Editing Block producer DAO (section)

=== Governance ===

==== Executive ====
The entire high-level algorithm described above is automated as part of [[executive governance]]. Each vote in each validation pool is an explicit coordination action between the set of all nodes maintaining the blockchain. However, these votes are automated. 

If the node's client software recognizes a block as being properly constructed (lines 53/54), then the client votes to validate. If not, the client votes to reject. If a block is invalidated, the REP encumbered by the block producer in the ASC is slashed. This has the effect of motivating block producers to run the client software unedited/unhacked.

Participation in policing is naturally incentivized by the Validation Pool, which rewards participants with half of all newly minted REP. This also stabilizes the owership of REP as new REP does not all go to the lucky producer who was selected to produce the new block. 

==== Legislative ====
The above description of the algorithm does not include the important aspect of [[legislative governance]]. Continual improvements to the algorithm and software are incentivized since the WSC will include references to fund governance proposals that update the WSC, itself, and any other hard protocols that are improved. As detailed in the legislative governance page, such proposals involve slow and conscious deliberation and voting between members, unlike the automated executive governance of the client software for active block production. Nascent legislative governance is illustrated in the [[Block producer DAO#reference mechanism|coding section]], below.

==== Judicial ====
[[Judicial governance]] under DGF makes it possible to retroactively slash REP that was used to violate the values of the Block producer DAO. This allows the group to implement governance to prevent spirit-of-the-law-violations, such as censorship. Censorship in block production means, for example that a block producer chooses not to include a transaction in a block. Reasons for censorship include arbitrage opportunities such as leaving out votes in the validation pool so those producers don't share in the rewards for policing, manipulating the pseudorandom selection algorithm by leaving out ASCs, and leaving out customers' transactions to arbitrage markets. 

The mechanism for block producer selection detailed above ties all the REP generated by participating in the DAO together. That makes REP slashing increasingly effective as time goes on for disincentivizing Byzantine behavior. That makes the system increasingly secure at time goes on.