On-chain Governance

Introduction

Dive into the inner workings of Telos' Network governance documentation. Governance is a huge strength to the Telos network. Powered by the Telos Decide engine, Telos' governance structure puts network operations in the hands of token holders.

For a full list of Telos on-chain governance documentation, please visit telos.net/governance.

Governance

Telos has a very advanced on-chain governance model. TLOS holders can participate in governance. Besides choosing the block producers, TLOS holders can draft and vote on proposals. The most common proposals include using Telos treasury to fund initiatives around the Telos ecosystem.

The underlying Telos blockchain rules are defined in the system contracts, a smart contract suite defining the core of Telos network. Any change to the system contracts must go through code review, block producer acceptance and governance acceptance (vetoable). Telos Core Developers working on the system contract are chain-funded and can be paid or dismissed based on community voting. Additionally, Telos token holders are less concentrated than many similar chains.

Telos does not have whales and therefore block producers need only convince the broad collective of TLOS token holders of their strong candidacy. Additionally, Telos block producer voting is "inverse weighted" meaning that if you only vote for one or two block producers your votes have less weight than if you vote for 30. This encourages the majority of Telos members to become more educated about block producer candidates and discourages those who seek to vote only for themselves and their affiliates.

Telos maintains minimum standards for block producers to be eligible candidates. These standards are based on security, server capacity, information disclosure, and participation in the public and private testnet. Block producers are required to run two weeks without error on the testnet before going to the mainnet.

These standards will be enforced by smart contract from the time of mainnet activation and any block producer candidate that is not in compliant compliance will not be capable of serving, regardless of votes. All other block producer candidates will automatically rise up the block producer ranks to fill in until the minimum requirements are met.

Below is an example of active ballots being voted on. TLOS holder can review each of these proposal and subsequently vote on them.

The most important proposals are setting the blockchain fees. Currently, there are no fees on TLOS Zero transactions. The table provides a summary of four mainstream blockchains with its respective governance model.

Blockchain	Governance model
Telos	On-chain token-holder voting
Ethereum	Mixed model developer anarchy and miner wars
Binance Smart Chain	Binance dictatorship
Polygon	Polygon team dictatorship

Conflict of interests

As mentioned in the decentralization

Blockchain	Conflict of interest issues
Telos	No conflict due to fair distribution and neutral foundation
Ethereum	No conflict, except if you have your own competing chain (Binance)
Binance Smart Chain	Any centralized exchange has a conflict of interest to integrate BSC
Polygon	Highly centralized and depends on the Polygon founders