What’s Up Tornado — Some digging on Tornado.Cash decision making
Let us shed some light on Tornado.Cash decision making processes, combining both on-chain & off-chain governance.
Dear Tornado.Cash citizen, isn’t voting a civic duty?
After mentioning locked tokens in Tornado.Cash governance contract in our last post, we concocted a special supplement just for you.
You will (hopefully) find some interesting information about Tornado.Cash governance & its decision making mechanisms, structured around the difference between on-chain & off-chain governance.
Governance is at the heart of every decentralized protocol and Tornado.Cash does not deviate from this rule.
By principle, for a decentralized protocol to function correctly, the decision making process needs to be put between the hands of its users. Those users form a community that has the right & duty to shape the next versions of the tool they use. Usually, this community has the means to express itself through governance tokens.
In other words, if the protocol was the community’s battlefield, governance would be its weapon & tokens its ammunition.
For the Decentralized Autonomous Organization (DAO) to run smoothly, governance rules need to be clearly specified and cover all potential areas. We just need to take a look at political voting systems around the world to assert that decision making rules have a tremendous impact on the final made decision.
Knowing all this, we all have one question in mind that we will hasten to answer: how does it work for Tornado.Cash?
Let’s Focus On Tornado.Cash
Tornado.Cash decision making is a combination of on-chain & off-chain governance, depending on the scope of the suggested action.
On-Chain Governance …
Tornado.Cash smart contracts are already deployed on the Ethereum blockchain, as well as on Binance Smart Chain, Polygon & xDai chain (so far). Any protocol update must, therefore, go on those blockchains to get encoded.
On-chain governance offers to the community (i.e. TORN holders) the means to implement the desired changes to their protocol. If the community agrees on adding or changing a given feature, the update will only be implemented if the on-chain governance rules are complied with. All those changes must go through proposals. Those proposals can be suggested to Tornado.Cash users & TORN holders directly on ➡️ https://app.tornado.cash/governance, by any eligible community member.
To sum-up Tornado.Cash governance rules:
- TORN tokens need to be locked in the Tornado.Cash governance contract to get used for governance & cannot be unlocked until the end of the proposal;
- A minimum of 1,000 locked TORN is needed to create a proposal on the Tornado.Cash app;
- Community members have a time-lapse of 3 days to vote with their locked TORN;
- A proposal is executed if: (i) a 25,000 TORN quorum is reached, (ii) the number of TORN vouching for the proposal exceeds the number of TORN that are against it;
- Changes agreed on through those governance rules are binding, which means that any user can deploy them after a two-days time-lock and within a period of 3 days.
You can find more information about those governance rules by visiting Tornado.Cash docs.
On-chain governance helps maintain transparency as rules are clearly specified and known by the whole community. It also enables changes & updates to get implemented in a decentralized environment where users are the actual stakeholders of the protocol.
When the power lies in the hands of many individuals, decision making rules are crucial. This is especially true since those binding changes are directly deployed on the Blockchain and impact the functioning of the whole protocol. A wise man once said: with great power comes great responsibility! 🕷🕸
… vs. Off-Chain Governance
However, all decisions made by the community don’t need to go through strict on-chain governance guidelines, locked tokens in contracts & Tornado.Cash proposals system.
Indeed, proposals can only concern specific areas such as changing reward parameters for Anonymity Points or changing certain core mining contracts. A lot of decisions, such as the use of the Tornado.Cash Community Fund or the election of its multi-signature key holders, are made through off-chain governance.
Off-chain governance materializes as forum & social media discussions & votes. Every Tornado.Cash user can clearly express its opinions regarding the future of the protocol or a specific subject. Everyone can participate in the debate. As opposed to the on-chain one, this governance takes place in a more informal way.
To formalize its off-chain governance, Tornado.Cash community used -and will certainly continue using- Snapshot, enabling users to vote with their tokens on a given matter. All TORN -locked and unlocked ones- can be used to vote on Snapshot. This tool allows to get a better consensus on what should be done -or not- on the name of the community.
Afterwards, the made decision isn’t automatically put in place. It needs the intervention of community members or Tornado.Cash team to get coded / put in place & executed. Those decisions aren’t as binding as they are when decided through on-chain governance.