Swarm’s fundamental goal is to democratize investing. Liquid Democracy is a key aspect of the Swarm platform that empowers members of the Swarm network to participate in the decisions of the Swarm foundation.
As promised, now that our public token sale has concluded, the first vote on the Swarm Liquid Democracy platform has gone live today (October 30) as of 14:00 UTC at vote.swarm.fund. This is the opportunity for Swarm token holders to participate in their first voting process.
This post sheds light on the details of what this vote is about and how the process works.
What this vote is about
This vote will be about establishing the liquidity parameters for the Swarm Token (SWM). It will take place from October 30 14:00 UTC to November 6, 23:00 UTC.
As pointed out in our white paper, Swarm tokens are not immediately tradable. In order to prevent problems related to wild speculation, we developed a process to increment the liquidity of Swarm Tokens in stages. The original plan was to increase the Token liquidity in 8 tranches, 42 days one apart from the other. This meant that, from the moment the sale ends, every 42 days ⅛ of your total tokens would become transferable. So you would have been able to achieve 100% liquidity in 336 days.
However, we decided to use the liquidity parameters to empower the people from the very first moment. We are now asking Swarm members to vote on one of these four alternatives for liquidity:
- 8 releases of 42 days each
- The original plan. Allows a six week product delivery cycle with potential press to coincide with each release. Total liquidity is about 11 months.
- 42 releases every 8 days
- Same amount of time as no. 1 but more frequent.
- 16 releases every 42 days
- Extends the time to approximately two years instead of one.
- 4 releases every 84 days
- Same amount of time as no. 1 but less frequent.
We picked these four alternatives because we wanted to test the idea of decentralized voting systems and provide the ability for greater community input.
How the voting system works
To cast your vote, you will have to go to vote.swarm.fund. You will be asked for the ethereum address you hold your tokens on. A prompt should display the total amount of tokens you own. The vote is proportional to the amount of Swarm tokens held, meaning that the more tokens you have, the more your vote counts. This is common practice in any company governance structure.
After having specified your ethereum address, you will see a voting ballot. You will have to express your preferences by assigning a score to each alternative, from -3 (strongly against) to +3 (strongly in favour). This kind of voting is called Range Voting, and we opted for this solution because range voting is mathematically immune to many of the drawbacks of standard voting systems.
Once you express your preference, your voting ballot will be automatically encrypted (with a key publicly available), and you will be asked to sign it using Geth, MyEtherWallet or similar platforms. Once you sign your ballot, your encrypted preference will be added to the Swarm Vote Smart Contract.
Once the voting window closes a secret key will be published, allowing the contract to be decrypted. At this point each person’s preferences will be retrieved, weighted according to the amount of tokens that person holds, and summed together. The alternative with more points will be chosen as the liquidity parameter for SWM Tokens, and implemented as such shortly after.
Note that our voting procedure is end-to-end verifiable, meaning that everyone will be able to verify that no manipulations have taken place, at any stage. Moreover, the ballots are encrypted until the voting window closes, limiting the impact of strategic voting (knowing how the vote “is going” before it ends means that people willing to manipulate the outcome may have information to use to maliciously steer the preferences of who still has to vote).
The voting procedure is not anonymous. When the voting window closes and the contract is decrypted, everyone will be able to see how each person’s cast their preferences. There are two reasons for this: first, this makes strategic manipulation more difficult: If someone lies, saying to vote for something but instead voting for something else, people will be able to see this; second, having open votes will make the authorities able to verify that people are actively taking part in Swarm administration. This is crucial for the Swarm token to pass the Howey test.
This is only the first in a long series of votes that will take place on the Swarm Platform. Swarm is partnering with SecureVote to build a comprehensive, secure and fast voting platform, that will seamlessly interact with Swarm Smart Contracts. This platform (currently in development) will be hosted on a second layer blockchain for security and technical reasons: Implementing the voting system directly on the Ethereum blockchain would be slower, less secure and more expensive. SecureVote did a lot of research to optimize governance for ICOs, and Swarm will benefit from the great expertise they maturated in this field. Stay tuned for more information!