Callisto's Path to Democracy

As we transition to Proof of Stake, Callisto Network introduces a pivotal proposal: the Callisto On-chain Democracy (COD). This proposal, awaiting community discussion and approval, marks a significant shift towards a more democratic and participatory governance model.

We encourage the community to engage in this process actively, shaping the future of Callisto Network together.

The Callisto Improvement Proposal (CLOIP) will be available soon on GitHub.

Modern Theory of Democracy

In the annals of human history, the quest for a genuine democratic system, often termed the ‘holy grail’ of societal governance, has remained elusive.

First, consider the very etymology of the word ‘Democracy.’ Derived from ancient Greek, ‘Dēmokratía’ breaks down into “Dêmos,” meaning “people,” and “Kratos,” which translates as “power.”  Democracy, thus, literally signifies “power to the people.”

Wikipedia describes Democracy as a system of government in which state power is vested in the people or the general population. Yet, in contemporary democratic models, a critical distinction arises: people elect representatives rather than voting directly on matters that affect their lives. They entrust a select few with the authority to make decisions on their behalf, effectively handing over a blank check for a stipulated period. 

History, however, reveals a striking constant: power, when concentrated, often tends to centralize further. As a result, in numerous so-called ‘democratic’ structures, the voice and choice of individuals get overshadowed, leading to hyper-centralized governance where the collective voice weakens. This is where the fusion of genuinely democratic values and innovative blockchain technology addresses these challenges.

By nature, transparent and decentralized, blockchain offers the potential to reimagine democratic governance. Although 13 years have passed since the inception of blockchain technology, the vision of an on-chain democracy remains unrealized, and we can see it with today’s most popular blockchains being controlled by a few entities. 

Callisto Enterprise aspires to change that narrative. By proposing a vision of a decentralized voting system and synergizing it with the Callisto Network Treasury, we aim to pioneer a truly democratic system where power belongs to the “Dêmos.”

“At each stage of human existence, the adult man is off on his quest of his holy grail, the way of life he seeks by which to live.” Clare W.Graves

Why Decentralized Governance on Callisto Network?

I. Decentralized From Day 1

 Callisto Network’s coin (CLO) distribution is an example of decentralization benefiting from a coin distribution across 62,500,000 wallet addresses, establishing it as the blockchain of choice for true blockchain governance:

  • No Initial Coin Offering (ICO): Callisto Network began its journey without using the controversial ICO scheme.
  • Pre-Minted for Airdrop: Callisto Network pre-minted CLO coins specifically for airdrop to the Ethereum Classic community, ensuring a fair and wide-reaching launch.
  • No Pre-sales or Early Investors: Traditional investment channels have been avoided.
  • Mining and Cold Staking: 90% of the coins were minted and distributed through Mining and Cold Staking, with the remaining 10% allocated to the Callisto Network Treasury.

As of January 2024, the Callisto Network’s top three wallets include the Cold Staking smart contract, which is controlled by the community and holds 36% of the circulating supply, followed by exchange wallet, which accounts for 6%, and closely by the SOY Finance liquidity pool, which holds 4.6% of the circulating supply.

II. Callisto Network Treasury

Implemented since the launch of Callisto Network, the Treasury is a unique feature of the network, allowing for regular income, avoiding traditional investment channels tending to centralization, and allowing for further decentralization in the CLO coin distribution:

  • Consistent Treasury Funding:  The Treasury receives 10% of the block reward. Initially set to 620 CLO, the block reward has been reduced to 77.76 CLO with the introduction of the new monetary policy; therefore, the Treasury receives 7.76 CLO at every block.
  • Halted Founders’ Salaries:  With the introduction of Callisto Enterprise in 2021, the founder salaries from the Callisto Network Treasury, as mentioned in the original Callisto Network Whitepaper, ceased.

This innovative treasury model has sustained Callisto Network during its initial phase, enabling it to navigate through two bear markets—proof of its robustness and effectiveness.

III. A Revolutionary Proof Of Stake Model

After relying on the Proof of Work consensus for five years, Callisto Enterprise has been inspired by the Ethereum PoS model. It has been redesigned to propose a truly decentralized Proof of Stake model.

Setting the stake threshold at 200,000 CLO lowers the barriers to entry and promotes broader participation. This encourages more users to run nodes  and, therefore, increases the value of the network, the CLO coin, and the impact of the treasury, enhancing the network’s long-term viability. 

Democracy relies on the active involvement of individuals in the decision-making process. Similarly, the Web 3.0 digital era should be characterized by an active and decentralized participation of its users, ensuring a robust and equitable digital future for all.

Callisto On-chain Democracy (COD)

As a sibling of Ethereum and Ethereum Classic, Callistonians have witnessed a hard fork’s transformative and divisive effects on an ecosystem and its community.

Driven by a vision to empower the community, granting them complete control over the network’s direction, Callisto On-chain Democracy’s core objectives encompass:

  • Overseeing the smooth implementation of upgrades.
  • Facilitating the adoption of innovative consensuses.
  • Managing the emission and distribution of new coins.
  • Strategic allocation of funds from the Callisto Network Treasury.

Callisto Enterprise’s vision is an environment where every network participant’s voice is valued, significantly impacting decision-making. While we believe in unconditional decision-making rights, we also recognize the need for solid checks and balances. These measures are designed to prevent any majority from unilaterally impacting the network’s health or unfairly exploiting the Callisto Network Treasury. 

The aim is to ensure a fair, inclusive, and secure platform where the interests of the community as a whole are protected.

Proposal Submissions

Through the Callisto Improvement Proposals (CLOIP), all community members are invited to participate in the network’s life, instilling a sense of collective ownership. By integrating this transparent, user-friendly process with decentralized governance, we project a global democratic experience.

  • A nominal fee of $20 will be required for each proposal submission to Callisto Network. This fee strikes a balance between accessibility for proposers and the need to maintain the integrity of the governance process.
  • The collected fees will be allocated to the Callisto Network Treasury, contributing to the network’s development and sustainability.

Voting and Nodes Participation

With the upcoming Proof Of Stake consensus, CLO coin holders can become validators by engaging 200,000 CLO coins. In addition to guaranteeing network security, node holders are empowered to vote on Callisto Network Improvement Proposals and, therefore, the treasury fund allocation.

In this democratic system, every node will be granted an equal vote based on the One Node, One Vote principle.

Callisto Network Governance Mechanism

  • Proposal Submission Process: Community members are encouraged to submit well-reasoned proposals via a dedicated platform. Each proposal should specify its intention, the expected results, and the expected funding.
  • Thresholds for Consideration: A dynamic upvote threshold ensures that only pertinent proposals advance. To be considered, a proposal must be endorsed by 1/3 (minority fraction) of active participants from the previous voting session.
  • The Voting Dynamics: When a proposal meets the requisite endorsements, all nodes are granted a voting token pertinent to that proposal. A 2/3 supermajority is required to ratify a decision.
  • Node Rewards and Voting Participation:  To stimulate an environment of active governance, node rewards will be correlated with voting participation. This measure reinforces the importance of each node’s role in the democratic process:
    • Regular participation in the voting process will allow the node owner to receive 100% of the node reward.
    • A gradual reward reduction will be implemented for non-attendance at voting sessions. The first abstention reduces rewards to 90%, a second consecutive abstention to 75%, and rewards are halved to 50% from the third abstention onwards.
    • Full reinstatement of rewards is provided when voting participation is resumed.
  • Protection Against Malfeasance:  The community will be able to flag suspicious or harmful activities collectively. The community can collectively flag suspicious or harmful activities. Accumulating flags from more than 1/3 of the previous voting session’s active participants triggers a community-wide vote on the ostracism process:
  • Ostracism Process and SanctionsIn the event of a majority vote for ostracism, the flagged entity will face sanctions, including suspending voting privileges and extension of the node’s collateral lock-in by six months. An appeal mechanism will be introduced to ensure fairness and allow for contestation of the decision.
  • Resolving Rejections:  If a proposal fails to obtain sufficient votes, the author can revise it. To ensure progress, re-submitted proposals must significantly address previously raised concerns and describe the changes made.

Promoting Active Participation with Sortition

To further decentralize the voting power and include a broader community base, 10% of the voting tokens will be distributed among the proactive community members. This mechanism is directly inspired by Athenian democracy, where citizens had an equal opportunity to hold public office, thereby reducing the risks of corruption and elite domination in governance.

Social media activities will be monitored via Absolute Wallet, measuring the participation and engagement of every member. Based on their quarterly engagement, the top `30%` of the Callisto Network community will be eligible for a lottery where 10% of voting tokens will be distributed.

However, to maintain a sense of cohesion and avoid the potential for monopolization, a member can only win once every three rounds, which translates into a 30% cap on the win rate.

Implementation and Review

This integrated rewards system will be initially introduced as a pilot program, with continuous monitoring and evaluation to assess its effectiveness in enhancing democratic participation.

Based on community feedback and data collected, adjustments will be made to ensure fairness and the network’s health.

Toward Self-Sustaining and Autonomous Blockchain Ecosystem

  • Phase 1 (2018 – Present): During this phase, the Callisto Network team retains complete treasury control.
  • Phase 2: Here, the community is looped into all pivotal decisions and has control of 25% of the treasury.
  • Phase 3: The community assumes full treasury control, marking the realization of our vision for a thoroughly decentralized democratic ecosystem.