Judicial governance
Judicial governance is one of three branches of governance in a DAO. Judicial governance is the means of reviewing past actions and revaluing 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. Arbitration is more immediate, usually requiring an individual judge's decision. Forum revaluation is more deliberate and takes more time, requiring the weighted-democratic consensus of the larger DAO. Forum revaluation changes the REP token holdings of posts in the Forum through leaching and donating references from new validated posts.
Arbitration
Main page: Arbitration DAO
An Arbitration DAO (arbDAO) is a group of judges who resolve disputes that arise in the course of immediate business. In any DAO which employs a work smart contract (WSC), when one or more of the parties is dissatisfied with the execution of the contract, they may trigger an arbitration clause, which transfers the assets encumbered in the WSC to a judge in the arbDAO. The judge then resolves the dispute according to the standards of the arbDAO.
Arbitration is the immediate type of judicial governance. Importantly, the arbitration clause must be triggered before the WSC is concluded. Otherwise the dispute must be resolved by the lengthier review of Forum revaluation.
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. A second basic example of injustice is the opposite: when a past action was not properly rewarded, but later the DAO recognizes it was valuable. Then new REP tokens can be minted and donated to the hero.
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 distribution of power. This second type of judicial governance, Forum revaluation, 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 is 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.