A little Too Technical Overview of Governance in NEAR City

When we talk about governance on a blockchain, there are many aspects that can be governed. The most important one is the changes and improvements made to the blockchain protocol. Each blockchain has its own way of achieving this and in NEAR this is accomplished in the following manner:

• At each epoch there is a corresponding protocol version that  is agreed upon by validators through a voting mechanism.[1]

• This mechanism involves iteration over all previous blocks (back to PROTOCOL_UPGRADE_NUM_EPOCHS=2) and collecting the latest version for each validator.

• Then stake amount of each validator is weighted by the version the validator holds.

• Finally the condition to switch to next protocol version will be decided based on stake > PROTOCOL_UPGRADE_BLOCK_THRESHOLD * epoch_info.total_block_producer_stake

  Where PROTOCOL_UPGRADE_BLOCK_THRESHOLD is currently 80%

So we get that the higher the stake amount, the more a validator’s decision power is in protocol upgrades proposals. So without further ado let’s dive into some data and charts!

References

[1] Protocol Upgrade [2] Valisaurus Pool

Who’ve Got The Power

First step in our analysis would be to find the top 20 validators in terms of the amount delegated.

• We can see that nearly of the top 20 validators, 6 of them account for more than 50% of the total NEAR staked. This means that when the voting time comes, since the stake amount decides on the weight of the voting decision and 2/3 of total votes have to be positive for change to take place, the top 10 validators can almost cooperatively decide to do anything.
• Now NEAR at its initial stage is controlled and governed by the Foundation. Later the influence of the Foundation will become decentralized as the network matures. The existence of foundation protects the network from major changes that the top 10 nodes can possibly induce.

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Who’ve Got The Fame

Let’s also look at the number of delegators that each node has interacted with.

This will give us a shallow view into the influence of delegators in nodes.

If we take a close look at the Delegators and Amount delegated charts we can see:

• Binance Node and Valisaurus Dex pools have relatively lower delegators than many others but interestingly enough they both appear on top 6 in our power percentage analysis.
• Binance is a centralized exchange that has many wealthy investors and them being a top validator makes sense.
• Valisaurus DEX however is not a known DEX and judging by its name and the anonymity of the account addresses that hold very large amount of NEAR, It is probably a Russia based validator.[2]

Time Space & Validator Staking Unstaking

To better understand relationship between governors and it’s citizens, the daily interactions such as delegations and undelegations can be investigated.

• Stakers seem to show heavy delegation activity over 2-3 months interval with large volumes.

• It can be concluded that whale stakers are likely to stake up to 3 months. This can be observed in daily charts of delegation and undelegation acitivities.

• Daily unstakings from validators range between 30-200 and in the absence of large accounts, this corresponds to about 90k in NEAR tokens.

• Daily staking to validators on average ranges between 200k-400k NEAR excluding the large accounts and 220-600 stakers.

• Users in this ecosystem are more inclined to stake as can be seen from the cumulative chart.

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Final Remark

NEAR still has to do a bit more work to achieve a completely decentralized network. The decentralization requires extensive and broadly investments on users part and to achieve this the first step would be incentivization which NEAR is abundantely has provided.

Next step would be to attract many more investors and familiarize them with the ecosystem. A major point to consider when attracting new investors is making sure that they know their investments will be safe and fruitful in the long run.