04 Protocol and Network Governance

While the development of the ReSource Protocol is guided by a Swiss Association, bylaws of which can be found in appendix A to this paper, mutual credit networks built on ReSource will be directed by Decentralized Organizations, representing the network’s stakeholders. The exact terms and scopes of DAO governance may vary from network to network, the terms below describe the ones set for the ReSource Network.

Decisions concerning the operations of the ReSource Network, such as interest rates, underwriter whitelists, member acquisition and reserve policies will be subject to public votes. Voting rights will be assigned to participants in proportion to 1. SOURCE staked in one of the network’s underwriting pools, and 2. A Reputation score.

Staked SOURCE grant their owners asymptotically diminishing voting rights. This means that the first staked SOURCE is counted as one vote, while the second staked SOURCE is counted as 0.9 votes, the third 0.85, and so on and so forth. Reputation scores, on the other hand, grant their owners voting rights in direct proportion to their scores.

Since Reputation is a direct, sybil-resilient, and non-transferable result of productive network activity, this hybrid model ensures that the ReSource Network remains governed by its stakeholders and can’t easily be subjected to hostile takeovers.