Transforming governance: enabling scalable and adaptable decentralized networks on EVM-compatible blockchain
This article explores scalable and adaptable governance through decentralized networks, enabling collective decision-making and evolution without necessitating a complete system overhaul when original functionalities become obsolete. It delves into the utilization of interconnected Smart Contracts o...
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pp_isofts_kiev_ua-article-6562025-02-13T20:28:48Z Transforming governance: enabling scalable and adaptable decentralized networks on EVM-compatible blockchain Трансформація управління: створення масштабованих та адаптованих децентралізованих мереж на основі evm-сумісного блокчейну Katerynych, L.O. Veres, M.M. Riabov, K.S. Decentralized Autonomous Organization; Decentralized Governance; WEB3; Role-Based Access System; Ethereum; Blockchain; Solidity UDC 004.738.5 + 005.8 УДК 004.738.5 + 005.8 This article explores scalable and adaptable governance through decentralized networks, enabling collective decision-making and evolution without necessitating a complete system overhaul when original functionalities become obsolete. It delves into the utilization of interconnected Smart Contracts on the EVM-based blockchain to resolve foundational governance issues. However, the principal advantages are compromised if the system requires continual redeployment to adapt to environmental changes. We introduce a solution that combines a role-based access system and a modular system contracts architecture to enhance the system's scalability and adaptability. This approach allows for modifications and scaling at any time through community proposals and voting, catering to the specific needs of its members and eliminating the need for manual configuration by a centralized entity for new modules or functionalities. Members can propose configuration parameters for a new module, and with community majority approval, the system can adapt and scale, safeguarding the interests of its members, provided there is cooperation within the majority of the community.Prombles in programming 2024; 2-3: 351-358 Ця стаття досліджує масштабоване та адаптивне управління через децентралізовані мережі, що уможливлює колективне прийняття рішень та еволюцію без необхідності в повному перебудовані системи, коли первинні функціональні можливості стають застарілими. Розглядається використання взаємопов'язаних Смарт-контрактів на блокчейні, базованому на EVM для вирішення фундаментальних проблем управління. Проте, основні переваги компрометуються, якщо система потребує постійного перевидання для адаптації до змін у середовищі. Ми представляємо рішення, яке поєднує систему доступу на основі ролей та архітектуру системи модульних контрактів для підвищення масштабованості та адаптивності системи. Цей підхід дозволяє вносити зміни та масштабувати систему у будь-який час через спільні пропозиції та голосування спільноти. Водночас існує можливість врахування конкретних потреб учасників і уникнення необхідності вручну конфігурувати нові модулі або функціональні можливості централізованою сутністю. Учасники можуть пропонувати параметри конфігурації для нового модуля і за підтримки більшості у спільноті адаптувати систему та здійснювати масштабування, захищаючи інтереси своїх учасників за умови співпраці більшості у спільноті. Prombles in programming 2024; 2-3: 351-358 Інститут програмних систем НАН України 2024-12-17 Article Article application/pdf https://pp.isofts.kiev.ua/index.php/ojs1/article/view/656 10.15407/pp2024.02-03.351 PROBLEMS IN PROGRAMMING; No 2-3 (2024); 351-358 ПРОБЛЕМЫ ПРОГРАММИРОВАНИЯ; No 2-3 (2024); 351-358 ПРОБЛЕМИ ПРОГРАМУВАННЯ; No 2-3 (2024); 351-358 1727-4907 10.15407/pp2024.02-03 en https://pp.isofts.kiev.ua/index.php/ojs1/article/view/656/708 Copyright (c) 2024 PROBLEMS IN PROGRAMMING |
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Decentralized Autonomous Organization Decentralized Governance WEB3 Role-Based Access System Ethereum Blockchain Solidity UDC 004.738.5 + 005.8 |
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Decentralized Autonomous Organization Decentralized Governance WEB3 Role-Based Access System Ethereum Blockchain Solidity UDC 004.738.5 + 005.8 Katerynych, L.O. Veres, M.M. Riabov, K.S. Transforming governance: enabling scalable and adaptable decentralized networks on EVM-compatible blockchain |
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Decentralized Autonomous Organization Decentralized Governance WEB3 Role-Based Access System Ethereum Blockchain Solidity UDC 004.738.5 + 005.8 УДК 004.738.5 + 005.8 |
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Katerynych, L.O. Veres, M.M. Riabov, K.S. |
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Katerynych, L.O. Veres, M.M. Riabov, K.S. |
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Katerynych, L.O. |
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Transforming governance: enabling scalable and adaptable decentralized networks on EVM-compatible blockchain |
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Transforming governance: enabling scalable and adaptable decentralized networks on EVM-compatible blockchain |
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Transforming governance: enabling scalable and adaptable decentralized networks on EVM-compatible blockchain |
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Transforming governance: enabling scalable and adaptable decentralized networks on EVM-compatible blockchain |
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Transforming governance: enabling scalable and adaptable decentralized networks on EVM-compatible blockchain |
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transforming governance: enabling scalable and adaptable decentralized networks on evm-compatible blockchain |
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Трансформація управління: створення масштабованих та адаптованих децентралізованих мереж на основі evm-сумісного блокчейну |
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This article explores scalable and adaptable governance through decentralized networks, enabling collective decision-making and evolution without necessitating a complete system overhaul when original functionalities become obsolete. It delves into the utilization of interconnected Smart Contracts on the EVM-based blockchain to resolve foundational governance issues. However, the principal advantages are compromised if the system requires continual redeployment to adapt to environmental changes. We introduce a solution that combines a role-based access system and a modular system contracts architecture to enhance the system's scalability and adaptability. This approach allows for modifications and scaling at any time through community proposals and voting, catering to the specific needs of its members and eliminating the need for manual configuration by a centralized entity for new modules or functionalities. Members can propose configuration parameters for a new module, and with community majority approval, the system can adapt and scale, safeguarding the interests of its members, provided there is cooperation within the majority of the community.Prombles in programming 2024; 2-3: 351-358 |
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Інститут програмних систем НАН України |
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2024 |
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351
Програмування для комп'ютерних мереж та інтернет
УДК 004.738.5 + 005.8 http://doi.org/10.15407/pp2024.02-03.351
L. Katerynych, M. Veres, K. Riabov
TRANSFORMING GOVERNANCE: ENABLING SCALABLE
AND ADAPTABLE DECENTRALIZED NETWORKS ON
EVM-COMPATIBLE BLOCKCHAIN
This article explores scalable and adaptable governance through decentralized networks, enabling collective
decision-making and evolution without necessitating a complete system overhaul when original functionalities
become obsolete. It delves into the utilization of interconnected Smart Contracts on the EVM-based block-
chain to resolve foundational governance issues. However, the principal advantages are compromised if the
system requires continual redeployment to adapt to environmental changes.
We introduce a solution that combines a role-based access system and a modular system contracts architecture
to enhance the system's scalability and adaptability. This approach allows for modifications and scaling at any
time through community proposals and voting, catering to the specific needs of its members and eliminating
the need for manual configuration by a centralized entity for new modules or functionalities. Members can
propose configuration parameters for a new module, and with community majority approval, the system can
adapt and scale, safeguarding the interests of its members, provided there is cooperation within the majority
of the community.
Key words Decentralized Autonomous Organization, Decentralized Governance, WEB3, Role-Based Access
System, Ethereum, Blockchain, Solidity
Л.О. Катеринич, М.М. Верес, К.С. Рябов
ТРАНСФОРМАЦІЯ УПРАВЛІННЯ: СТВОРЕННЯ
МАСШТАБОВАНИХ ТА АДАПТОВАНИХ
ДЕЦЕНТРАЛІЗОВАНИХ МЕРЕЖ НА ОСНОВІ
EVM-СУМІСНОГО БЛОКЧЕЙНУ
Ця стаття досліджує масштабоване та адаптивне управління через децентралізовані мережі, що умож-
ливлює колективне прийняття рішень та еволюцію без необхідності в повному перебудовані системи,
коли первинні функціональні можливості стають застарілими. Розглядається використання взаємопо-
в'язаних Смарт-контрактів на блокчейні, базованому на EVM для вирішення фундаментальних про-
блем управління. Проте, основні переваги компрометуються, якщо система потребує постійного пере-
видання для адаптації до змін у середовищі.
Ми представляємо рішення, яке поєднує систему доступу на основі ролей та архітектуру системи мо-
дульних контрактів для підвищення масштабованості та адаптивності системи. Цей підхід дозволяє
вносити зміни та масштабувати систему у будь-який час через спільні пропозиції та голосування спі-
льноти. Водночас існує можливість врахування конкретних потреб учасників і уникнення необхідності
вручну конфігурувати нові модулі або функціональні можливості централізованою сутністю. Учас-
ники можуть пропонувати параметри конфігурації для нового модуля і за підтримки більшості у спі-
льноті адаптувати систему та здійснювати масштабування, захищаючи інтереси своїх учасників за
умови співпраці більшості у спільноті.
Ключові слова: Decentralized Autonomous Organization, Decentralized Governance, WEB3, Role-Based
Access System, Ethereum, Blockchain, Solidity.
.
1. Introduction
Navigating decision-making on the In-
ternet poses a significant challenge in estab-
lishing a robust system where members cannot
manipulate outcomes and only eligible parties
can participate. On another side, it was im-
portant to prevent 'double-spending' problem,
so users cannot reply the same action again and
again in order to get a benefit. The solution to
© Л.О. Катеринич, М.М. Верес, К.С. Рябов, 2024
ISSN 1727-4907. Проблеми програмування. 2024. №2-3
352
Програмування для комп'ютерних мереж та інтернет
the problem was proposed by the adoption of
the Bitcoin [1]. However, it did not allow cre-
ating a complex governance structures with
custom rules that cannot be omitted.
The adaptation of Smart Contracts [2,
3] on the Ethereum network has addressed this
issue, operating under the principle of 'code is
law' [4]. While this approach serves smaller
communities and projects focusing on straight-
forward financial management effectively, it
struggles with continuously evolving systems
that need to adapt to real-world trends and
changes.
Ethereum, inherently a perpetually
evolving protocol, enables the development of
a diverse ecosystem of commercial products,
allowing community interaction and participa-
tion in decision-making processes. A prevalent
instance is the creation of platforms, known as
Decentralized Autonomous Organizations
(DAOs), where community members or inves-
tors can influence the project's trajectory in the
WEB3 sphere. Given the irreversible nature of
user actions and Smart Contracts in Ethereum,
significant modifications to the contract logic
are challenging, and manual upgrades through
a Proxy Upgrade pattern [5] can be risky. Con-
tracts also face a size limitation, hindering
scalability when the available space is ex-
hausted. Additionally, the inability to adapt to
new products and protocols in the Ethereum
ecosystem can render older DAOs obsolete.
To address these limitations, a modular
architecture incorporating a role-based access
system is essential, allowing seamless integra-
tion with new protocols and functionalities
without redeploying the entire system. This ap-
proach not only eliminates the need for system
redeployment and reconfiguration but also em-
powers the community to modify the system's
functionality through voting, ensuring security
and sustainability as long as the majority ac-
tively cooperate.
2. Role-Based Access
System
This article introduces a Role-Based
Access System (RBAS) serving as a pivotal
connector between system components, estab-
lishing a set of rules that delineate access to
system resources. These rules are designed to
be transparent and comprehensible to commu-
nity members, offering enhanced flexibility to
the system.
Where each community member or the
system itself can be considered an Entity that
performs specific Actions on resources.
In the prevalent Ethereum ecosystem,
most contracts depend on account addresses to
determine resource access, a method that re-
stricts the system to specific addresses. This
limitation becomes problematic in systems
with numerous contracts, confining them to
precise implementations that cannot be easily
and securely modified.
RBAS, in contrast, abstracts resource
access to parties with specific permissions,
granted through community voting, simplify-
ing the management of system component re-
lationships. It centralizes all access rules, un-
like traditional approaches where access to
protected functions requires extensive contract
code analysis. Despite the additional gas us-
age, RBAS compensates by facilitating a more
manageable and adaptable system.
By leveraging RBAS, which grants
permissions through community voting, man-
agement of system components is simplified
and adaptability is enhanced. For example, in
Corporate Governance [6], implementing
RBAS in DAOs illustrates how it can supple-
ment traditional business structures, enabling
dynamic, decentralized regulatory solutions
and showcasing a compliant approach to man-
aging corporate entities.
The core capability of the RBAS is its
ability to assimilate external modules while
maintaining tight control over them and ensur-
ing that the integrated components conform to
the control protocols established in the system.
This integration is key to extending and diver-
sifying the functionality of the system, allow-
ing the inclusion of various components such
as DAO bridges, Uniswap, Treasuries and
other elements that require the influence of
DAO management.
In practical terms, this means that any
component, once integrated, automatically
adapts to the rules and protocols of system
management, inheriting established norms and
operational frameworks. This integration is
critical for consistency and uniformity across
the system, ensuring that all components, re-
gardless of their origin and nature, operate
353
Програмування для комп'ютерних мереж та інтернет
within a common governance structure, reduc-
ing the risks associated with inconsistencies
and non-compliance.
In essence, integrating external mod-
ules using RBAS not only enriches the ecosys-
tem with diverse functionality, but also
strengthens the governance structure by ensur-
ing uniformity and compliance across all com-
ponents. This is an example of a balanced syn-
ergy between extension and governance, al-
lowing the system to evolve and adapt while
maintaining its underlying principles and in-
tegrity..
2.1. Roles, Resources, Entities, Actions,
and Permissions
Our proposed solution initiates with the
delineation of roles, resources, entities, ac-
tions, and permissions within the system, as
illustrated in Fig. 1.
Fig. 1. Role, Resource, Permissions
Model.
Entity (𝖤𝖤): An individual or component that in-
teracts with the system.
𝘌𝘌 = {𝑒𝑒1, 𝑒𝑒2, … , 𝑒𝑒𝑛𝑛}
Action (𝘈𝘈): An operation performed by an en-
tity on a resource.
𝘈𝘈 = {𝑎𝑎1, 𝑎𝑎2, … , 𝑎𝑎𝑛𝑛}
Permission (𝘗𝘗𝘗𝘗𝘗𝘗𝘗𝘗): A set of rules determining
access to the system's resources, either
allowing or denying such access.
𝘗𝘗𝘗𝘗𝘗𝘗𝘗𝘗 = {𝘢𝘢𝘢𝘢𝘢𝘢𝘗𝘗𝘢𝘢𝘢𝘢, 𝘗𝘗𝘗𝘗𝘳𝘳𝘗𝘗𝘢𝘢𝘢𝘢}
Resources (𝖱𝖱𝖱𝖱𝖱𝖱): A set of functions grouped
either as a Smart Contract (𝒮𝒮𝒮𝒮) or as functions
within an SC.
𝘙𝘙𝘗𝘗𝘙𝘙 = {𝒮𝒮𝒮𝒮1, 𝒮𝒮𝒮𝒮2, … , 𝒮𝒮𝒮𝒮𝓃𝓃}
Role (𝘙𝘙𝘙𝘙𝘙𝘙𝘗𝘗): An amalgamation of one resource
and one or more permissions, structuring
relationships within the system in a simple yet
effective manner.
𝘙𝘙𝘙𝘙𝘙𝘙𝘗𝘗 = 𝘙𝘙𝘗𝘗𝘙𝘙 × 𝘗𝘗𝘗𝘗𝘗𝘗𝘗𝘗
To enhance efficiency and
optimization, we used the concept of a group
abstraction.
Group (𝘎𝘎𝘗𝘗𝘢𝘢): A compilation of members
sharing identical roles.
𝘎𝘎𝘗𝘗𝘢𝘢 = {𝑔𝑔1, 𝑔𝑔2, … , 𝑔𝑔𝑘𝑘}
Instead of granting roles directly to
members (ℳ), they are role assigned to
groups.
∀𝑔𝑔 ∈ 𝘎𝘎𝘗𝘗𝘢𝘢, ∃𝘙𝘙𝘙𝘙𝘙𝘙𝘗𝘗𝑔𝑔 ⊆ 𝘙𝘙𝘙𝘙𝘙𝘙𝘗𝘗
ℳ ∈ 𝘎𝘎𝘗𝘗𝘢𝘢 ⇒ ℳ ℎ𝑎𝑎𝑎𝑎 𝘙𝘙𝘙𝘙𝘙𝘙𝘗𝘗(𝘎𝘎𝘗𝘗𝘢𝘢)
Consequently, a member’s inclusion in a group
bestows upon them all the permissions
allocated to that group.
Essentially, a group operates as an
array to which a specific role can be granted.
Consequently, each member within this array
inherits the permissions associated with the
group, allowing for a streamlined allocation of
roles and permissions, as illustrated at Fig. 2.
Fig. 2. Group-Based Role Allocation.
This structured approach sets the stage
for defining the core properties and formal
guarantees of the RBAS system.
2.2. Core Properties and Formal
Guarantees
The systematization above not only
streamlines internal relationships but also
ensures a structured approach to resource and
permission allocation. This allows us to extract
the following properties:
Role Assignment: Each entity 𝑒𝑒 ∈ 𝐸𝐸 is as-
signed one or more roles, which collectively
354
Програмування для комп'ютерних мереж та інтернет
determine the actions they are authorized to
perform on resources:
∀𝑒𝑒 ∈ 𝘌𝘌, ∃𝘙𝘙𝘙𝘙𝘙𝘙𝘦𝘦𝑒𝑒 ⊆ 𝘙𝘙𝘙𝘙𝘙𝘙𝘦𝘦
Permission Enforcement (𝘗𝘗𝘦𝘦𝘗𝘗𝘗𝘗𝘙𝘙𝘗𝘗𝘗𝘗): For an
entity 𝑒𝑒 to perform an action 𝑎𝑎 on a resource 𝑟𝑟,
the entity must possess a role that includes the
corresponding permission:
𝘗𝘗𝘦𝘦𝘗𝘗𝘗𝘗𝘙𝘙𝘗𝘗𝘗𝘗(𝘦𝘦, 𝘢𝘢, 𝘗𝘗) ⇒ ∃𝘙𝘙𝘙𝘙𝘙𝘙𝘦𝘦𝑒𝑒 ∋ (𝑟𝑟, 𝑎𝑎)
Access Control Function (𝘈𝘈𝘈𝘈𝘈𝘈𝘦𝘦𝘈𝘈𝘈𝘈): An access
control function 𝘈𝘈𝘈𝘈𝘈𝘈𝘦𝘦𝘈𝘈𝘈𝘈 verifies whether an
entity 𝑒𝑒 has the necessary permissions to per-
form an action on a resource 𝑟𝑟:
𝘈𝘈𝘈𝘈𝘈𝘈𝘦𝘦𝘈𝘈𝘈𝘈 = { 𝘵𝘵𝘗𝘗𝘵𝘵𝘦𝘦,
𝘗𝘗𝘢𝘢𝘙𝘙𝘈𝘈𝘦𝘦,
𝑖𝑖𝑖𝑖 ∃𝘙𝘙𝘙𝘙𝘙𝘙𝘦𝘦𝘦𝘦 ∋ (𝑟𝑟, 𝑎𝑎)
𝘙𝘙𝘵𝘵𝘰𝘰𝘦𝘦𝘗𝘗𝘰𝘰𝘰𝘰𝘈𝘈𝘦𝘦
By combining the core properties and system
promytives, we are achieving the following
formal garanties:
Correctness and Consistency: The RBAC sys-
tem ensures that only authorized actions are
performed, preventing unauthorized access
and modifications and ensuring that role as-
signments and permissions are uniformly en-
forced across all actions:
∀(𝑒𝑒, 𝑎𝑎, 𝑟𝑟) 𝑖𝑖𝑖𝑖 𝘈𝘈𝘈𝘈𝘈𝘈𝘦𝘦𝘈𝘈𝘈𝘈(𝘦𝘦, 𝘢𝘢, 𝘗𝘗) = 𝘵𝘵𝘗𝘗𝘵𝘵𝘦𝘦
𝑡𝑡ℎ𝑒𝑒𝑒𝑒 𝘗𝘗𝘦𝘦𝘗𝘗𝘗𝘗𝘙𝘙𝘗𝘗𝘗𝘗(𝘦𝘦, 𝘢𝘢, 𝘗𝘗)
The RBAC system, as formalized
above, provides a robust framework for man-
aging access and permissions within the decen-
tralized network. It ensures that every action is
authorized, maintaining the integrity and secu-
rity of the system while allowing for scalability
and adaptability. The subsequent sections will
elucidate its application within the context of a
DAO.
3. Modular Smart Contracts
Architecture
To construct a system capable of
scaling indefinitely, a modular System
Contract architecture is imperative, aligning
with the standards proposed by Nick Mudge in
ERC-2535 [7]. Given the restrictive 24KB [4]
contract size limitation, this architecture
organizes a collection of Smart Contracts
under the ERC-2535 standard to accommodate
extensive systems.
Each system component is a distinct
module or contract, enabling the DAO to
integrate with a myriad of protocols within the
Ethereum ecosystem and incorporate new
functionalities with static addresses. This
modularity negates the need for users to
navigate through multiple System Contracts to
locate specific functionalities provided by
individual Smart Contracts within the system.
The DAO is essentially defined as:
𝐷𝐷𝐷𝐷𝐷𝐷 = {𝑆𝑆𝑡𝑡𝑆𝑆𝑟𝑟𝑎𝑎𝑆𝑆𝑒𝑒, {𝑚𝑚𝑆𝑆𝑑𝑑1, 𝑚𝑚𝑆𝑆𝑑𝑑2, … , 𝑚𝑚𝑆𝑆𝑑𝑑𝑝𝑝}}
Where the 𝑆𝑆𝑡𝑡𝑆𝑆𝑟𝑟𝑎𝑎𝑆𝑆𝑒𝑒 represents the state
of the DAO and a 𝑚𝑚𝑆𝑆𝑑𝑑𝑖𝑖, 𝑖𝑖 ∈ {1 … 𝑝𝑝} is a
distinct component or contract within the
system.
The adaptability inherent in Modular
Smart Contracts Architecture allows DAOs to
seamlessly integrate or modify modules,
ensuring continuous compliance with evolving
disclosure regulations and aligning with the
transparency and consumer protection needs of
the decentralized finance ecosystem [8].
As visualized in Fig. 3, the actual data
is housed in the main entity, which, in this
instance, is a DAO. This main entity uses
specific delegate calls to interact with and
utilize the functionalities provided by separate
entities, referred to as facets.
Fig. 3. Modular Smart Contracts
Architecture Diagram.
4. Governance Structure
Traditional governance modules
predominantly rely on the voting power of
community members, represented through
various means such as the quantity of ERC-20
[9], NFT [10], ERC-1155 [11] tokens or native
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currency locked within the system. For a
proposal to gain acceptance, it must achieve a
requisite quorum and a majority of votes.
However, as governance expands with
increasing user participation, the likelihood of
suboptimal decisions escalates. To mitigate
this, we introduce an Expert Group, comprised
of members with the authority to veto specific
community-selected proposals and to initiate
expert-specific proposals, necessitating an in-
depth understanding of the system.
Formally Expert Group (𝘌𝘌𝘌𝘌𝘌𝘌𝘌𝘌𝘌𝘌𝘌𝘌) is a
set of entities with special permissions:
𝘌𝘌𝘌𝘌𝘌𝘌𝘌𝘌𝘌𝘌𝘌𝘌 = {𝑒𝑒1, 𝑒𝑒2, … , 𝑒𝑒𝑘𝑘} 𝘸𝘸𝘸𝘸𝘸𝘸𝘌𝘌𝘸𝘸 𝑒𝑒𝑖𝑖 ∈ 𝐸𝐸
This additional protective layer aims to
reduce the risk of system stagnation by
ensuring that decisions are meticulously
scrutinized and are reflective of informed and
expert opinions, thereby enhancing the
robustness and reliability of the governance
structure.
At every level of the governance
structure, from the creation to the execution of
proposals, the community diligently works to
uphold the security and stability of the system,
as illustrated in Fig. 4. This visualization
depicts the community's commitment to
preventing any disruptions and ensuring the
continuous, smooth operation of the system.
Fig. 4. Layers of Governance.
Employing a multi-layer strategy is a
prudent governance practice adopted by
various protocols within the Ethereum
ecosystem to bolster system security [12, 13].
4.1. Insights into the Voting
Mechanism
The voting process (𝖵𝖵𝖵𝖵), in its most
comprehensive configuration, is bifurcated
into two pivotal phases: voting and vetoing.
The uniqueness of this process is attributed to
the concept of the ‘voting situation,’ a set of
parameters defining the target module of the
proposal and specifying the entities endowed
with the authority to veto the proposal.
4.1.1. The Role of Veto
in Governance
The veto process is integral to the
governance of the DAO, acting as a protective
mechanism to halt proposals that may diverge
from the DAO’s foundational principles and
constitution. This process is reserved for
Experts, appointed during the DAO
governance process, and serves as a safeguard
to ensure the alignment of all proposals with
the DAO’s values and objectives.
Experts during the voting phase, assess
the proposals based on their adherence to the
DAO. If a proposal is deemed detrimental or
misaligned with the DAO’s interests, they can
exercise their veto power to prevent its
implementation, thereby preserving the
integrity and values of the organization. The
veto right can be described as following:
𝘝𝘝𝘸𝘸𝘝𝘝𝘝𝘝𝘝𝘝𝘝𝘝𝘝𝘝𝘸𝘸𝘝𝘝(𝘝𝘝𝘝𝘝, 𝘸𝘸) = {1,
0,
𝑖𝑖𝑖𝑖 𝑒𝑒 ∈ 𝘌𝘌𝘌𝘌𝘌𝘌𝘌𝘌𝘌𝘌𝘌𝘌
𝘝𝘝𝘝𝘝𝘸𝘸𝘸𝘸𝘌𝘌𝘸𝘸𝘝𝘝𝘰𝘰𝘸𝘸
4.1.2. Voting and Veto
Configuration
The voting process within a DAO is a
fundamental mechanism allowing Members or
Experts to participate in decision-making by
voting on various proposals. This process is
highly configurable, allowing for
modifications to proposal types and associated
settings, such as quorum and majority, through
the parameter voting.
Voting power (𝘝𝘝𝘌𝘌) is determined by the
number of locked tokens in the DAO.
𝘝𝘝𝘌𝘌(𝘸𝘸) = tokens locked by 𝑒𝑒
Therefore,
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𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉ℎ𝑉𝑉(𝑉𝑉𝑉𝑉, 𝑉𝑉) = { 𝘵𝘵𝘵𝘵𝘵𝘵𝘵𝘵,
𝘧𝘧𝘧𝘧𝘧𝘧𝘧𝘧𝘵𝘵,
𝘝𝘝𝘱𝘱(𝑉𝑉) > 0
𝑉𝑉𝑉𝑉ℎ𝑉𝑉𝑒𝑒𝑒𝑒𝑉𝑉𝑒𝑒𝑉𝑉
To ensure a proposal's validity, it must
meet a specified quorum (Q), which is the
minimum number of votes required.
𝑄𝑄 = ∑ 𝘝𝘝𝘱𝘱(𝑉𝑉)
𝑒𝑒∈𝐸𝐸
× 𝑞𝑞𝑒𝑒 where 𝑞𝑞𝑒𝑒 ∈ [0,1]
Additionally, it should not be vetoed by
more than n experts in the ExpGrp. The veto is
true if more than 𝑛𝑛 experts decide to veto the
proposal:
𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉(𝑉𝑉𝑉𝑉, 𝑉𝑉)
= { 𝘵𝘵𝘵𝘵𝘵𝘵𝘵𝘵,
𝘧𝘧𝘧𝘧𝘧𝘧𝘧𝘧𝘵𝘵,
𝑉𝑉𝑖𝑖 ∑ 𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉ℎ𝑉𝑉(𝑉𝑉𝑉𝑉, 𝑉𝑉)𝑒𝑒∈𝘌𝘌𝘌𝘌𝘱𝘱𝘌𝘌𝘵𝘵𝘱𝘱 > 𝑛𝑛
𝘰𝘰𝘵𝘵𝘰𝘰𝘵𝘵𝘵𝘵𝘰𝘰𝘰𝘰𝘧𝘧𝘵𝘵
The system offers three types of voting:
Partially Restricted, Restricted, and Non-
Restricted Voting, each serving different
purposes and allowing various levels of
participation from experts and the community.
When a proposal is submitted, entities
cast their votes. The validation of a proposal
depends on meeting the quorum and veto
criteria. If the condition is satisfied, the
proposal passes and is executed; otherwise, it
fails.
𝐸𝐸𝐸𝐸𝑉𝑉𝐸𝐸𝐸𝐸𝑉𝑉𝑉𝑉(𝑉𝑉𝑉𝑉) = 𝘵𝘵𝘵𝘵𝘵𝘵𝘵𝘵, if
∑ 𝘝𝘝𝘱𝘱(𝑉𝑉)
𝑒𝑒∈𝐸𝐸
≥ 𝑄𝑄 𝑎𝑎𝑛𝑛𝑎𝑎 𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉(𝑉𝑉𝑉𝑉) ≠ 𝘵𝘵𝘵𝘵𝘵𝘵𝘵𝘵
𝑉𝑉𝑒𝑒𝑒𝑒𝑉𝑉 𝘧𝘧𝘧𝘧𝘧𝘧𝘧𝘧𝘵𝘵
Ultimately, due to its modular
architecture, any default functionality can be
expanded, exemplifying the system's
scalability and adaptability. For instance,
features such as the ability to retract a vote can
be seamlessly integrated.
5. DAO Architecture
This article explores a governance
system designed to adapt and scale within an
ever-evolving environment, referred to as a
DAO within the Ethereum community. For
effective DAO operation, the integration of
key components such as Permission Manager,
Vault, Voting, Member Storage, and
Parameters Storage is essential. The
integration of these components, as outlined in
Fig. 5, forms the fundamental structure of the
DAO, enabling optimal performance and
efficient scalability while maintaining core
functionality.
Fig. 5. Core DAO Framework.
These components will be discussed in
detail in the following subchapters.
5.1. Permission Manager
The Permission Manager Module is a
foundational component of the DAO,
grounded in RBAS theory, and serves as the
nucleus for recording and storing permissions
and groups. It is pivotal for integrations and
upgrades, acting as the gateway for all
interactions with the DAO, ensuring a
structured and secure interface. Efficiency is
crucial, as every segment of the system
interacts with this module, with the modular
architecture and unified shared storage
significantly reducing costs and lowering gas
usage when accessing internal storage.
5.2. Vault
The Vault component is the entry point
to the DAO Governance System, where users
deposit tokens to engage in governance
activities. It secures tokens during voting
periods and releases them post-voting to
prevent governance attacks like double-voting
or vote manipulation. By delegating the
locking mechanism to the Vault, the system
supports a wide range of tokens, enhancing
versatility and inclusivity. Its modular
architecture allows for the easy integration of
new tokens and functionalities, such as ERC-
5484 [14], ensuring a secure and reliable
voting environment and reinforcing the overall
governance structure.
5.3. Voting
The Voting component orchestrates the
voting process, allowing community members
to initiate proposals and cast votes while
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enabling Experts to exercise veto power. It is
intricately linked to the Permission Manager to
validate eligibility for initiating votes, casting
votes, and vetoing. The component uses a
generic interface to configure key voting
parameters such as quorum, majority, and
duration, managing both community and
expert proposals. It interacts with Member
Storage for veto functions and Parameter
Storage to adjust voting parameters. By
managing permissions through RBAS, the
voting module adapts to new functionalities
and ensures structured, secure governance,
making it the cornerstone of the system's
governance activities.
5.4. Member and Parameter
Storages
The Member and Parameter Storage
modules are crucial for the DAO, optimizing
efficiency for components like the Voting and
Permission Manager. Member Storage
organizes and manages Experts, acting as a
whitelist for community-elected members.
Parameter Storage manages DAO parameters,
simplifying the adjustment and monitoring of
system settings. The modular architecture
allows for the seamless integration of new
functionalities post-deployment, enhancing
the governance structure through RBAS. This
integration reduces complexity, improves
auditability and transparency, and contributes
to a coherent and manageable governance
system.
5.5. Module Integration Flow
Combining the different modules
results in a robust system that can be easily
scaled up. Thus, including the AirDrop module
requires one proposal from the community, as
shown in Fig. 6.
Due to the modular smart contract
architecture, the new AirDrop module can be
easily integrated into the DAO core, allowing
access to the entire DAO storage. In addition,
the RBAS ensures that this module is
simultaneously integrated into the DAO
governance system. This means that any
configuration desired by the DAO can be
achieved, such as a configuration where only
experts manage the new module. However, the
initial adoption of such rules is subject to
community approval.
Fig. 6. Example of Practical Module
Integration
5.6. System Properties
Sumarizing all the components de-
scribe above; our system gains two importan
guarantees:
Liveness: As soon as the system is
updated with new modules, it remains actual
and relevant. Formally, for any module
(modi), if (modi) is integrated at time (t),
then the system state (S) reflects the
integration at (t + ϵ):
∀𝑚𝑚𝑚𝑚𝑑𝑑𝑖𝑖, ∃𝑡𝑡 such that integrated (𝑚𝑚𝑚𝑚𝑑𝑑𝑖𝑖, 𝑡𝑡)
⇒ 𝑆𝑆(𝑡𝑡 + 𝜖𝜖) = updated
Safety: With a guarantee from the
voting process and the RBAC system, the
system stays secure, ensuring that only
authorized and secure actions are allowed.
Formally, for any action 𝑎𝑎 on resource 𝑟𝑟 by
entity 𝑒𝑒, if the action is performed, then 𝑒𝑒 has
the necessary permissions:
∀𝑒𝑒 ∈ 𝐸𝐸, ∀𝑎𝑎 ∈ 𝐴𝐴, ∀𝑟𝑟 ∈ 𝑅𝑅, 𝘗𝘗𝘗𝘗𝘗𝘗𝘗𝘗𝘗𝘗𝘗𝘗𝘗𝘗(𝘗𝘗, 𝘢𝘢, 𝘗𝘗)
⇒ 𝘈𝘈𝘈𝘈𝘈𝘈𝘗𝘗𝘈𝘈𝘈𝘈(𝘗𝘗, 𝘢𝘢, 𝘗𝘗) = 𝘵𝘵𝘗𝘗𝘵𝘵𝘗𝘗
These properties ensure that the DAO
remains functional and secure, adapting to
changes while maintaining strict access
controls.
6. Conclusion
This article has presented a scalable
and adaptable governance system on the
Ethereum network, designed to circumvent the
inherent limitations of the Ethereum protocol.
The foundation of this system is the RBAS,
which orchestrates the interactions between
various components within a DAO. However,
RBAS alone is insufficient to overcome the
constraints related to Smart Contract size and
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the immutable nature of contract logic post-
deployment inherent in the Ethereum protocol.
To address these challenges, we
introduced a modular system architecture,
allowing the DAO to expand and integrate a
diverse range of modules while maintaining
coherent governance. This modular approach,
coupled with the Expert governance structure,
enhances the security and reliability of the
system, ensuring robust protection against
potential vulnerabilities.
We have also delineated a core set of
components essential for initiating the
functionality of the DAO, laying the
groundwork for a system that is not only
scalable and adaptable but also secure and
governed with precision and transparency.
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Одержано: 10.04.2024
Внутрішня рецензія отримана: 19.02.2024
Зовнішня рецензія отримана: 08.03.2024
Про авторів:
1Катеринич Лариса,
кандидат фізико-математичних наук,
доцент
http://orcid.org/0000-0001-7837-764X .
1Верес Максим,
кандидат фізико-математичних наук,
доцент.
http://orcid.org/0000-0002-8512-5560.
1Рябов Кирило,
студент.
https://orcid.org/0009-0003-4118-8492.
Місце роботи авторів:
1 Taras Shevchenko National University of
Kyiv
тел. +38-044- 259-05-11
E-mail: katerynych@gmail.com
https://csc.knu.ua/uk/department/iss
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