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How does EOS governance work?

Intro for new EOS users

Dario Cesaro avatar
Written by Dario Cesaro
Updated over a week ago

On EOS, proposals are formalized on-chain and signed through multi-signature ("MSIG") accounts. Two or more accounts control an MSIG account with different weights and thresholds. The threshold is the number of votes a proposal must receive before it passes.

The weight of an account is how many votes it gets. For example, if there are three accounts on an MSIG, with a weight of 1 and a threshold of 3, then all three accounts must sign. If one of the accounts had a weight of 3, the other two accounts would not need to sign.

One benefit of using EOS is configuring MSIG accounts through a flexible permission system. Any organization can set up an MSIG to move funds and change account settings more securely in a decentralized manner.

The "EOS governance" refers to how BPs make decisions. When moving funds and changing the core code of EOS, block producers must sign an MSIG with a ⅔ + 1 consensus. Because there are 21 active BPs, 15 (the threshold) are needed to sign for the proposal to pass, while each BP has a weight of 1.

Important EOS community decisions are made transparently so token holders can determine whether elected BPs are aligned with the community. For example, in May of 2021, a major hack occurred on EOS, termed the "SX Vault Hack." The BPs signed an MSIG to reverse the transaction, allowing the stolen funds to return. Later in the year, the BPs collectively decided to form and fund the EOS Foundation through the same process.

Author: Jesse Jaffe

Editor: Randall Roland/ Dario Cesaro

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