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 in the WSC, 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

Main page: Judicial governance proposal

Overview

Under DGF, anyone can appeal to a DAO to redress any perceived injustice by posting a judicial governance 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 had previously been 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.

Since the Forum is technically a WDAG (weighted directed acyclic graph), judicial governance is technically the process by which the WDAG is reweighted. This judicial governance mechanism is necessary for instituting an evolutionary structure which converges on ever greater security.

Judicial governance in a DAO is fundamentally a matter of approving token ownership in the DAO. The more visible, secondary function of judicial governance is the review of REP token accounts. Judicial governance allows a DAO to re-evaluate REP holdings by slashing accounts that were later determined to have harmed the DAO, or augmenting accounts that had a later positive affect.

Inasmuch as business and social decisions are inevitably flawed, this function is necessary for the long-term stability of a DAO. It is necessary for a mechanism of review to exist. However, in a healthy DAO it will rarely be used, compared with the other two branches of government.

Reputation tokens should be slashed for two basic reasons: first, when members violate explicit protocols, even though the violation was not detected by automated executive policing; second, when members betray the more abstract values the DAO shares which have not been explicitly encoded in automated protocols--transcendent values. Judicial governance also allows more accurate accounting of power after a DAO updates its values or protocols. Judicial governance is therefore fundamental in incentivizing members to behave well, because if it is functioning properly, judicial governance imbues REP tokens with some of the crucial qualities that characterize authentic reputation: future-orientation and non-fungibility.

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.

To achieve Forum revaluations, governmental intervention is required through revaluation primitives, which need to be funded by a governance tax. This overhead is necessary since governance is not directly profitable, but still essential to the long-term stability of the DAO. With DGF, this governance tax can be instituted in a far more transparent and equitable manner with P2P protoocols.