Budget System (Funding / Voting / DGBB)
Terracoin adopted Dash's Decentralized Governance by Blockchain, or DGBB on block 1,087,500. DGBB is Dash's attempt to solve two important problems in cryptocurrency: governance and funding. Governance in a decentralized project is difficult, because by definition there are no central authorities to make decisions for the project. In Terracoin, such decisions are made by the network, that is, by the owners of masternodes. The DGBB system allows each masternode to vote once (yes/no/abstain) for each proposal. If a proposal passes, it can then be implemented (or not) by The Terracoin Foundation. A key example of this on the Dash network is early in 2016, when Dash's Core Team submitted a proposal to the network asking whether the block size should be increased to 2 MB. Within 24 hours, consensus had been reached to approve this change. Compare this to Bitcoin, where debate on the block size has been raging for nearly three years.
The DGBB also provides a means for Terracoin to fund its own development. While other projects have to depend on donations or premined endowments, Terracoin uses 10% of the block reward to fund its own development. Every time a block is mined, 45% of the reward goes to the miner, 45% goes to a masternode, and the remaining 10% is not created until the end of the month. During the month, anybody can make a budget proposal to the network. If that proposal is approved by at least 10%* of the masternode network, then at the end of the month a series of "superblocks" will be created. At that time, the block rewards that were not paid out (10% of each block) will be used to fund approved proposals. The network thus funds itself by reserving 10% of the block reward for budget projects.
- The actual calculation is (YES votes - NO votes) > (Total Number of Masternodes / 10)
Amanda B. Johnson - Dash School #4: How is Dash's Blockchain Funded & Governed?
Evan Duffield: How Dash is Governed