Governance
The development direction.

Governance

Acala takes a phased approach to employ various governance mechanisms that will allow it to progressively decentralize and ultimately be commanded by the majority network stakeholders.
We take much inspiration from Polkadot for technical and governance mechanism design, and adapt it to best serve the Acala Network.

Chambers of Acala Governance

The General Council and ACA Referendum are the overarching chambers that govern the Acala Network. The General Council appoints these specialist councils to manage aspects of the network: the Honzon (Financial) Council, the Homa (Staking Liquidity) Council and the Technical Council. The L-DOT Referendum chamber together with the Homa Council would govern the staking liquidity protocol related affairs.

Progressive Decentralization

Phase I: Council Governance

The earliest stage of developing the Acala Network is led by the Acala Foundation, in a way not much different from a normal startup: a great team, lean development, tight execution, and quick learning. There should be no pretense of decentralization
At this stage, decisions of the Acala Foundation regarded the network is made transparent on-chain via appointed General Council voting. All the other councils are appointed by the General Council.
Proposals & Motions
    Submission: only council members can submit a proposal at this phase, and it will be open to the public in the next phase.
    Voting: is continuous (no set time) through motions that comprise of a proposal and required approvals.
    Execution: if a motion is approved, it can be executed using one of the following strategies, made possible by Open Web3 Stack:
      immediately: a super majority is required.
      at a delayed time: specialist councils can cancel an uncontroversially dangerous or malicious motion before it is applied. A simple majority is required.
      gradually: numeric value change motions e.g. increase stability fee can be applied gradually over time reduce disruption. A simple majority is required.
    Durations: all motion durations are set to 7 days in this phase.
General Council
    Desired membership: of the General Council is 5 in this phase, and will be increased in the next phase.
    Tallying: A simple majority of the council can decide the next non-immediately executable motion, a super majority is required otherwise.
    Selection: Appointed by the Acala Foundation.
    Proposals/Motions: Only members of the General Council can submit root call propose e.g. runtime upgrade. Can cancel any uncontroversially dangerous motions via unanimous vote.
Honzon Council
    Desired membership: of the Honzon Council is 5 in this phase, and will be increased in the next phase.
    Tallying: a simple majority of the council can decide the next motion.
    Selection: elected by the General Council via simple majority.
    Proposals/Motions: members can submit Honzon related parameter change proposals. All motions are executed at a delayed time, during which the General Council or Technical Council can uncontroversially dangerous motions.
Homa Council
    Desired membership: of the Homa Council is 3 in this phase, and will be increased in the next phase.
    Tallying: a simple majority of the council can decide the next motion.
    Selection: elected by the General Council via simple majority.
    Proposals/Motions: members can submit Homa related parameter change proposals. All motions are executed at a delayed time, during which the General Council or Technical Council can uncontroversially dangerous
L-DOT Chamber
Technical Council
    Desired membership: of the Technical Council is 3 in this phase, and will be increased in the next phase.
    Selection: elected by the General Council via simple majority.
    Proposals/Motions: can cancel any uncontroversially dangerous motions via unanimous vote.

Implementation

Mandala TC6

Four council chambers have been implemented: General Council, Honzon Council, Homa Council, Technical Council. They currently work alongside with sudo for functionality testing purposes only. 'Real' governance will take effect in our canary network Karura with real stake.
Council Chambers
Dapp
Council Motions
Dapp
We are watching closely good practices and tools for documenting governance proposals, gathering opinions and debates, publishing voting result and execution status etc. As an example, Polkassembly seems to be good place to start, and we might consider integrating or using similar approach for Acala governance.

Phase II: Elected Council + Referendum Governance

Coming soon...

Jurisdictions

Honzon Council Jurisdictions

Loan related parameters
Parameter
Type
Description
Example
InterestRatePerSec
Rate
The extra interest rate per second for specific collateral type. ( the interest rate of BTC = InterestRatePerSec of BTC + GlobalInterestRatePerSec )
BTC: 0.000000001
LiquidationRatio
Ratio
Liquidation ratio for specific collateral type.
BTC: 150%
LiquidationPenalty
Rate
Liquidation penalty rate for specific collateral type.
BTC: 13%
RequiredCollateralRatio
Ratio
Required collateral ratio for opening an loan for a given collateral type.
BTC: 180%
MaximumTotalDebitValue
Balance
Debt ceiling in stable coin(aUSD) for a given collateral type.
BTC: 100,000,000
GlobalInterestRatePerSec
Rate
Base interest rate per second for all collateral types.
0.0000000005
Liquidation and CDP Treasury related parameters
Parameter
Type
Description
Example
ExpectedCollateralAuctionSize
Balance
The expected amount size for per lot collateral auction of specific collateral types.
BTC: 0.1

Homa Council Jurisdictions

    allocation slash compensation either via Homa treasury or validator bond
    blacklist validators through unanimously consent
    define validator selection criteria

General Council Jurisdiction

Less frequently changed parameters and other types of changes are executed via runtime upgrade, which are administered by the General Council for now.
Acala DeX parameters
Parameter
Type
Description
Example
GetExchangeFee
(u32, u32)
Exchange fee rate(the first item in tuple is fee numerator, the second is denominator.)
(5, 1000) ,(ie. 5‰)
TradingPathLimit
u32
The limit for length of trading path.
3, means the trading path such as [BTC, AUSD], [BTC, AUSD, ACA] is valid, but [BTC, AUSD, ACA, DOT] is invalid
Global Stablecoin Parameters
parameter
type
description
example
CollateralCurrencyIds
Vec
The accepted collateral type list.
[XBTC, DOT, LDOT]
DefaultLiquidationRatio
Ratio
Default liquidation ratio if no liquidation ratio set for specific collateral type.
150%
DefaultDebitExchangeRate
ExchangeRate
Initial exchange ratio of debit and aUSD for all collateral type.
10:1
DefaultLiquidationPenalty
Ratio
Default liquidation ratio if no liquidation ratio set for specific collateral type.
15%
MinimumDebitValue
Balance
The min debit value (in stable coin) required by a CDP which has debit to avoid dust.
1
Liquidation and CDP treasury parameters
Parameter
Type
Description
Example
MaxSlippageSwapWithDEX
Ratio
During liquidation, if liquidate collateral on DeX incurs a slippage less than this value, then the system would execute the liquidation on DeX instead of create collateral auction.
5%
Auction parameters
Parameter
Type
Description
Example
MinimumIncrementSize
Rate
Minimum price increment
5%
AuctionTimeToClose
BlockNumber
Auction time to close after each new bid
500
AuctionDurationSoftCap
BlockNumber
When total auction duration exceeds this value, the system will double price increment, and halve auction time to close to expedite the auction
5000
GetAmountAdjustment
Rate
Adjust ACA amount if there is no successful bit in a debt auction
10%
Homa staking liquidity parameters
The Homa is still in draft!!!
Parameter
Type
Description
Example
TargetMaxFreeUnbondedRatio
Ratio
The acceptable max ratio of communal free unbonded DOT amount to total communal DOT amount.
10%
TargetMinFreeUnbondedRatio
Ratio
The acceptable min ratio of communal free unbonded DOT amount to total communal DOT amount.
5%
TargetUnbondingToFreeRatio
Ratio
The target ratio of communal unbonding DOT amount to total communal DOT amount.
1‰
BaseFeeRate
Rate
The base rate fee for Immediately and Target redemption.
5%
DefaultExchangeRate
ExchangeRate
Initial L-DOT to DOT exchange rate
10:1
Validators selection parameters: Note: some of the code is mocked right now until relay chain bridge is available
Parameter
Type
Description
Example
MinBondThreshold
Balance
Minimum L-DOT bonded to elect validator to avoid dust
1 LDOT
BondingDuration
Balance
Duration for unbonding L-DOT
7 Era
MaxUnlockingChunks
u32
Maximum number of unbonding events at a pointing time
7
NominateesCount
u32
Number of validators can be nominated
7

Under Discussion & Development

    Next phase of the governance will involve elected councils and referendum chambers in action, details of which are being designed.More details on treasury will be released as we progress.
    Acala will have multiple treasuries and funds that manage the welfare of the network.
      ACA Treasury holds genesis ACA, manages network income and expenses
      each protocol will have their own treasury for income and expenses
      the Sovereign Wealth Fund will hold surplus contributed from treasuries and purchase reserve according to investment strategies.
    The details of the Homa liquidity staking protocol is being fleshed out, which will have implication on governance.
Last modified 6mo ago