system can lead to malicious actions and disproportionate turnout.

### Voting Mechanics

#### Terminology

• Approve: number of aye votes (conviction included)
• Against: number of nay votes (conviction included)
• Turnout: total number of votes (conviction not included)
• Electorate: total number of coins issued in the network
• The total number of coins issued in the network refers to the number of BFC in the BIFROST Network.

## $\frac{against}{\sqrt{turnout}} < \frac{approve}{\sqrt{electorate}}$

• A referendum will be approved when the majority of voters vote “aye” and there is a low turnout. However, with a high turnout, there should be fewer “aye” votes.
• The general public will vote on a PTB basis (Public Proposal).

## $\frac{against}{\sqrt{electorate}} < \frac{approve}{\sqrt{turnout}}$​

• A referendum will be rejected when the majority of voters vote “nay” and there is a low turnout. However, with a high turnout, there should be fewer “nay” votes.
• All proposals submitted by the council members’ (External Proposal) are based on the NTB model.

#### Example

Parameter
Value
approve
6000 (1000 * 6) = lock balance * conviction
against
10 (100 * 0.1) = lock balance * conviction
turnout
1100 (1000 + 100) = approve + against
electorate
1M
result
0.3 < 6 (aye wins)

## Governance Flow

1. 1.
Holders have to create a “Proposal Hash”, a hash containing the changes.
2. 2.
Once the “Proposal Hash” is created, the hash creator can either choose to submit a proposal by themself or ask other holders to submit a proposal using the hash. The proposer must deposit or lock up a certain amount of coins into the governance to register a proposal. If the submission is successful, the proposal is publicly registered.
3. 3.
At the end of every Launch Period, the proposal with the most endorsement will become a referendum and voters will vote either “aye” or “nay” during the voting period.
4. 4.
At the end of the voting period, the BIFROST governance system will aggregate casted votes to determine whether a referendum or referenda will be approved.
5. 5.
If a referendum or referenda are approved, the BIFROST network will reflect the changes after the enactment period.

## Council

Council members are in charge of managing the BIFROST Governance. Their role is to cancel malicious referenda, select the technical committee and manage the treasury.
In case the council members are unable to participate in every activity, a prime member to represent them is separately selected. The council member who receives the highest number of votes during the council round is selected as a prime member. Members who do not cast votes on council proposals automatically follow the vote of the prime member

## Technical Committee

The technical committee is a committee selected by the council members and is also responsible for managing the BIFROST Governance and preventing unilateral actions of council members. Members of the technical committee have the authority to cancel malicious proposals and proposals created by the council members and to fast-track proposals when necessary.
Members of the technical committee have veto powers to prevent any potential abuses by council members. If even one member exerts veto power, the proposal is nullified and enlisted on the blacklist for a certain period of time. This prevents the submission of relevant proposals. In addition, like council members, members of the technical committee cannot exercise certain authority indefinitely and must possess BFC tokens.

## Treasury

The treasury stores and burns BFC which have been slashed when proposals and referenda are canceled. They also store the slashed BFC of network node operators. The treasury is managed by the council members. The council members will do their best to carefully manage the treasury so as not to lose the trust of community members. Keep in mind that council members are also BFC holders who will not take any actions that negatively affect the BIFROST Network.

## FAQ

1. 1.
I am not familiar with codes. Is there any way I can create proposals without coding knowledge? You can create proposals without blockchain or coding knowledge. Select “bfcUtility” under “communityProposal”. Then, insert the URL that explains your proposal under proposal "Bytes". We encourage you to use the BIFROST Governance Forum URL.
2. 2.
How can I submit a proposal on the behalf of other voters? Our governance mechanism allows one to submit proposals on the behalf of other voters or network participants. To submit a proposal on the behalf of other voters, you must know the “Preimage Hash” and all the changes on the “Pallet” and the “Extrinsic”. Click “Submit a Proposal” and insert “Preimage Hash” created by another holder and imply all the changes of the “Pallet” and the “Extrinsic”.