Governance and Decentralization – Haven Protocol XHV

Introduction and project history

Haven Protocol takes decentralization seriously. It’s an essential feature of the project, promoting trust, stability, and resilience in a rapidly evolving regulatory landscape. It impacts every part of the project from the code and technology, to the governance and treasury.

Positive enhancements are in the pipeline for each of these areas, but this post will start by looking specifically at the community and core contributors.

The project belongs to the community

The project’s history is well known. The founding developers left the project, leaving the hardest problems unsolved. At this point, the community stepped in and completed the maths and code required to make xUSD and xAssets possible.

As a result, Haven is inherently more decentralized than many other projects. None of Haven’s founders are still involved, so there is no “owner” or “founder”. There have been no VC investments, no pre-mine, and no ICO, so the only gains anyone can make from the project are in the form of holdings or bounties. Key decisions have always been made by finding consensus in the community via discussions, and when needed a vote.

This approach has served us well so far, but our governance process must improve.

As defined in The Path Ahead blog post last year, 2022 is the time to focus on decentralization.

Statement from Dweab

“In Jan 2019, due to my known background in cryptography, mathematics, and software development, I was asked by the Haven Community to take the lead in the community takeover of the project’s development, solve the ‘hard problems’ and pull together a group of people who could deliver the vision of the original team. As a long-term community member and believer in the vision for Haven I agreed.

Although I have never directly made any major decisions for the project it is now time for us as a community to get more people involved in the project development and direction and build out the next phase of governance.

This will help us to grow and adapt to the rapidly changing crypto landscape and create a stronger base for taking the project forward. I will remain involved in the project development for the foreseeable future with the aim of taking a more background advisory role in the oversight council.”

Let’s empower the wider community

Haven’s community is its largest asset. It’s a deep resource of knowledge and expertise, contacts, man-hours, and more. It has consistently organized itself to make fantastic contributions, but there is a clear benefit in doing more to empower and incentivize the community so that the project can move forward faster.

Although the community contributions have been immense, the Havenauts hive mind and energy are still largely untapped. It is the community that allows the project to progress and further decentralize.

Stakeholders

Currently, the groups and stakeholders within the project are as follows.

Core Team – Developers
Core Team – Non – Developers. (i.e. Project management, marketing, content, and communications)
Active contributors (Developers, marketers, etc)
Miners and pool operators
Community managers
Community members/holders

Increasing the number of participating groups will further decentralize the project and add the human resources required to move faster.

The role of the Core Team

As the project grows, the concept of the core team should evolve – so that anyone who wants to contribute, can.

Developers have a clear remit, writing code that maintains and enhances the protocol. Their biggest opportunity to improve is to further embrace open-source principles, in order to attract more contributors.

The role of non-developers, within the core team, should be restructured, to further decentralization and encourage more participation. Their role blurs slightly with “active contributors” and “community managers”. They are all community members striving for the same goals, and in many cases doing similar things – just with different Discord tags. This artificial barrier creates an unhelpful paradigm that can hold back the more active contributors, for a number of possible reasons. They may not feel empowered, not have current information, not know how to access treasury funds, or simply not think it’s a job or responsibility. This leaves more work for the small core team, slowing the project down.

Looking forward we should enhance the concept of the core team, to allow more people to contribute.

Subgroups and Working Parties

Encouraging the community to form stand-alone groups, each with its own objectives, management, and skill-set will build resilience into the project and aid decentralization.

This tried and tested model was proven to be very successful recently with the formation of the Economics Working Party. This group reviewed the tokenomics and optimized the protocol with only little input from the core team. This principle clearly works and should be embraced.

Another group is currently being formed to review the mining algorithm, intending to improve hash rate distribution.

Going forward we should encourage these stakeholder groups to expand, to look more like this:

Oversight committee
Haven Committee
Developers
Trusted custodians
Working groups (Economics, Security, wallets, Marketing, Website etc)
Miners and pool operators
Community Managers
Haven think tank
Community members/Holders

Within this structure, the core team will continue much as they are, but in a more open way. Current core team members will fall into various working groups. E.g.

Dweab – Developer and Haven think tank.
xMattyk – supporting developers with project management.
xJonny_U, MadLentil, and AHawk – Marketing, content, and communication workgroup
Rarecommons – economics, think tank.

As a result, the concept of a core team has evolved and the associated Discord tag is no longer required. It is not in anyone’s best interest for the project to become centralized around the core team. We are all part of the same Haven community.

There are areas where centralization cannot be avoided. The management of domains, websites, GitHub repos, and the treasury vault are all good examples of this. In these cases, trusted groups of individuals will be required to look after these entities, on behalf of the community, with increased transparency.

Historically, some of the core team members have been paid because they are working full time. As the concept of a core team is replaced with a broader range of contributors, we’d hope that more contributors will commit full time to the project and receive pay as well.

Decision making and leadership

Dweab has been seen as the project leader since the community took over in 2020. He’s been instrumental in developing the protocol, but he doesn’t actually lead the project.

His decisions have always been based on the wants and desires of the community. And confirmed through discussion or vote.

To date, this process has been very informal. It has been performed using chats and ad-hoc emoji votes. Long term we aspire to develop robust and fully decentralized mechanisms to empower the community and contributors, based on a committee, DAO, and/or governance tokens.

Community votes in Discord are flawed. Apart from the fact it’s impractical to debate and vote on every issue, they can be skewed by coercion, bots, misinformation etc. For these reasons, it makes more sense that we implement a committee model. A Haven Council has been discussed, where representatives from key areas of the project can make decisions in a decentralized manner, acting in the project’s best interests.

Haven Council

For the project to be decentralized, there can’t be a single leader. All decisions must come from the community.

Specific details of how a council could be run should be determined by a new working party and agreed on by consensus.

We’ve captured below some ideas on how this could work. These are only examples and not a final recommendation. An actual plan will fall out of discussions with the new working party.

Formation

The Haven Council could consist of one or more committees, including representatives from key areas of the project. Nominees must be active community members with at least 1 year in the community. They should have useful skills. I.e. Experience in Crypto / Tech / Development / Economics / Governance / Operations / etc. Appropriate vetting and due diligence will be required for each candidate, which will be assessed against a predetermined and agreed set of conditions

Each nominee should express reasons and value for committee membership. A campaign period will allow each nominee to post their application and run an AMA.

Following this campaign, a vote will be conducted, and council members elected.

By-laws

Simple by-laws should be defined, so it’s clear how the committee should be run. This would cover areas such as:

Length of term
Dispute resolution
Documentation
Required commitment
Re-election processes
Meeting schedules
Use of advisors
Budgeting, expenses, and remuneration

Oversight committee.

An additional oversight committee may be deemed necessary to approve all committee decisions. This is a backstop in case the committee underdelivers. An oversight committee would have no decision-making power but may have the ability to veto bad decisions from the main Haven Committee.

Haven Improvement Programme (HIP)

A bounty system has been planned for many months to encourage contributions.

A decentralized method of defining and scheduling tasks is required to make this possible. The council will do this, allowing jobs to be posted, in exchange for bounties.

Community

Discord is the home of the Haven community – but it should not be directly affiliated with the team. Team members have been admin’s up until now but that will change.

The community managers will be empowered to make Discord the perfect place for the Haven community, so they will take full control.

As a result, community managers have already been made server admins where needed and the team will hand over the ownership keys.

These are amongst the most trusted and hardest working members of the community – and there are no better people to run this server.

The announcement channel will still be used to communicate key messages.

Other areas for decentralization

Ternio Debit card

For regulatory reasons, there has been a change in how the card operation will be structured. Ternio now requires the company backing the debit card to be based in the USA, opposed to the UK as originally intended.

Two community members have already responded to this change, formed a new corporate entity in Delaware, and are working through due diligence procedures to move this forward. This decentralizes the project further as this clearly distances the debit card from the project itself.

Foundation

The Haven Protocol foundation was incorporated in 2021. It was partly envisaged as a useful legal entity, in a crypto-friendly jurisdiction, to help manage the project and promote its interests.

However, a number of regulatory challenges presented themselves during the final stages of set-up. The foundation would have had some benefits, but it too would have risked becoming a point of centralization. For this reason, the foundation set-up has been paused.

If anyone would like to take over the foundation, to support the project’s interests from arm’s length, please feel free to suggest a plan to the community. Otherwise, we expect this to be closed as new and more appropriate structures replace it.

Travala

The original Travala partnership deal was completed in 2020, when Covid was decimating the travel industry. Since then, little progress has been made by Travala. As a result, we have accepted Travala’s wishes to terminate this deal. Our original deposit was refunded last week.

This agreement was signed by a member of the core team. Now that this has been terminated, the project is more decentralized.

Treasury Report

Monthly treasury reports will be published around the end of each month. This process had been interrupted by the hack, as the dollar value of XHV loans were unknown. All loans have now been repaid.

The table below includes a snapshot of the governance vault (as of 21st Feb 2022).

Regular treasury reports will now be published monthly from the end of March.

Decentralization – Next Steps

To help move these plans forward, a number of initial steps have been defined.

Core-Team Discord label will be removed, as alternate working group labels will be used.
Discord server ownership will be handed to community managers.
Working parties will be set up to define processes around the council