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Sphere · Whitepaper

Governance Engine

Abstract

Section titled “Abstract”

The emergence of cryptocurrencies, smart contracts and DAOs in the web3 space resulted from new technological possibilities opened up by blockchain technologies. These technologies show how basic cryptography can be used for advanced communication protocols with novel features concerning privacy, trustlessness, network stability and function.

While the first iteration of these ideas has not managed to establish itself in broader society, there is enormous potential for further development to support established organisations and governance structures using cryptographic protocols for exchanging and managing information.

The governance engine is a high-level cryptographic protocol that can be used for decentralized decision making and organization management. A foundational system like this would make it easier to implement DAO structures and provide a basis for integration of further, more advanced ideas, potentially inspiring a new generation of democratic tooling.

The Importance of Effective Decision Making

Section titled “The Importance of Effective Decision Making”

Decision making is the single most important aspect of any organisation as it sits at the center of every action taken. Organisations with superior decision making will in theory be able to outgrow competitors by finding and executing better actions.

There are countless different decision-making models, each with unique pros and cons. Majority votes, elected councils, court systems with judges and juries — each has its place but would be horrible in other contexts. Imagine a court decision about convicting a murderer based on a public majority vote.

”Pure Democracy” and the Centralization Trade-off

Section titled “”Pure Democracy” and the Centralization Trade-off”

Consider a community of physicists around a complex test facility. The most democratic approach (majority votes on every change) holds up their work. Not everyone can be informed about every topic. Conversely, fully centralized decision-making (one president decides all) concentrates too much power.

The governance engine provides the tools to navigate this spectrum, enabling organisations to select and combine appropriate decision-making models for different types of decisions.

Selective Involvement

Section titled “Selective Involvement”

Large structures require maintenance. This maintenance can be decentralized by involving different people in different positions in different parts of the system more heavily. The key insight is that not everyone needs to participate in every decision — involvement should be selective and appropriate to expertise and stake.

The Four Elements

Section titled “The Four Elements”

A governance engine is an abstracted representation of a governance structure, formalized into a structure that can be automated on a decentralized network. The basic structure is an activity graph with four element types:

1. Entities

Section titled “1. Entities”

Actors within the system. Users are represented as entities, as are circle and sphere group structures. A circle is governed by simple mechanisms; a sphere can have complex internal governance with assigned roles and positions.

2. Objects

Section titled “2. Objects”

Any piece of data defined within the governance structure. This can be as simple as a mission statement text or as complex as a proposal that gets automatically interpreted and — if passed — executed to perform actions with a treasury account or modify the governance structure itself.

3. Procedures

Section titled “3. Procedures”

A single element of a specific decision making process. It can be initiated by a member of a specific circle or triggered automatically on some condition. During execution, it collects inputs from circle members and uses stored data to determine an outcome. See Democratic Procedures for the full catalog.

4. Connections

Section titled “4. Connections”

Links between the other elements forming the final graph. A procedure might need a circle of participants and a piece of data to execute — these inputs are defined by connections.

Self-Modifying Structures

Section titled “Self-Modifying Structures”

The selection of a decision-making model is itself a decision that uses a majority principle at the most basic level. The way to change the model is to use the existing model to decide upon changes, effectively using small incremental changes to approve new aspects.

This self-modifying capability is one of the key challenges and most powerful features of governance engines.

Challenges

Section titled “Challenges”
  1. Implementing self-changing structures
  2. Flexibly adding and editing procedure packages
  3. Execution without a central point of failure or attack vector

Possible Implementations

Section titled “Possible Implementations”
  1. Smart Contracts hosted on a conventional blockchain
  2. Nested inside a specifically designed blockchain
  3. See Technical Architecture for the full implementation model

Possible Applications

Section titled “Possible Applications”
Section titled “Related Concepts”