The governance of different decentralized blockchain projects has spawned diversified DAOs. As a governance exploration of new organizational relationships and social structures, DAOs are injecting a steady stream of impetus into the development of Web3.

From public chains such as Bitcoin, Ethereum, REI Network to the DeFi protocols such as Uniswap, DAO has a wide range of forms, and the governance mechanism design is also different. Each DAO has its own terms and conditions. Within the authority, DAO users control the DAO shares and interests that they own and can control, and are able to obtain the benefits of their own participation in governance from it.

REI Network is a typical DAO. The rules of REI Network are open and transparent, such as the total amount of tokens and the consensus method of competitive bookkeeping. Everyone who owns $REI and actively participates in governance and contribution is a “shareholder” of REI Network. When there are more and more “shareholders”, the ecosystem of REI Network will also grow rapidly. “Shareholders” and REI Network promote and achieve each other. The article will interpret the mechanism design of REI Network governance from the four aspects of REI DAO participant identity, participation motivation, network security, governance, and development.

1) Participant Identity

Unlike the complicated and slow mechanism of traditional companies, DAO is like a fully automatic company in which anyone can join and leave at any time. REI Network attaches great importance to the strength of every $REI holder, conducts on-chain governance and establishes a reward mechanism based on an on-chain collaborative management platform (such as snapshot), and listens to the suggestions of the REI community through REI Forum, a community dedicated to REI Network. (https://forum.rei.network/)

For REI DAO participants, there is only one threshold — holding $REI, no matter how much you know about crypto and how many tokens you hold, as long as you actively participate in REI Network on-chain governance, maintain network security, participate in research and explore on-chain solutions, you are able to join REI DAO.

2) Motivation to Participate

The motivation of the DAO’s “shareholders” to participate in the DAO is the key to its success. On the one hand, the participants need to have a “consensus” on the DAO, and on the other hand, the participants will only actively contribute to the DAO if they are fully motivated.

REI DAO has both, in the ecosystem built around REI Network, ecosystem participants obtain computing power through REI in staking, and participate in the competition for bookkeeping rights to obtain block rewards, or realize their thinking about Web3 to become an application on the REI Network, explore the boundaries of REI Network, and get grants. In addition, the development of REI Network is also a reflection of community consensus. REI Network’s rebrand, ecosystem incentives, FreeStake module, and Super Node Elections, all of which are voted by $REI owned by REI DAO participants, which is exactly the “consensus” of REI DAO members.

3) Network Security

PoS is a very powerful consensus mechanism, gradually replacing PoW as the mainstream “consensus mechanism” of public chains. In order to ensure the decentralization and security of REI Network, the mechanism design of REI Network governance still insists on adopting the PoS consensus mechanism, and there are 21 official nodes in the ecosystem to support network operation, storage and calculation. The REI Network Foundation promises to distribute a portion of the tokens (8 million per year for five years) to network security maintainers in the future.

The distribution of tokens is based on the contribution of each node/individual to network security (including the proportion of blocks, the number of staked tokens, participation in community construction, ecosystem development and other dimensions), and weights the value of their contributions (the foundation gives certain vote support). The greater the contribution, the greater the reward, allowing network security maintainers to capture network value over the long term.

4) Network Governance and Development

The development of REI Network is the embodiment of community consensus. “Super nodes” are not only representatives of network security maintenance, but also the core governance team. In order to ensure the security and decentralization of network governance, REI Network adheres to the path of Foundation-Super Node-$REI Holders to promote the decentralized governance of the network.

In the early stage of network development, the foundation plays a leading role in token distribution and network development, and encourages governance contributors who actively participate in network maintenance, network development, and problem-solving to promote their further contributions to REI Network; In the mid-term, the power of the foundation will be delegated to active governance contributors such as Super Modes, and they will organize their respective communities, and finally transfer the network governance power to the active token long-term holders, realizing the fully decentralized governance and development of the network. At this time, the native token of REI Network is the “only ticket” for the community. With the development of the network, the value of the token will continue to grow.

The mechanism design of REI Network governance comes from the REI community, and it is continuously improved with the innovation and development of technology, but the ultimate goal is to decentralize and secure the network, and distribute its value by the platform to community members according to the degree of contribution.

Join the REI Network Community

REI Network is an EVM-compatible public blockchain. As an Ethereum para chain, it owns the features of lightweight, free and dev-friendly. REI Network is to effectively solve the current high-cost and low-efficiency problems of public chains. Therefore, GXChain can achieve free, low-cost development, and rapid migration of applications, and can be shared and symbiotic with the EVM ecosystem, also supporting the development of Defi, GameFi, and NFT.

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REI DAO Governance Mechanism Explained was originally published in REI Network Project on Medium, where people are continuing the conversation by highlighting and responding to this story.