Chief - Detailed Documentation

Electing a Chief contract via an approval voting system

• Contract Name: chief.sol

• Type/Category: Governance Module

• Associated MCD System Diagram

• Contract Source

• Etherscan

1. Introduction (Summary)

The Ds-Chief smart contract provides a method to elect a "chief" contract via an approval voting system. This may be combined with another contract, such as DSAuthority, to elect a ruleset for a smart contract system.

In short, voters will lock up their voting tokens in order to give their votes some weight in the system. The voting is then done by continuous approval voting, where users receive IOU tokens when they lock their voting tokens up, which is useful for secondary governance mechanisms. The IOU tokens may not be exchanged for the locked tokens except by individuals who have actually locked funds in the contract itself, and only up to the amount they have locked.

Governance contract interactions with the system

2. Contract Details

Glossary (Chief)

**DSChiefApprovals provides the following public properties:**

• slates: A mapping of bytes32 to address arrays. Represents sets of candidates. Weighted votes are given to slates.

• votes: A mapping of voter addresses to the slate they have voted for.

• approvals: A mapping of candidate addresses to their uint weight.

• deposits: A mapping of voter addresses to uint number of tokens locked.

• GOV: DSToken used for voting.

• IOU: DSToken issued in exchange for locking GOV tokens.

• hat: Contains the address of the current "chief."

• MAX_YAYS: Maximum number of candidates a slate can hold.

Most of the functions are decorated with the the note modifier from ds-note, meaning that they fire a standardized event when called. Additionally, one custom event is also provided:

• Etch(bytes32 indexed slate): Fired when a slate is created.

3. Key Mechanisms & Concepts

There are two contracts in ds-chief:

1. DSChiefApprovals

2. DSChief, which inherits from DSChiefApprovals.

Key Functionalities (as defined in the smart contract)

DSChiefApprovals

DSChiefApprovals(DSToken GOV_, DSToken IOU_, uint MAX_YAYS_)

• The constructor. Sets GOV, IOU, and MAX_YAYS.

lock(uint wad)

• Charges the user wad GOV tokens, issues an equal amount of IOU tokens to the user, and adds wad weight to the candidates on the user's selected slate. Fires a LogLock event.

free(uint wad)

• Charges the user wad IOU tokens, issues an equal amount of GOV tokens to the user, and subtracts wad weight from the candidates on the user's selected slate. Fires a LogFree event.

etch(address[] yays) returns (bytes32 slate)

• Save a set of ordered addresses as a slate and return a unique identifier for it.

vote(address[] yays) returns (bytes32 slate)

• Save a set of ordered addresses as a slate, moves the voter's weight from their current slate to the new slate, and returns the slate's identifier.

vote(bytes32 slate)

• Removes voter's weight from their current slate and adds it to the specified slate.

lift(address whom)

• Checks the given address and promotes it to s/chief/hat if it has more weight than the current s/chief/hat.

DSChief

DSChief is a combination of DSRoles from the ds-roles package and DSChiefApprovals. It can be used in conjunction with ds-auth (as an authority object) to govern smart contract systems.

Public Functions

DSChief(DSToken GOV_, DSToken IOU_, uint MAX_YAYS_)

• The constructor. Sets GOV, IOU, and MAX_YAYS.

setOwner(address owner_)

• Reverts the transaction. Overridden from DSAuth.

setAuthority(DSAuthority authority_)

• Reverts the transaction. Overridden from DSAuth.

isUserRoot(address who) constant returns (bool)

• Returns true if the given address is the chief.

setRootUser(address who, bool enabled)

• Reverts the transaction. Overridden from DSRoles.

DSRoles

See ds-roles for inherited features.

4. Gotchas (Potential source of user error)

In general, when we refer to the "hat", it can be any address — be it a single-use contract like ds-spell, a multi-use contract or an individual's wallet. Thus, ds-chief can work well as a method for selecting code for execution just as well as it can for realizing political processes.

Example:

The ds-chief could be used as a token-weighted voting system governing another set of smart contracts that uses the ds-auth with ds-roles. In a scenario such as this, "candidates" would consist of contracts changing the state of the smart contract set under governance. Such a contract being elected as ”hat" would be granted all of the permissions to execute whatever changes are necessary. The ds-chief could also be used within such a contract set in conjunction with a proxy contract, such as ds-proxy or a name resolution system like ENS for the purpose of voting in new versions of contracts.

Understanding the IOU Token

The purpose of the IOU token is to allow for the chaining of governance contracts. In other words, this allows you to have a number of DSChief or other similar contracts use the same governance token by means of accepting the IOU token of the DSChief contract before it is a governance token.

Example:

Let’s say there are three DSChief contracts (chiefA, chiefB, and chiefC) and a chiefA.GOV that is the MKR token. If we set chiefB.GOV to chiefA.IOU and chiefC.GOV to chiefB.IOU, this allows all three contracts to run using a common group of MKR.

Approval Voting

This type of voting is when each voter selects which candidates they approve of, with the top n "most approved" candidates being then elected. Each voter can cast up to n + k votes, where k equals some non-zero positive integer. This way voters to move their approval from one candidate to another without needing to first withdraw support from the candidate being replaced. Without this in place, moving approval to a new candidate could result in a less-approved candidate moving momentarily into the set of the elected candidates. Note: In the case of ds-chief, n is equal to 1.

In addition, the ds-chief weighs votes according to the quantity of a voting token that has been chosen to lock up in the DSChief or the DSChiefApprovals contract. It's important to note that the voting token used in a ds-chief deployment must be specified at the time of deployment and cannot be changed afterward.

Implementations

If you are writing a front-end UI for this smart contract, please note that the address[] parameters that are passed to the etch and vote functions must be byte-ordered sets.

Example:

Using [0x0, 0x1, 0x2, ...] is valid but using [0x1, 0x0, ...] and [0x0, 0x0, 0x1, ...] is not. This ordering constraint allows the contract to cheaply ensure voters cannot multiply their weights by listing the same candidate on their slate multiple times.

5. Failure Modes (Bounds on Operating Conditions & External Risk Factors)

• MKR users moving their votes from one spell to another

  • One of the biggest potential failure modes occurs when people are moving their votes from one spell to another. This opens up a gap/period of time when only a small amount of MKR is needed to lift a random hat.

• Lift is not called on spells that have more MKR than the current hat

  • The only way a spell can get the hat is if lift is called on it. So, even if a spell gains much more MKR on it than the hat, if lift is never called on it, the hat will remain on a spell that no longer has the most MKR. This could lower the bar for the amount of MKR needed to pass something, potentially making the system less safe.

• Stray spells without expiration

  • Due to the continuous nature of voting, a spell will remain live in the system even if it was not approved to be the governing proposal. This means that MKR holders can continue to vote on the candidate and in times of lower voter participation there is potential for them to introduce a failure mode by voting for an unexpected and/or older candidate. This illustrates why increased voter participation is important and that a higher amount of MKR on the current governing proposal adds to the stability of the system.

• Unsafe states when migrating to a new chief contract

  • When migrating to a new chief, authority must be transferred to the new contract and revoked from the old. This poses a small coordination problem as the new contract must already have enough MKR on its hat to be safe against governance attacks while the voters enacting the change itself must have enough MKR in the old chief to pass the proposal.