This marks the first update of the Factom Council, which will regularly report on its initiatives and responsibilities and may also include relevant information provided by the Factom Director.
After the Q1 ratification of our new governance system, the Factom protocol has since appointed a Director and elected three council members. Where the Director handles strategy and day-to-day operations, the council’s mission is very straightforward: to ensure Factom’s long-term interests are protected through effective, objective oversight.
Concretely, we are here for continuity — a representation of the protocol and its actors. The council strives to become a trustworthy, transparent body for information, and a steward for good, independent relations between all elected entities in the Factom protocol.
Initial Director & Council meeting
The Director and council share a private Discord server and first convened on March 24th to discuss this critical time in Factom history.
“We are working on a structured analysis approach. This will result in changes to how development, marketing and outreach are performed and includes plans to maximize Factom’s chances of success,” says Niels Klomp, Factom Director.
We fully support this approach and look forward to reading the Director’s complete analysis in the coming period.
The ingredients for a healthy dynamic between the Director and council were also discussed, namely:
1. The Director is the executive component and needs autonomy and decisiveness in a process.
2. The Council is the monitoring component and needs to oversee that process against any criteria in governance docs.
New grant system
It was quickly agreed that a new grant system should be the cornerstone process for the above dynamic. A new grant system can be developed in parallel with other work and bring immediate benefits and relief to all parties. The full details will be forthcoming in the next few weeks — the Director is working together with governance editors to amend the currently ratified grant document for a Standing Party vote.
The amendment will focus around the following grant process requirements:
- Open grant system on a rolling basis.
- Authority Node Operators (ANOs) will no longer vote on grant proposals. This will be up to the Director.
- The Director enters negotiations with parties directly and through whatever medium of communication he wishes. The council is privy.
- The council may veto any Director-approved proposals.
- Transparency for ANOs so they trust the process and upgrade the node software confidently.
- Fixed milestone-based payouts and thus fixed factomd releases (expected to be every two months)
- Three types of grants:
Category 1: Core development on a longer term ‘contract’ basis with developers/legal entities. Core developers are hard to come by and need to be relieved of having to resubmit heavily-debated applications every three months. The Director oversees competency and progress. 30–60% of the grant pool (director’s discretion).
Category 2: Request for proposals and milestone based work. This is typically first based on a request for comments (Factom Improvement Protocol). No more three month barriers. Payment will typically be based on milestones. The Director oversees progress and milestone completion. Negotiations for the milestone terms take place between the Director and grantee directly. 25–50% of the grant pool (director’s discretion)
Category 3: Open proposals, innovation project funding. This open proposal category has no predefined rules and is mainly intended to fund projects that can benefit the protocol in the medium to long term, but which might have higher risks of failing or not having a guaranteed return on investment. Mainly designed for new parties, start-ups, projects and/or product ideas coming to the protocol. 10–20% of the grant pool
New forum functionality
In anticipation of these new processes, the council has started initial work to enable council-only votes on the Factom protocol forum should it be required. More specific functionality will be designed as needed over time.
To get our new governance system off to a flying start, the Standing Parties reserved an initial 50k FCT for the council. The director and council have since concluded that, for legal reasons, all allocations will instead move through the new grant system, at least initially. The reserved funds are intact with no current intention to touch them.
Conflict of interest policy
The council has approved a conflict of interest policy in pursuit of its oversight mission. Please find it here. This internal resource is an extension of the council’s mission to protect Factom’s long-term interests by encouraging transparency & objectivity for elected protocol entities.
Simply put, elected parties are asked to report any (potential) conflicts to a dedicated person, who will review the situation and report back to the council. The council then advises on how best to resolve the conflict, and for the majority of cases keeps a publicly accessible record for the community to view.
The policy will be rolled out next month, with an evaluation later this year. While this is completely voluntary, we feel the policy helps protect the protocol, stimulates a greater level of transparency and boosts overall trust for parties to stay engaged with Factom.
A community that is engaged and informed is a healthy community that can grow. For the council, community growth is extremely important and fits our mission. We will therefore start announcing specific initiatives in the coming weeks. These may include:
- a rewards program for active, contributing community members;
- taking incoming community questions for the council and/or director to field at scheduled moments.
In the meantime, we would love to hear from you! Please take a minute to fill out this form and tell us about any great community initiative ideas you might have.