Glossary
From this Glossary and Constitution basic, you can learn more about the mechanism of LikeCoin DAO
Basic concepts
LikeCoin DAO
LikeCoin DAO is a decentralized community in cyberspace among content creators and consumers, who collectively own and govern the community.
In blockchain terminology, LikeCoin DAO is a decentralized autonomous organization.
Liker
A citizen in LikeCoin DAO. Each Liker has a unique Liker ID to identify herself. While many Likers are writers, photographers, illustrators, editors and curators, LikeCoin DAO totally welcomes silent content consumers and offers services for them to involve and contribute without creating contents.
Civic Liker
A Liker who delegates at least 5,000 LIKE to the Civic Liker validator node, and distribute the corresponding staking reward via the LikeCoin button. Civic Liker is essentially the tax payer in LikeCoin DAO, enjoying various benefits while at the same time supporting creators.
LikeCoin app
Reader, passport and wallet all integrated in one single app. LikeCoin app is essentially government of the DAO on your palm.
Some tech lovers prefer lower level tools such as command line interface and hardware wallet. It requires significant technical know-how and is beyond the scope of this article.
LikeCoin button
The trademarked hands-clapping button attached to stories, images, illustrations and other creative contents, on which a Liker claps to show her appreciation.
LikeCoin token
Usually called LikeCoin for short, it is the de facto token in LikeCoin DAO. LikeCoin has 3 major uses:
Storing and exchanging value. Used to reward creators, validators, and for payments in general.
Representing the contribution and thus voting power of a _Liker_. The more contribution a Liker makes, the more LikeCoin she receives and the more influential power she has in LikeCoin DAO.
Bridging with other communities and the traditional world. LikeCoin can be exchanged into and from Bitcoin, Ethereum, TWD, HKD and other traditional and crypto currencies. The ticker of LikeCoin is LIKE. Note however that a token trading with the ticker LIKE is not necessarily LikeCoin. Special attention has to be paid to avoid scamming.
LikeCoin chain
A distributed ledger of the open government of LikeCoin DAO. A sovereign, application specific blockchain designed for content creation and information property management, offering high-speed, low cost and most importantly, independence. Data on LikeCoin chain is open and can be visualized on Ping.pub.
The very first beta of LikeCoin chain, code-named KaiTak, was released on Apr 2019 and was upgraded to Taipei on Sept 2019 as the new beta testnet. First public release of LikeCoin chain, SheungWan, was just launched on Nov 15, signaling the establishment of LikeCoin DAO.
LikeCoin chain FoTan, which incorporates advanced features such as International Standard Content Number (βISCNβ), is planned in 2020.
Validator
Operates a set of servers 24x7 to validate all transactions of Likers, including token transfers, content publishing, voting and etc. A validator on LikeCoin chain is both a bank and a senator in LikeCoin DAO.
To start with, validators of LikeCoin chain include National Taipei University of Technology, Taiwan FactCheck Center,Forbole, The Standnews, Culture and Media Education Foundation, Hong Kong Creative Open Technology Association, Matters Lab, GLOs, Enyk Security, UDomain and OurSky.
Mechanism
Token issuance
When LikeCoin was first introduced in 2017, it was an βERC-20 tokenβ issued on Ethereum blockchain. To distinguish from the new standard used in LikeCoin DAO, the legacy token will be stated explicitly as LikeCoin ERC-20 while the new token referred as LikeCoin token or simply LikeCoin.
Following the original LikeCoin whitepaper, there will be up to 2bil LikeCoin in the long run. The LikeCoin is assigned to Token Sale Pool (360,538,485), Ecosystem Development Pool (439,461,515), Team Pool (200mil), and Creators Pool (1bil) for their corresponding usages. 1bil LikeCoin was minted in Genesis for migration from Token Sale Pool, Ecosystem Development Pool, Team Pool, while Creators Pool will be processed in future upgrade.
Migration
As LikeCoin DAO starts to operate, tentatively set on Dec 2 2019, LikeCoin will replace LikeCoin ERC-20 as the official token in LikeCoin DAO, which means content creators will be rewarded in LikeCoin. The 1bil LikeCoin at Genesis was stored in a migration pool and the only way to unlock a certain amount of LikeCoin is to migrate the same amount of LikeCoin ERC-20, on a 1:1 basis. A migration page will be provided for Likers.
When LikeCoin ERC-20 is migrated to LikeCoin, the former will be burnt on Ethereum, so that the total number of LikeCoin plus LikeCoin ERC-20 in circulation remains unchanged.
New LikeCoin will be minted at an inflation rate determined by the validators collectively. The inflation rate was set at 1% at the Genesis of LikeCoin DAO. The newly minted LikeCoin is for rewarding validation of transactions (see Validating Transaction below).
Rewarding creativity. Supporting the commons.
With LikeCoin DAO being a community of content creators and lovers, appreciation of and rewarding for creativity is a core value.
In contrast to Like Button of Facebook and other social media, tapping a LikeCoin button β clapping β provides the corresponding creators with tangible rewards. A content can be clapped by a Liker 1β5 times to reflect the degree of appreciation. Each clap represents a vote for the content, helping the creator receive part of the Creators Pool allocated for that day.
A Civic Liker enjoys higher weighting for her claps, which other than the Creators Pool also distributes all of her own monthly payment to creators on average. LikeCoin button is like an assistant to Likers, helping them micro reward creativity automatically with claps as a signal of appreciation.
Validating Transaction
In order to reach consensus in a community, some trusted parties have to record all transactions. In traditional world, this is performed by banks which charges various fees. In LikeCoin DAO, peer-to-peer transactions in general takes 5 seconds at extremely low cost. Such a system is realized collectively by validators, endorsed by Likers.
Endorsement by Likers is reflected by delegation. When a Liker delegates her LikeCoin to a validator, she is trusting its technical ability, knowledge and integrity, and is letting it represent her. Similar to saving in banks, delegated LikeCoin is still owned by the Liker, but it takes 21 days to undelegate and get back the LikeCoin to oneβs own wallet.
The voting power of a particular validator equals the total amount of LikeCoin delegated to it, since it reflects the level of endorsement it receives from the community. Approximately every 5 seconds, a block is created in LikeCoin chain to record all transactions during the period. Every validator has to agree and sign the block to confirm. If everyone or more than two third of voting power agrees, the block and thus all transactions within it will be confirmed. In this case, all signing validators will be rewarded some newly minted LikeCoin according to their voting power. The newly minted LikeCoin comes from inflation, which is set at 1% at genesis. The rewards are split 50:50 between the validator and the Likers who delegated their LikeCoin.
If, however, a validator does not perform its duty or act maliciously, there will be penalty:
Unavailability. Offline for more than 95% of times in the previous 10,000 blocks, i.e. the validator participated for fewer than 500 blocks in the previously 10,000 blocks. In this case 0.01% of the delegated LikeCoin will be slashed and the validator be βjailedβ, until the validator unjail itself after at least 10 minutes.
Double signing. Validates 2 conflicting blocks at the same time, which is fatal because it allows an amount to be spent twice. In this case, the validator will be permanently removed, and 5% of the delegations will be slashed.
In both cases, delegated LikeCoin from Likers will be slashed at the same ratio. It is important for Likers to delegate only to validators they can trust.
In blockchain jargon, the above mechanism of decentralized consensus is called Byzantine Fault Tolerance (BFT), achieved through Delegated Proof of Stake (DPoS).
Governance
As stated in the very beginning, LikeCoin DAO is collectively owned and governed by the community. A liquid democracy system is designed and deployed upon Genesis to enable the self governance of LikeCoin DAO by all Likers through validators.
Delegation
When a Liker delegates LikeCoin to a validator, not only does the Liker help validating transactions for the network and earns rewards, but the Liker also endorses the validator to raise proposals and vote on behalf of them. A Liker as stakeholder may also decide the amount of LikeCoin to delegate to reflect the level of endorsement, and may delegate to one or more validators. Delegation is like voting in a society under representative democracy but in a more flexible way.
After the LikeCoin chain upgraded to FoTan on August 18, 2021, stakeholders can direct vote for a proposal.
Raising a proposal
Every proposal is a change to the current system. After all, it is not very meaningful to pass a proposal that changes nothing. All validators may raise proposals.
Some aspects of proposals include:
Parameter Change proposal: to change one or more parameters. If accepted, the requested parameter change is updated automatically by the proposal handler upon conclusion of the voting period.
Community Pool Spend proposal: to decide the usage of the community pool
Text proposal: All the proposals that are not covered by the above two types go under this type, e.g.: about governance principle. Examples in the past: 4th proposal about direct democracy implementation, and the 9th proposal about delegation of ecosystem development fund.
By the way, two more proposal types are supported after the FoTan chain upgrade: Software Upgrade Proposal and Cancel Software Upgrade Proposal. See the Cosmos SDK documentation for details.
Any validator can raise a proposal. In order to have a proposal to enter the voting period, 100k LikeCoin has to be deposited within 2 weeks. The deposit may come from other validators and Likers.
In case the proposal fails to get 100k LikeCoin deposit in 2-week time, the proposal will be abandoned and the deposit will be forfeit and go to the Community Pool. The usage of the pool is determined by further proposals.
Voting
Once a proposal reaches 100K LikeCoin, it immediately enters Voting period. All validators and stakeholders may then vote during the one week Voting period. There are four options to every proposal: Yes, No, Abstain and Veto. Veto is to express a βNoβ so strong that the validator believes the proposal should not be proposed in the first place, and should have its deposit expropriated to Community Pool.
During the voting period, if a stakeholder does not agree with the option picked by the validator representing them, they may transfer their delegated LikeCoin to another validator or direct vote to overrule. This is another point that liquid democracy outperforms traditional representative democracy.
Result
The proposal would be implemented if it is passed. It happens when:
Quorum: The voting power (delegated LikeCoin) that participated in the Voting period has passed the minimum percentage 40%
Simple majority: Not counting the abstention votes, there are more votes (>50%) in favour than against.
No veto: Less than 30% voting power has voted a veto.
If the proposal fails to achieve quorum, or gets more than 1/3 voting power as veto, then the proposal will be turned down and the deposited LikeCoin will be expropriated to the Community Pool; else the deposit will be transferred back to the owners.
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