4. Community Memberships¶
Table of Contents
In contrast to most crypto-currencies, BitShares does not claim to be a currency but rather an equity in a decentral autonomous company (DAC). As a result, the market valuation of BitShares is free floating and may be as volatile as any other equity (e.g. of traditional companies).
Every entity hold the core token (BTS) is considered a BTS Holder of the BitShares decentralized company.
Nonetheless, BTS tokens can be used as collateral in financial smart contracts such as market pegged assets and thus back every existing smartcoin such as the bitUSD.
Since Bitcoin struggled to reach a consensus about the size of their blocks, the people in the cryptocurrency space realized that the governance of a DAC should not be ignored. Hence, BitShares offers a tools to reach on-chain consensus about business management decisions.
The BitShares blockchain has a set of parameters available that are subject of BTS Holder approval. BTS Holders can define their preferred set of parameters and thereby create a so called committee member or alternatively vote for an existing committee member. The BitShares committee consists of several active committee members.
The BitShares ecosystem has a set of parameters available that are subject of BTS Holder approval. Initially, BitShares has the following blockchain parameters:
- fee structure: fess that have to be paid by customers for individual transactions
- block interval: i.e. block interval, max size of block/transaction
- expiration parameters: i.e. maximum expiration interval
- witness parameters: i.e. maximum amount of witnesses (block producers)
- committee parameters: i.e. maximum amount of committee members
- witness pay: payment for each witnesses per signed block
- worker budget: available budget available for budget items (e.g. development)
Please note that the given set of parameters serves as an example and that the network’s parameters are subject to change over time.
Additionally to defining the parameters any active witness can propose a protocol or business upgrade (i.e. hard fork) which can be voted on (or against) by BTS Holders. When the total votes for the hard fork are greater than the median witness weight w then the hard fork takes effect.
In BitShares, the witnesses’ job is to collect transactions, bundle them into a block, sign the block and broadcast it to the network. They essentially are the block producers for the underlying consensus mechanism.
For each successfully constructed block, a witness is payed in shares that are taken from the limited reserves pool at a rate that is defined by the shareholders by means of approval voting.
Thanks to the funds stored in the reserve pool, BitShares can offer to not only pay for its own development and protocol improvement but also support and encourage growth of an ecosystem.
A blockchain parameter (defined by shareholders through the committee) defines the daily available budget. No more than that can be paid at any time to all workers combined.
The daily budget is distributed as follows:
- The available budget is taken out of reserves pool.
- The budget items are sorted according to their approval rate (
Pro - Con) in a descending order.
- Starting at the worker with the highest approval rate, the requested daily pay is payed until the daily budget is depleted.
- The worker with the least approval rate that was paid may receive less than the requested pay
Hence, in order to be successfully funded by the BitShares ecosystem, the BTS Holders approval for your budget item needs to be highly ranked.
Since the payments for workers from the non-liquid reserve pool result in an increased supply of BTS, these payments are vesting over a period of time defined by shareholders.
Three types of pseudo workers exist that are not primarily used to for salary.
A worker proposal can be used to poll the shareholders for an opinion. Those workers usually have no or very small pay. Additionally, they come with a proposal, recommendation or other topic on which shareholders can publish a binary opinion (pro, or contra).
This worker is used to set an approval limit for worker proposals and their payment by simply refunding his payment/salary to the reserve pool. If its amount of daily pay is as large as the daily available funds, and the worker has highest approval among all worker proposals, all funds will be returned to the reserves and no one will be payed. If, however, an other worker proposal has more votes than the refund worker, the proposal gets paid its salary, and the rest is return.