The Horizen Treasury and Voting model is one of the most elegant Decentralized Autonomous Organization (DAO) models in the market. We are very excited to work with IOHK and InfoPulse to deliver a highly complex programmatic solution to the Horizen Treasury System.
As an interim solution, the legal entity for Horizen, allocates 20% of mining rewards to fund integrations, engineering, marketing, research and development, and more. This funding model enables us to continue growing even in a down-market.
No human-in-the-loop: A DAO for fairness & transparency
We previously described the Horizen and IOHK Partnership that is set to deliver two important projects:
- DAO Treasury and Voting proof-of-concept that enables a programmatic approach to allocate resources.
- Horizen Sidechains and Sidechain SDK
The main purpose of the Horizen DAO Treasury and Voting model is to establish a decentralized and censorship-resistant funding mechanism for development and maintenance of the Horizen platform.
This model combines years worth of economic theory and cryptography to alleviate voter apathy. What is voter apathy? Think about the U.S. two-party system. At times, you may or may not agree with the Republican and/or Democrat parties, but you don’t believe a third-party has a chance to win. Therefore, you vote for one of the two instead or abstain from voting.
Think of a voting system that cannot be manipulated, where individuals are paid to vote, and voting results are kept secret until the end. Or a voting system where you can vote to fund projects you value. How will this type of system impact our lives? We believe the Horizen DAO Treasury and Voting model will change the world and be implemented in various types of organizations or even countries!
How does the Horizen DAO work?
- A funding pool is available for proposals. The funding process occurs during a fixed amount of blocks (approximately one month). We’ll define this period as a treasury epoch. In order to vote, Horizen stakeholders will have to lock an amount of ZEN as collateral at the beginning of each epoch. The stake will be kept on a special smart contract address that returns the funds at the end of the treasury epoch. Stakeholders will receive X amount of ballots, proportionally to the stake they have locked up. Stakeholders will not know the value of their stake.
- Anyone can submit a proposal, there will be a small submission fee to discourage spam.
- Eligible Horizen stakeholders review and vote on proposals. Results are hidden using zk-SNARKS cryptography.
- Votes are weighted according to stake and are not public.
- ZEN stakeholders can delegate voting responsibilities to trusted users.
- Ballot results are secret until the winner is announced to ensure fairness.
- Votes are counted. Approved proposals are sorted out in descending order, from the highest positive vote count to the least. The system will fund every proposal in this order until it reaches 90% of the funding pool.
- The remaining 10% of the funding pool is allocated to reward voters. At the end of the treasury epoch, the locked funds (stake) is returned to the voters along with their respective compensation (proportional to their stake) for participating in the voting process.
When is the ZenDAO going live?
The team is evaluating the framework to implement the treasury voting system. The Horizen engineering team will likely use Scorex, the framework used to develop the voting system. By using the same framework, the Horizen team will prevent rewriting the crypto library into another language and reducing errors in translation and potentially saving time.
Our engineering team is architecting the treasury implementation. Initial plans are to integrate the voting prototype into the sidechain architecture and modify the treasury to use an SDK, which will likely be written in Java. In parallel, the Horizen engineering team will use the SDK for the on-chain Secure Node and Super Node implementation.
We are excited to be in the forefront of development and bringing fairness to public blockchain governance! Let us know what you think about this research!
Understanding The ZenDAO
Learn more about the design of the Horizen DAO from Prof. Roman Oliynykov, Team Veritas manager for IOHK.