JetGovern: A new horizon for decentralised collaboration
Decentralisation as a scale and not a binary
Jet Protocol was built with the goal of becoming a truly decentralised and censorship-resistant protocol that provides the infrastructure for individuals and institutions to access financial debt instruments on-chain. The distribution of a financial system does not happen in a single leap, but rather takes consistent steps towards an end goal. We believe that all people should have free and open access to their money and financial systems that work in their favour. We see decentralisation as a tool to create sovereignty to establish and sustain the conditions under which people can exercise financial self-determination.
On this path to decentralisation, we recognize that systems are constantly changing and processes are still largely in flux, so a number of strategies must be employed by stakeholders to ensure optimum health of the protocol. Our philosophy on decentralisation is gradually being realised through Jet’s offerings like our fully open-sourced codebase which supports composability, and with the furtherance of our governance module by introducing the on-chain aspect: the Jet Govern app.
Towards decentralised collaboration
Governance encompasses all the processes of decision making within organisations. All types of organisations require a model of governance to define and execute processes such as: who is responsible for certain tasks, how minor and major decisions are assessed and implemented, where authority is vested, etc.
At Jet, a well-composed and strategically maintained system of governance is necessary in order to make decisions on everything – from run-of-the-mill functioning of the protocol, adjustment to policies of the JET token, adding new collateral types, dealing with a crisis or deciding the direction of development and governance itself. Leveraging experience with governance frameworks from first-mover protocols like MakerDAO, we are constructing a truly battle-tested governance ecosystem with all checks and balances in place to sustain growth and development.
At Jet, governance happens on two fronts: off-chain and on-chain
- On-chain Governance — On-chain governance, as the name suggests, employs voting mechanisms on the blockchain through the JET token which is used to represent the user's stake and confer voting rights. On-chain governance allows a broad range of ecosystem participants to propose, vote and have their voices heard and acted upon on key proposals and treasury decisions.
- Off-chain Governance — Off-chain governance is not carried out using blockchain-based voting mechanisms. Therefore, JET token holders do not exercise voting rights in order to decide on proposals. However, there can still be a large degree of community-consensus on proposals before they are presented to the steering committee who will oversee their implementation. At Jet, off-chain governance takes place on the forum where anyone can create a proposal and solicit opinions and votes to reach consensus.
Off-chain governance keeps the protocol nimble and open to change through expert community-led proposals. On the other hand, on-chain governance, administered and maintained through the JetGovern module, can empower all users of interest and other stakeholders to take an active role in the future direction of Jet’s development. The introduction of Jet’s governance module is a significant milestone on this path towards achieving the aforementioned goals.
The Jet Association DAO Structure
The proliferation of DAOs have provided an attractive alternative to traditional collaboration and governance frameworks in DeFi. But what is a DAO? A decentralised autonomous organisation (DAO) is an entity with no central leadership where decisions are made by a community organised around a specific set of rules and governed on the blockchain. Smart contracts establish the rules to be operated on and executed when certain criteria are met. Tokens are used to delegate voting rights in a DAO to stakeholders who are able to create proposals and decide on them. The creation of JetDAO is the natural first step towards activating and sustaining a decentralised community with well-aligned incentives to govern the protocol.
As we advance towards total decentralisation, the JetDAO requires a legal wrapper to relieve members from bearing significant liability for funds and actions. This legal wrapper allows the DAO to partake in activities that it may be otherwise unable to like: interacting with third parties external to the DAO, enter into contracts with digital asset exchanges, hold assets, protect valuable IP of DAO members, etc.
The Jet Association, the Swiss based association and legal wrapper for JetDAO is on a progressive path towards decentralisation which should span several years. To begin, it will be seeded with operating capital from Jet Protocol Holdings, LLC and will employ a core group critical headcount to fill roles including but not limited to:
- Executive Director/President
- Governance Committee
- Regulatory and Compliance
- Marketing and Communications
- Protocol Engineering
- Front-end Engineering
The JetDAO’s initial structure is built to be both resilient and flexible in the face of unpredictable changes within both the regulatory landscape and broader macroeconomic environment and market as well. It starts off as somewhat centralised and will progress to an increasingly decentralised structure over the course of 12-18 months.
The general assembly will be made up of founding members of the Jet Association and is responsible for appointing and creating a governance committee and establishing voting procedures for the governance committee and its members. The general assembly will also act as the intermediary and communicator between the DAO and the LLC. This assembly is made up of Jet Core members to steward the protocol through its early days.
The founding members of the Association, otherwise known as the General Assembly, will appoint two non-Jet Core members to the governance committee as minority token holders. The Jet Core team will hold a majority on the Governance Committee to start. The governance committee or “steering committee” will act as a frontend filter for popular proposals signal voted on within the governance forums.
The committee will analyse these proposals for benefit to the protocol’s health and stability and outline reputational and security risks before the proposals are up for a $JET coin vote. It’s helpful to think of the governance committee as the administrative layer of JetDAO. The initial members of the governance committee will hold this appointment for one year unless otherwise stated or any of the members resign. The fate of the governance committee is also up for vote-based changes from the community.
When the governance committee is fully established, subcommittees will be created to address specific issues and needs within the DAO. These will include risk assessment, grants, etc. These sub-committees can be dissolved by the governance committee when no longer needed.
Core units are the decentralised workforce within JetDAO. These core units will be made up of individuals and groups responsible for specific tasks within the protocol and DAO ranging from parameter changes to protocol, audits, regulatory relations, etc. Core unit members will be compensated directly from the DAO treasury.
All $JET token holders are able to signal vote on proposals within the governance forums as well as participate in JET coin voting within JetGovern provided they are not accessing the interface from a banned jurisdiction.
Good governance drives sustainable growth, ensuring that a protocol continues to survive and thrive by responsibly allocating resources to maintain, adapt, and grow. Community remains the backbone of any project and this is why we encourage members of the Jet community to get involved with governing the protocol to whatever capacity they can. We want as many engaged participants from the community as possible to be able to vote on how the protocol evolves.