High Performance Blockchain Governance

in #bitcoin4 months ago

Introduction

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Source: Hpb.io, (2021)

Since writing my previous article I have been taking an in-depth dive into the High-Performance Blockchain (HPB) project. Over the past week, I have been sifting through the project whitepaper, website, relevant articles, their Telegram channel, and other social media platforms (all will be linked below). There is so much information to cover so I will examine different parts of the HPB ecosystem in each article I write.

I am like a child with a new toy with HPB, I just want to show it to everyone now, the more I research, the more bullish I become. As I stated previously, I am trying my best to find these low-cap gems which can explode this year. If you have not already read my first article, I would suggest you read it first (Linked below). It provides an in-depth general overview of HPB.

https://steemit.com/blockchain/@cryptoguru1/great-blockchain-project

The Importance of Good Governance on Blockchains

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Source: (Hayase, 2015)

Governance is a hot topic when it comes to blockchains. The difference between decentralised blockchain infrastructures and centralised infrastructures is that we tend to expect centralised entities to evolve to stay current whilst having no input ourselves, whilst in the decentralised blockchain sphere we must be involved in the process. We as cryptocurrency advocates are at the forefront of this decentralised revolution, so we need to have a voice. The passage of time waits for no one entity, so all entities must endeavour to change with the times. Blockchains are no exception to this rule.

Don’t get me wrong, centralisation has its advantages. For instance, if I lose my bank pin, I am not too worried because I know I can resolve this with my bank. However, if I lose my crypto hardware wallet pin and have misplaced my mnemonic seed phrase, I will never see my BTC, ETH, HPB, and other alts again. This is because I am fully responsible for my own assets in this decentralised world.

When it comes to Governance on a blockchain, at first glance it sounds kind of centralised. However, the ramifications of no Governance can mean forking of chains when disputes arise and the founding team pressing ahead with no input from their users. Both of these are untenable in my view, I don’t like this version of decentralisation. Most blockchains today implement some form of Community Governance, this is a model I agree with, you get decentralisation and power as a coin holder.

Decentralisation gives the community more power, in this model we all benefit, not just the single entity as would be the case in a centralised project. Users of blockchains now want to be part of the project’s Governance model. We are seeing this across most blockchain projects today. Petrowski, (2020) states that once coin holders can vote, this gives openness and transparency to on-chain governance. It is of course critical that the majority of coin holders vote so it is not open to fraud. Gonella, (2021) states that Community Governance is called “Progressive Decentralisation”, which in simple English ensures the community can hold the team accountable. I for one am all for this.

High Performance Blockchain Community Governance Model

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Source: Hpb.io, (2021)

Voting itself is an important part of community governance. For the decisions to change important parameters of HPB, we hope that the community can participate” (Xiaoming Wang, HPB CEO, Feb 2020)

HPB, (2021) states that their community governance model was put forward by CEO Xiaoming Wang in an open letter in March 2019, which was the vision to empower the community’s role within the HPB ecosystem. Nitramydes, (2020) states that the road to this governance model began in November 2019, and in December 2019 a community governance platform was released, allowing HPB token holders to make proposals. These proposals were then evaluated and voted on by HPB's management committee at monthly meetings. This was a critical changing point in the HPB ecosystem, HPB promised greater transparency in the project development.

HPB announced their “HPB Community Governance Council” proposal on the 28th of December 2020. What I find interesting here, is that the team made this “public” on this date and actively engaged the community for their views on it before pressing ahead. They then revised the proposal based on input from the community and allowed the community to vote on the “revised proposal” between the 14th-24th January 2021. (Hpb.io, 2021). This shows a truly democratic process.

Fast forward to the time of writing this article and HPB has just finished voting for “the HPB Community Governance Councillors” between the 15th- 20th March 2021 (maybe some coincidence with the insane pump in price around this time?). Everybody who held HPB tokens was eligible to vote. HPB operates their voting system as “1 HPB to 1 Vote” so the more you hold, the more say you have, in theory delivering the best candidate.

This council will ensure the community (node operators, HPB holders, etc…) have their say. The council aims to grow the HPB community and enshrine a truly democratic process in decision-making.

Hpb.io, (2021) further outline, that the HPB council consists of 13 seats. The breakdown of these 13 seats is as follows:

  • 5 seats are held by the Official HPB team, working mainly out of Beijing.
  • 2 seats are held by developer representatives (1 Chinese member and 1 western member).
  • 3 seats are held by node validators representatives (1 Chinese member, 1 western member, and the last from either or).
  • 3 seats are held by community representatives (1 Chinese member, 1 western member, and the last from either or).

There is a clear attempt here to spread the governance through a mixture of stakeholder expertise and from candidates located East to West. This vote will take place annually, so if members do not perform, they can be replaced. To qualify as a candidate for election, a candidate must hold at least 10,000 HPB (for the 1st vote). This is quite a lot for most people in fiat value and thus ensures committed candidates step forward. HPB.io, (2021) states they will adjust this amount as development continues.

Hpb.io, (2021), substantiate their claim of fair governance, by claiming the council (once elected) will further elect a “Prime Member”, this member will coordinate the day-to-day work of the council, call meetings, and ensure the council members carry out their duties. This term ends when the new council is elected. It is important to note here that with this model of governance (as is common with many blockchains), these council members have a single vote on the council, so even if they gain their seats via fraudulent ways, they still cannot gain too much influence.

Voting for council members was carried out via the HPB wallet, in a very similar way holders vote for nodes and on certain proposals (discussed below). It is a weighted voting mechanism. Users simply scan the candidate's QR code they are voting for and send 0.1 HPB to 1 or more candidates. The total HPB in your wallet is effectively your “Stake” and is divided up between your chosen candidates as votes. All HPB used during voting is returned to you via a smart contract execution and you will receive 1 HPB as a reward for voting, further incentivising all HPB holders to vote.

As we know, blockchains are immutable, meaning this process is secure, free from tampering, and means a vote cannot be rolled back, as the result is stored on the blockchain.

HPB Council Vision

The purpose of the HPB council is to:

  • ensure development takes place.
  • ensure decisions are voted on.
  • bring more active community programs.
  • drive growth.
  • entice projects to the HPB blockchain ecosystem.
  • provide training.
  • drive marketing (the area which I feel needs most attention this year).

The HPB council will have an annual budget to achieve all of the above. The council will bring community concerns to the team and will stop poor ideas from going ahead, hopefully, it will also lead to better proposals for growth.

From being exposed to the HPB Telegram group, I know most users are focused on the marketing strategy so I believe this will be a core focus to the newly elected council. There is so much happening besides this, from developers coming up with fun raffle dApps using HPB’s on-board Hardware Random Number Generator (HRNG), to creating a potentially huge dApp about to be announced codenamed “ESR” (see my last article). There are new Facebook and Twitter pages and Reddit is becoming inundated with regular new updates on HPB. The council has a big job ahead of them this year!

Further Voting Mechanisms on the HPB Ecosystem

The community governance of HPB is already well enshrined in the HPB ecosystem, voting is held regularly in the following areas.

Node operators

HPB.io, (2021) states that twice a year, a vote is held to elect node operators. 105 candidates are elected to operate HPB’s network nodes that process and check transactions. It is important to vote for nodes, as the number of HPB “staked/voted” to a particular node by holders, determines how likely they are to get the job of writing a block, thus influencing the block rewards they receive. This is your way as an HPB holder to reward node operators for their hard work.

Elected Nodes

You can also vote for elected nodes, from which you can get rewards if they decide to share block rewards with you (see my previous article for details). Node operators can share 0-100% of their vote-related block rewards with voters. You receive this daily. You can withdraw your votes at the click of a button because there is no lock-up period for this. To put this into perspective if a node shares 100%, then you will receive on average 4% of your voted HPB in rewards over the course of a year (HPB.io, 2021). This is a nice incentive and creates a win-win structure with node operators. You can check this sharing % on the HPB Wallet and decide from there.

Voting on Proposals

The HPB team regularly releases important proposals, which HPB token holders can vote on. These major proposals have a minimum number of community votes requirement, which decides if it passes (usually between 5-20 million - remember 1 vote per 1 HPB held). Amongst other things, users have voted on a coin burn and a staking proposal.

All of this voting is possible through the official HPB Wallet for mobile phones. Alternatively, if you hold HPB on your Ledger or Trezor, you can still vote on nodes and proposals, however, it is not as simple as the official HPB wallet.

Technicalities of the HPB Governance model

HPB’s Proof of Performance (POP) consensus algorithm underpins the entire Governance system of the HPB ecosystem because it decides which HPB-node will write a block, based on that node’s performance indicators. As described in my previous article these are:

  • Network bandwidth (50% weight)
  • Ranking by community votes (35% weight)
  • Number of HPB coins held (15% weight)

As can be seen above, community voting plays a huge part in this! So, community members essentially give the power to the node operators.

This POP consensus strikes a nice balance between POW (where the greatest computer power rules) and POS (where the wealthiest rule). POP enshrines fair governance, holding all nodes accountable to their community.

HPB token holders are a huge part of this consensus model, the more HPB you have in your wallet the more influence you have in voting. The allocation of votes to your chosen node remains as long as your HPB stays in your wallet. This all incentives holding of HPB with the potential to create a kind of virtuous circle.

On-chain governance models like this give HPB holders the means to voice their opinion. This consensus mechanism should ensure forks never occur against the general will of the holders, as proposals are decided on democratically in a fully decentralised manner. This is a perfect example of a blockchain using its native asset token to govern its ecosystem, after all, permissionless blockchains only understand their own assets and care nothing for geographic borders or other limiting factors we are used to in our centralised lives. We are all equal in the eyes of on-chain governance, and HPB has implemented this principle perfectly.

Conclusion

All of the above confirms to me that the HPB team is committed to allowing their community have their say in the running of this ecosystem. The split of “East-West” of council members also confirms to me that HPB is aiming for worldwide marketing and adoption this year, which is huge! This confirms my decision to invest more because I think we are on the cusp of a huge breakout in price! It has already more than doubled in price since my last article! And trading volume has increased a lot.

Guys, this article is one you will look back on in a few years and wonder why you clicked past it. I am already kicking myself for not investing more before my last article due to the price increase! And it is still hugely undervalued! Do not let the opportunity HPB pass you by.

Remember to do your own research, don’t ever buy anything on a whim, read the whitepapers, visit their website and social media platforms. HPB is about to go into overdrive with this new governance council at the helm. I think you will all start hearing about it in more prominent locations than my steemit page shortly.

Pick your winners for the alt cycle guys, HPB is one of mine. I would like to look at other projects too over the coming weeks, can you please message me with ideas? To those who know me on other platforms, feel free to message me there either, and please share my work!

Further information

References

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Great overview of where HPB is up to in terms of community governance structures. Thanks cryptoguru1.

I love the use of references - shows you've really got stuck in!

Thanks very much Gordon

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