Proposal for changes in the constitution | by Jetse Sprey - EOS Amsterdam

Original document: https://docs.google.com/document/d/1yVOIJVlttxXGi6zc95I5fJqLVudNwQ3emuaMFLAqLdQ/edit?usp=sharing

Constitution proposal 06-07-2018

After intense debate in the Telegram GOV channel and internally, EOS Amsterdam wishes to propose a new version the Constitution.

We believe in simple, straightforward and clear texts. We have cut out a lot of more detailed proposals we found in other versions. Extremely important in our view are the choice of applicable law and to introduce the possibility to introduce new regulation. This is to avoid a legal mess.

With “member” we mean: member of the EOS Community. This is a broad definition that in our view should include BPs, dApp developers and users.

We don’t like the idea of a multi party agreement. We believe the constitution has more elements of bylaws or articles of association then of a contract. Multi party agreements are notoriously difficult to handle.

This Constitution states the rights and obligations of all of the members of the EOS Community. No one shall be a member of the EOS Community without being bound to this Constitution.

Article I - Good faith

Each member shall always act in good faith towards other members.

Good faith means: reasonable. Taking the other parties’ interest into consideration. Balancing self interest and common interest in a justified manner. No lying, no violence.

Article II - No Perjury

Each member shall refrain from false or misleading statements and from actions that might harm the EOS Community disproportionally.

“Disproportionally” is add here since each member is entitled to favor its own interest over that of the community. This has to remain within reasonable (good faith) boundaries. In another version it read that the member shall be liable in case of lies. However, it is not necessary to stipulate that: if a party lies such party is in default under the constitution and liable. At least that’s how it should be structured.

Article III - Rights

The members grant the right of contract and of private property to each other. Therefore no property shall change hands except with the an action to that effect by the owner, by a valid Arbitrator’s order, or via community referendum. This Constitution creates no positive rights for or between any Members.

We had some discussion here. Sometimes an owner does not want to deliver property but has to do so because a judge rules that such an owner should do that. That’s hardly consent and happens often. That’s why we have replaced consent by the more neutral “an action to that effect by the owner”.

Article IV - No Vote Buying

No Member shall offer nor accept anything of value in exchange for a vote of any type, nor shall any Member unduly influence the vote of another.

Article V - No Fiduciary

No member shall have fiduciary responsibility to support the value of the EOS token. The members do not authorize anyone to hold assets, borrow, nor contract on behalf of EOS token holders collectively. This blockchain has no owners, managers or fiduciaries; therefore, no member shall have beneficial interest in more than 10% of the EOS token supply.

We have deleted “nor EOS token holder” since such token holder is also a member of the EOS Community.

Article VI - Restitution

Each member agrees that penalties for breach of contract, including a breach of this Constitution, may include, but are not limited to, fines, loss of account, and any other restitution or compensation. Each member may seek any provisional or other measure (other than monetary compensation) that is needed to remedy a breach of contract and/or a breach of this Constitution.

We added: “this Constitution”. I refer to our comments with Article II. A violation of the Constitution leads to claims with the respective member.

Further we need the possibility to have other measures than monetary compensation. E.g. to ban a member from EOS or to forbid further publication of infringing material.

Article VII - Open Source

Each smart contract shall be offered via a free and open source license. Each smart contract shall be documented with a Ricardian Contract stating the intent of all parties and naming the Arbitration Forum that will resolve disputes arising from that contract. Each contract, whether smart or not, regarding EOS shall ensure applicability of this Constitution and serve its text.

Through each contract the constitution needs to be served too.

Article VIII - Language

Multi-lingual contracts must specify one prevailing language in case of dispute and the author of any translation shall be liable for losses due to their false, misleading, or ambiguous attested translations.

Article IX - Dispute Resolution

All disputes arising out of or in connection with this Constitution shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules.

Article X - Choice of Law

Choice of law for disputes shall be, in order of precedence, this Constitution and the Maxims of Equity and the laws of Switzerland.

We need an applicable law system. In practice it seems that continental law is preferable since legal costs are considerably lower (very generally speaking). An arbiter will need an applicable law system. E.g. to check if the Ricardian Contract is valid. That can only be done through the use of applicable law to contracts.

We need an applicable law mentioned here since otherwise. If we do not choose the law, the arbitrators will. They will (and probably will have) to use the international conflict law and that will lead to a huge variety of applicable law systems and add a high degree of unpredictability to the legal issues around the chain.

My experience with Swiss law is limited. It is continental and therefore code based (which seems preferable) and the country is neutral. My limited experience didn’t raise flags. I could do a quick survey.

Article XI - Amending

This Constitution and its subordinate documents shall not be amended except by a vote of the token holders with no less than 15% vote participation among tokens and no fewer than 10% more Yes than No votes, sustained for 30 continuous days within a 120 day period.

Article XII - Publishing

Members may only publish information to the Blockchain that is within their right to publish. Furthermore, members voluntarily consent for all members to permanently and irrevocably retain a copy, analyze, and distribute all broadcast transactions and derivative information.

We suggest to get this out. Freedom of speech is hardly enforceable in an international community. This has to be dealt with with local courts that will go after a member that publishes something illegal.

Article XIII - Informed Consent

All service providers who produce tools to facilitate the construction and signing of transactions on behalf of other members shall present to said other Members the full Ricardian contract terms of this Constitution and other referenced contracts. Service providers shall be liable for losses resulting from failure to disclose the full Ricardian contract terms to users.

We have put that in Article VII.

Article XII - Severability

If any part of this Constitution is declared unenforceable or invalid, the remainder will continue to be valid and enforceable.

Article XIII - Termination of Agreement

A Member is automatically released from all revocable obligations under this Constitution 5 years after the last transaction signed by that Member is incorporated into the blockchain. After 5 years of inactivity an account may be put up for auction and the proceeds distributed to all Members according to the system contract provisions then in effect for such redistribution.

There is a lot of discussion about this clause. We suggest to prolong the term to 5 years in order to comply with, at least, some consumer law we know in our jurisdiction that probably will forbid closing accounts sooner than 5 years of inactivity.

Article XIV - Further legislation

The EOS Community may issue further regulation within the boundaries of the Constitution. The EOS Community may also authorize the BPs or a certain majority of the BPs to deal with specific matters. Further regulation to be issued by the Community shall need a simple majority of the votes cast for 30 days.

We need to authorize the Community to deal with practicalities and further regulation. E.g. to vote on what to do with the abandoned account. The Community's legislative powers/organizing powers can only stem from the Constitution. That's the governing document. If we don't do that any further ideas the community may come up with may be in a legal twilight zone. Further some executive decisions will have to be made. The BPs seem to be fit to handle those.

An example of such regulation may be the dealing with name squatting or the way people get notified in the context of abandoned accounts. The outlines are in the Constitution or can be found, more generally speaking, in the good faith article/article 1. The more precise rules may be detailed by the community and the executive ones by the BPs.

Article XVI - Developer Liability

Members agree to hold software developers harmless for unintentional mistakes made in the expression of contractual intent, whether or not said mistakes were due to actual or perceived negligence.

We believe that the Constitution is not the place to introduce this kind of detailed clauses.

Article XVII - Consideration

All rights and obligations under this Constitution are mutual and reciprocal and of equally significant value and cost to all parties. Under continental law we don’t need a formal phrase like this. More importantly: if we treat the constitution as what it is: bylaws of our community, introducing contract law elements such as these may cloud the discussion.

Article XVIII - Acceptance

A contract is deemed accepted when a member signs a transaction which incorporates a TAPOS proof of a block whose implied state incorporates an ABI of said contract and said transaction is incorporated into the blockchain. Looks also too detailed for the constitution.

Article XIX - Counterparts

This Constitution may be executed in any number of counterparts, each of which when executed and delivered shall constitute a duplicate original, but all counterparts together shall constitute a single agreement.

Not necessary.

Article XV - Interim Constitution

This constitution is interim and is intended to remain in effect until a permanent constitution is written and ratified in a referendum.

EOS-Mainnet / governance