Judicial governance

Judicial governance is one of three branches of governance in a DAO. Judicial governance is the means of reviewing past actions and revaluating their worth. Under DGF, the two main types of judicial governance are arbitration and Forum revaluation. Arbitration allows conscious intervention to adjust the standard automated outcome of a smart contract. Forum revaluation changes the REP token holdings of posts in the Forum through leaching and donating references.

Arbitration

Main page: Arbitration smart contract

The basic type of judicial governance is arbitration. Arbitration allows a DAO to review the automated outcome of a work smart contract (WSC). The "code is law" assumption of Web3 makes such review difficult in a primary DAO. Nevertheless, the code is law standard is necessary when a DAO allows open access to pseudonymous members.

However, rigid contracts following code is law are not good for business. Business contracts demand all parties perform in a predictable manner under assumptions about the future business environment. However, no one can predict the future. Business must be able to continue when an eventuality occurs that was not anticipated in the smart contract. Parties to the smart contract must be able to come to some consensus on what is fair in those circumstances. The existence of a meaningful reputation system motivates the parties to behave as well as possible. But sometimes, even if both parties are behaving with the best intentions of honoring the spirit of good business, irreconcilable differences in perspective about what is fair are inevitable. In such cases a third party is necessary to adjudicate and resolve the dispute.

To achieve this type of judicial governance in a primary DAO while respecting the standard of code is law, the WSC must therefore include a clause that allows any party in the smart contract to trigger a sub-contract, called an arbitration smart contract (arbSC).

When arbSC is triggered, the WSC sends all its encumbered REP tokens, fees, and other property to the arbSC, which then follows the basic work flow of DGF. Specifically, the arbSC then calls arbitrator(s) from the arbDAO to do the work of the arbSC. This means the arbitrators follow the established arbDAO protocols for resolving a dispute between parties to the WSC. The arbitrators were first selected (usually randomly) by the arbSC from the currently functioning availability smart contracts (ASCs) from the arbDAO bench. Once the work of arbitration is finished off chain, the arbSC concludes by submitting evidence of its work to the Forum for recording and initiates a Validation Pool to disburse the fees and mint new arbREP.

The arbSC will typically itself include a clause which allows unsatisfied parties to trigger another arbSC, iteratively according to the standards set by the original WSC.

Forum revaluation

Under DGF, anyone can appeal to a DAO to redress any perceived injustice by posting a proposal in the Forum. This leads to a review of the current state of REP holdings and may lead to REP redistribution by the mechanisms discussed in this section.

A basic example of perceived injustice includes punishing actions that were rewarded in the past, but are now perceived as harmful to the DAO. For instance, if a corrupt smart contract was accidentally instituted in a DAO with a bug that siphoned REP tokens to the perpetrator, then Forum revaluation can be used to remove those tokens from the perpetrator and burn them, or donate them to a worthy member.

Each DAO records its history in its Forum, which is a collection of posts linked by weighted references. Together with the initial values of the posts (as determined by the Validation Pool that mints the REP for each post), the references determine the overall REP distribution in the DAO--i.e., the overall distribution of power in the DAO. This second type of judicial governance redistributes power from one post to another. This redistribution is achieved by making a new post which has new references to the posts which need to be revaluated. If the new post is validated and supported by REP-weighted democracy through the Validation Pool mechanism, then the redistribution will be achieved.

Forum reference mechanisms

Main page: Forum reference mechanisms

The specific reference mechanisms which support judicial governance under DGF are leaching and donating. Combined with an incinerator function, these primitives are complete, in the sense that using only those functions, any possible Forum WDAG can be re-weighted in any way desired.

Governance tax

To achieve Forum revaluations, governmental intervention is required through revaluation primitives.

??reword: A basic principle of REP governance through the Forum reference mechanism is that REP actually doesn't cost anything directly. Revaluation is just a function of a certain percent of all new posts to tie REP minting and burning to real cash. If every Work SC is required to use a fixed percent g of the new REP minted with it to do governance then all Work REP is still the same value as any other contract. If no governance needs to happen at a particular moment then the g percent can be burned to keep that contract the same value as others and the price of governance is still bound by g percent. The DAO should in general be happy when REP is burned instead of redistributed by governance, even the particular worker as long as every SC does the same, because it means the REP they do have is more valuable. It all works out following the quantity theory of money that if you have the same proportion of total tokens then you have the same proportion of power and reward, whether the absolute number of tokens is up or down.

UIs can automatically calculate the estimated present value of our tokens based on the tokenomics formulas, to give users a sense of what the tokens mean without requiring the users to make the mental estimates.