Constitution of the KARRATco
The Constitution of the KARRAT Community ("KARRATco") (the "Constitution")
The potential to bridge the worlds of art and technology has never been more profound. As creatives work to build communities through gaming, AI, and entertainment, a new era of creativity is quickly manifesting itself.
The tectonic plates of emerging technologies are shifting right beneath our feet, and projects driven by great art, storytelling, and technological innovation can now engage their communities in ways that were not even fathomable before. The KARRATco is a means for creatives to continue this work, and progress the fundamental evolution of these spaces.
Decentralization underpins this evolution of gaming and entertainment, and the KARRAT Protocol exists as an open protocol for creative projects to build upon together.
Ultimately, it’s about enabling creative people to build fun things.
Some of the rules and procedures of this Constitution will be enforced directly by smart contracts on a blockchain, and some will not. All rules are equally binding. Actions taken under this Constitution may be on-chain or off-chain actions. On-chain actions are those that are actuated directly by the governance smart contracts of the KARRATco as transactions on a blockchain. Off-chain actions are those that are actuated by other means.
This Constitution also includes some "recommended guidelines" which are non-binding but strongly recommended as good governance practice.
This Constitution describes the procedures by which it may be amended and lays out the governance framework of the KARRATco and the Karrat Foundation, a Cayman Islands Foundation Company (the "Karrat Foundation").
Definitions:
KIP: A KARRAT improvement proposal, which is a proposal put forth by a community member of the KARRATco, to a vote in accordance with the KIP Process.
KIP Process: The rules and procedures of submitting and voting on KIPs as described in Section 1: KARRATco Proposals and Voting Procedures of this Constitution, as may be amended from time to time pursuant to a KIP.
KARRATco Treasury: All $KARRAT tokens held in a governance smart contract governed directly by the KARRATco and/or the Security Council of the Karrat Foundation via on-chain voting mechanisms.
Karrat Protocol: The open gaming infrastructure made up of on-chain contracts and other modules, governed by the KARRATco.
Votable Tokens: All $KARRAT tokens in existence, excluding any tokens held by the Karrat Foundation, the KARRATco Treasury, locked tokens and any unclaimed airdrops.
Section 1: KARRATco Proposals and Voting Procedures
The following process governs the rules and procedures by which the KARRATco may propose, vote on and implement KARRAT Improvement Proposals (KIPs). No KIP may be in violation of applicable laws, in particular sanctions-related regulations.
Phase 1: Temperature Check (1 week) (Optional but Recommended): The KIP is suggested on the public forum and discussed/debated for 1 week. The KIP should be accompanied by a Snapshot poll or other method as determined pursuant to the governance process, which can only be submitted by an address that can vote at least 0.01% of the Votable Tokens. The Snapshot poll also runs for 1 week, and is decided by a simple majority with no required participation threshold. A KIP that fails the temperature check should not be submitted for a vote. If a KIP fails the temperature check, or has not undergone a temperature check, as a matter of good governance practice, it is recommended that voters strongly consider voting to reject it.
Phase 2: Formal KIP and call for voting (3 days): The KIP is submitted via governance contracts on Ethereum MainNet, with a user interface available on WinVote. The KIP proposer is required to have an address that is delegated at least 100,000 Votable Tokens. After 3 days, a voter distribution snapshot will be taken and the voting period will begin; this gives interested parties time to discuss the KIP and gather votes before the voter distribution snapshot is taken. Each KIP must be labeled as "Constitutional" or "Non-Constitutional". A Constitutional KIP is one that:
Process: Modifies the text or procedures of this Constitution.
Protocol upgrades: Modifies the process or code of the Karrat Protocol functionality. This will be an on-chain action.
Recommended guideline - KARRATco members should vote against any KIP that is incorrectly labeled. A Non-Constitutional KIP is a KIP that is not considered a "Constitutional KIP" including:
Funding: Requests funds/grants or otherwise proposes how to spend or allocate funds from the KARRATco Treasury.
Informational: Provides general guidelines or information to the community but does not otherwise propose a new feature or update.
Each KIP must also clearly specify which KIP(s) it will affect (this may be specified by code, data, or text, as appropriate for the specific KIP).
As a recommended guideline, a KIP should include:
Abstract - Two or three sentences that summarize the KIP.
Motivation - A statement on why the KARRATco should implement the KIP.
Rationale - Explanation of how the KIP aligns with the KARRATco's mission and guiding values.
Key Terms (optional) - Definitions of any terms within the proposal that are unique to the proposal, new to the KARRATco, and/or industry-specific.
Specifications - A detailed breakdown of the platforms and technologies that will be used.
Steps to Implement - The steps to implement the KIP, including associated costs, manpower, and other resources for each step where applicable. For the avoidance of doubt, any KIPs involving transactions with third parties (such as grants) will need to ensure that applicable legal documentation and procedures are also included.
Timeline - Relevant timing details, including but not limited to start date, milestones, and completion dates.
Overall Cost - The total cost to implement the KIP.
As a recommended guideline, the KIP author can add additional fields to any template if necessary to fully communicate the intentions, specifics and implications of the KIP. As a recommended guideline, resubmitted KIPs should also include:
A link to the original KIP;
Reasons such original KIP was not approved;
Changes that have been made and why it should now be approved; and
Any additional fields to any template if necessary to fully communicate the changes made and the intentions, specifics and implications of such resubmitted KIP.
Phase 3: KARRATco votes on KIP, on Ethereum MainNet (14 days): During this Phase 3, the KARRATco will be able to vote directly on-chain on a submitted KIP. A KIP passes if the following conditions are met:
More Votable Tokens have casted votes "in favor" than have casted votes "against" ("Threshold 1"); and
In the case of a:
Constitutional KIP, at least 5% of all Votable Tokens have casted votes either "in favor" or "abstain"; or
Non-Constitutional KIP, at least 3% of all Votable Tokens have casted votes either "in favor" or "abstain" (collectively, "Threshold 2").
If the KIP fails to pass, the process ends after this Phase 3. If the KIP passes, then it proceeds to Phase 4.
Phase 4: Timelock: After a KIP has been approved, there will be a 7 day timelock.
Phase 5: Implementation: The KIP is fully executed and implemented.
This KIP Process as specified will typically require 31 days from the beginning of the temperature check in Phase 1 until a KIP is finally executed in Phase 5. A KIP may optionally specify further delay before its implementation.
Section 2: The Security Council
The Security Council is a committee of 3 members who are signers of a multi-sig wallet, which has powers to perform certain Emergency Actions and Non-Emergency Actions, as delegated to it by the KARRATco and Karrat Foundation, and is responsible for upholding this KARRATco Constitution. Through the submission, approval and implementation of a Constitutional KIP, the KARRATco is able to modify the Security Council's powers.
Emergency Actions:
The Security Council has the power to execute any software upgrade or perform other required actions with no delay in order to respond to a security emergency, should one arise (such actions, "Emergency Actions"). Performing any Emergency Action requires a 2-of-3 approval from the Security Council. The Security Council must not use its power to perform Emergency Actions except in a true security emergency, such as a critical vulnerability that could significantly compromise the integrity, confidentiality, or security of the KARRAT Protocol or KARRATco.
After performing any Emergency Action, the Security Council must issue a full transparency report (at an appropriate time after the security emergency has passed) to explain what was done and why such Emergency Action was justified.
Non-Emergency Actions:
The Security Council may also approve and implement routine software upgrades, routine maintenance and other parameter adjustments in a non-emergency setting (such actions, "Non-Emergency Actions"), which require a 2-of-3 approval in order to take effect. Any Non-Emergency Action, after approval by the Security Council, will bypass Phases 1 to 4 of the KIP Process and instead directly go through Phase 5 of the KIP Process. The Security Council may optionally specify additional delays before deployment.
Section 3: Security Council Elections
The first Security Council election is scheduled to begin on April [15], 2025. The election can only begin upon the availability of an on-chain election process that is approved and installed by the KARRATco.
The date chosen for the first election will form the basis for all future elections. Every election should begin 12 months after the previous election has started and it will replace its respective 3 members.
All Security Council members are expected to serve their term of 12 months with such appointment terminating on the completion of the re-election of Security Council members or the installation of new Security Council members (as applicable).
The following timeline governs an election that starts at time T:
Contender submission (T until T+7 days): Any KARRATco member may declare their candidacy for the Security Council.
Nominee selection (T+7 until T+14 days): Each KARRATco member or delegate may vote for their declared contender. Each Votable Token may be cast for one contender. Each eligible contender must be supported by pledged votes representing at least 0.2% of all Votable Tokens (such contender, the “Nominee).
Compliance process (T+14 until T+28 days): All Nominees will cooperate with the Karrat Foundation and complete the compliance process. The Karrat Foundation is responsible for removing any Nominees that fail the compliance process. In the event that fewer than three Nominees are supported by pledged votes representing at least 0.2% of all Votable Tokens, the current Security Council members whose seats are up for election may become candidates until there are 3 Nominees.
Member election (T+28 until T+49 days): Each KARRATco member or delegate may vote for any declared Nominee. Each Votable Token may be cast for one Nominees.
At T+49 days: The process for replacing the Security Council members with the 3 Nominees who received the most votes will be activated. The installation process must be executed via the on-chain governance smart contracts and it may take several days until the new Security Council members are installed.
The Karrat Foundation is allocated 14 days for the compliance process and it should be executed between the Nominee selection and Member election. The Karrat Foundation has flexibility to update its compliance policy for every new election. This is required to allow the Karrat Foundation to comply with Cayman Island laws and to ensure Nominees comply with the requirements of this Constitution. Furthermore, the Karrat Foundation maintains the right to issue new procedures and guidelines for off-chain components of the Security Council election. All efforts should be made by the Karrat Foundation to ensure an orderly, fair, and transparent election.
As a matter of best practice for maintaining an independent Security Council, no single organization should be overly represented in the Security Council. In particular, there should not be more than 1 Nominee associated with a single entity or group of entities being elected to the Security Council, thereby ensuring that there will be no single entity or group of entities able to control or even veto a Security Council vote. Additionally, there should not be more than 1 Nominee from any single geographic region (defined by continents).
Furthermore, no Nominees with conflicts of interest that would prevent them from acting in the best interests of the KARRATco, KARRAT Protocol and/or the Karrat Foundation should be elected to the Security Council. Potential conflicts of interest could be, but are not limited to, affiliations with direct KARRAT competitors, proven histories of exploiting projects and others.
The KARRATco may approve and implement a Constitutional KIP to change the rules governing future Security Council elections, but the KIP Process may not be used to intervene in an ongoing election.
Security Council members may only be removed prior to the end of their terms under two conditions:
At least 10% of all Votable Tokens have casted votes either "in favor" of removal or "abstain", and at least 5/6 (83.33%) of all casted votes are "in favor" of removal; or
At least 2 of the Security Council members vote in favor of removal.
The seats of Security Council members who have been removed prior to the end of their respective terms shall remain unfilled until the next election that such seats are up for appointment, unless otherwise replaced prior to such next election by a vote of at least 2 of the Security Council members, in which case such seat shall be up for appointment at the next such election. The Security Council may not re-appoint a removed member and they can only be re-elected via the election voting system.
Section 4: Community Values
As the guiding values of the KARRATco, Karrat Foundation and KARRAT technology should be:
Progressively Decentralized: Decentralization is a core tenet of the KARRAT Protocol. The KARRAT Protocol and KARRATco should adopt a deliberate process of progressive decentralization, as more and more elements become increasingly decentralized as time goes on.
Creativity: The KARRATco should value crafting innovative solutions or ideas that address challenges the KARRATco faces, improve existing processes, or create new experiences, by thinking differently, combining ideas, and using resources effectively.
Technologically innovative: The KARRAT Protocol and KARRATco should embrace new and innovative technological advances in the gaming, web3, AI, and entertainment spaces, and should seek out and be open to adopting and developing new solutions in order to continue to provide value to protocol users.
Sustainable: The KARRAT Protocol should be built and operated with an eye to the long term. Decisions about technology, economics, and resource allocation should not value short-term optimization over the longer-term health and thriving of the KARRAT Protocol, technology and community.
Secure: The KARRAT Protocol and KARRATco should be security minded, and safety of the system should be weighed heavily when considering any protocol changes.
User-focused: The KARRATco should govern for the benefit of all KARRAT Protocol users.
Neutral and open: The KARRATco should not pick winners and losers, but should foster open innovation, interoperation, user choice, and healthy competition on the KARRAT Protocol.
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