# On-chain Governance System

Backed by blockchain-powered smart contracts, DAOs are decentralized organizations controlled by members and governed by computer-coded rules.&#x20;

In DeWoW Dapp, the currency with the same nature as WoW gold coins is called Token. Token-based arbitration is the most basic DAO member voting mechanism.&#x20;

Anyone who holds Token is a stakeholder of DeWoW, and every stakeholder can participate in the governance of DeWoW DAO.&#x20;

To pass a proposal, a certain number of DAO members must participate in the voting process. If the threshold is met, the decision with the most votes wins, and if the threshold is not met, the proposal fails. This method has limitations. Requiring a certain number of DAO members to vote may mean that most proposals will fail due to low participation. Setting a lower number will make the proposal extremely easy to pass, which may make the DAO Going in the wrong direction.

For this reason, in the process of designing DeWoW, the decision-making method of **Holographic Consensus** is introduced.

{% hint style="success" %}
By ensuring that the decisions of the local DAO conform to the opinions of the global DAO, the overall decision can be made under limited conditions.
{% endhint %}

This kind of decision-making is reminiscent of a hologram, where each small piece of the picture actually contains information about the entire image.&#x20;

Decisions should still be ratified by supermajority by default. Decisions are ratified by relative majority only if **conditions for advancement** are met.

<figure><img src="https://2608773868-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2Fis1hvIqBBwOGokqspW6V%2Fuploads%2Fh3aha96pjObBEFFYzwbe%2F%E5%85%A8%E6%81%AF%E5%85%B1%E8%AF%86.jfif?alt=media&#x26;token=b45487fa-a35a-4b3d-8d99-1ba1f35f2232" alt=""><figcaption></figcaption></figure>

## DAO Genesis Protocol

* **activationTime**: The point (represented in Unix time) in time when psroposing and voting are activated.
* **boostedVotePeriodLimit**: The length of time that voting is open for boosted proposals.
* **daoBountyConst**: This is multiplied by the average downstake on boosted proposals to calculate how large the DAO’s automatic downstake should be.
* **minimumDaoBounty**: The minimum amount of GEN a DAO will stake when automatically downstaking each proposal.
* **preBoostedVotePeriodLimit**: The length of time that a proposal must maintain a confidence score higher than the boosting threshold to become eligible for boosting.
* **proposingRepReward**: The amount of voting power given out as a reward for submitting a proposal that the DAO passes.
* **queuedVotePeriodLimit**: The length of time that voting is open for non-boosted proposals.
* **queuedVoteRequiredPercentage**: The quorum required to decide a vote on a non-boosted proposal.
* **quietEndingPeriod**: The length of time a vote’s potential result needs to stay the same in order to be confirmed as the official result.
* **thresholdConst**: Controls how quickly the required confidence score for boosting goes up as the number of currently boosted proposals rises.
* **voteOnBehalf**:
* **votersReputationLossRatio**: The percentage of a voter’s voting power they stand to lose if they vote against the DAO’s eventual decision on a non-boosted proposal.

For more details and story around each param refer [this article](https://daostack.github.io/DAOstack-Hackers-Kit/stack/infra/genesisProtocol/).

### Staking <a href="#staking-rewards" id="staking-rewards"></a>

For a proposal to pass with a relative majority, it must have sufficient stake in favor of the proposal.

You can use your [**UNK**](https://dewow.gitbook.io/whitepaper_en/token-unk) tokens to stake in favor of or against the proposal. Once the stakes in favor of the proposal reaches the bar it is ready to be boosted.

### Staking Rewards <a href="#staking-rewards" id="staking-rewards"></a>

Following are the possible outcomes of a proposal:

* The proposal expires in queue without any decision: In this case all the stakes are returned to the respective staker.
* The proposal passes:

  `Staker(stake(for) amount)*daoBounty/(total winning stake)`
* The proposal fails: Loosing stake is lost
