This Horizen DAO Constitution (the “Constitution”) sets forth the set of binding rules, procedures, processes, direction, and ethos for the Horizen DAO and The Horizen Foundation (the "Foundation"). Unless otherwise defined in this Constitution, defined terms in this Constitution shall have the meaning ascribed to those terms in Bylaws.
Decentralized governance stands as a cornerstone of the Horizen ecosystem, which entrusts every Tokenholder with a pivotal role from introducing ideas to making formal proposals and carrying out implementation. As valuable contributors, your engagement is as much a privilege as it is a responsibility. When reviewing or commenting on ideas or proposals, remind yourself that a fellow member of the Horizen community took the time to research, write, and share their idea with you. Be respectful and constructive. Tokenholders are collaborators, and your collaboration underpins the Horizen DAO’s and ecosystem’s success.
Similarly, when you put forward an idea or comment, be mindful of its impact and significance on community members and the larger mission of the Horizen DAO and ecosystem. Ensure that the ideas you share or the proposals you submit are well researched, thought through, and are presented clearly in a way that allows the idea or proposal to stand-up to this community’s scrutiny. The Foundation, a Cayman Islands foundation company, is responsible for furthering the growth of the Horizen ecosystem and will function as a steward of the Horizen community. Acting through its board of directors, and subject to the Bylaws and Foundation Articles ("Foundation Governing Documents"), the Foundation may:
- Facilitate the administration of Horizen DAO governance;
- Disburse treasury assets to fund community-approved initiatives, enter into contracts with service providers, or otherwise further its purpose of growing the Horizen ecosystem;
- Amend this Constitution; and
- Undertake other actions conducive to its stewardship role.
The Foundation will always undertake these responsibilities in a manner consistent with Horizen DAO’s guiding principles and values, this Constitution and the Foundation Governing Documents.
2. Guiding Values
A strong social layer that builds trust and maintains integrity across the Horizen ecosystem is crucial. Community building is essential in growing blockchain adoption, and communities are built on shared values. The Horizen DAO’s guiding values are as follows:
Transparency: The Horizen DAO seeks to be open and honest to its mission of decentralized governance. Just as the blockchain is powered by open-source software with publicly visible transactions, decisions and activities undertaken by the Horizen community through this DAO should be clearly grounded, articulated and understandable to all.
Accountability: Members of the community are accountable to each other. The mechanisms outlined in this Constitution crystallize the ways in which this will be achieved.
Security: Security is at the heart of the Horizen ecosystem and must be taken seriously by all community members and tokenholders. Any changes to the Horizen blockchain and/or EON blockchain should weigh security considerations heavily.
Community Involvement: The Horizen ecosystem and the Horizen DAO will only be as good as members of the community make it. Everyone has different skills to contribute and is encouraged to do so to ensure the success of the project.
Continuous Improvement: The Horizen DAO should never rest on its laurels. There are always things the community can do better, and community members should take an active role in proposing and implementing such improvements.
Social Responsibility: You, as a community member and Tokenholder, are here because you want to help build the future of the internet – and of the world. As such, each of us must be responsible stewards of that mission and act with integrity in all that we do.
The "Horizen DAO" or "DAO" means, collectively, the decentralized community of individuals that own, as evidenced by the Horizen blockchain, the $ZEN token.
The "Total Circulating Supply" means all of the $ZEN tokens currently in circulation.
The "ZenIP Process" means the rules and procedures for submitting and voting on ZenIPs, detailed further below in this Constitution.
The "EONIP Process" means the rules and procedures for submitting and voting on EONIPs, detailed further below in this Constitution.
The "Bylaws" means the bylaws of the Foundation as adopted by the Foundation in accordance with the Foundation Articles (as amended from time to time). A copy of the Bylaws is available here: Foundational Documents.
The "Foundation Articles" means the Memorandum and Articles of Association of the Foundation (as may be amended from time to time). A copy of the Foundation Articles is available here: Foundational Documents.
"Technical ZenIP" means any ZenIP which requires a technical implementation or upgrade to the Horizen blockchain, or which requires the modification of the Foundation Governing Documents or this Constitution.
"Non-Technical ZenIP" means any other ZenIP which does not require a technical upgrade to the Horizen blockchain, including but not limited to making grants, proposing arrangements with third parties and conducting Foundation governance.
"Technical EONIP": any EONIP which requires a technical implementation or upgrade to the EON blockchain, or which requires the modification of the Foundation Governing Documents or this Constitution.
"Non-Technical EONIP" means any other EONIP which does not require a technical upgrade to the EON blockchain.
3. Chain Governance
This Constitution describes the decision-making framework for governance of both the Horizen mainchain and the Horizen EON EVM-compatible sidechain, unless stated otherwise.
Currently, $ZEN is the governance token for both the Horizen mainchain and the EON sidechain. This Constitution lays out a dual-track process for implementing improvement proposals (ZenIPs and EONIPs, the processes for which are described below). Technical proposals follow a “rough consensus” model, where implementation happens when a majority of network participants, on the applicable chain, choose to run the new software version. This is the same model currently used by certain other blockchain networks, most notably Bitcoin and Ethereum. Non-Technical proposals, meanwhile, are enacted via a directive to the Foundation by means of a Tokenholder Vote. Further details regarding the process and voting thresholds are outlined below.
All DAO-approved proposals are reviewed by the Special Council for adherence to the mission of the Horizen DAO, this Constitution, the Foundation Governing Documents, and applicable law, before a ZenIP or EONIP is formally adopted. The responsibilities of the Special Council are described below and in the Foundation Governing Documents.
Following a DAO-approved proposal, the Foundation is responsible for implementing the actions described in each such proposal.
4. DAO Voting
As detailed in this Constitution and further in the Foundation Governing Documents, Tokenholders have the authority to propose and vote on EONIPs and ZenIPs, subject to, and in accordance with, either the ZenIP Process or EONIP Process (as applicable):
Appointing or removing members of the Special Council, and other DAO working groups, as those come into being, from time to time.
Creating new DAO Committees from time to time.
Remove individuals or organizations from the role of director or supervisor of the Foundation in accordance with the Foundation Articles (provided that the Foundation may not, at any time, be left with no directors or no supervisor).
Provide consent to any proposed changes to the Foundation Governing Documents, which would adversely affect in a material way the rights or powers conferred on the Tokenholders under the Foundation Governing Documents.
Approve the use, implementation, enhancement, improvement, management and licensing of the Horizen DAO-Governed IP;
Approve any other action in accordance with successful ZenIPs, EONIPs or the Foundation Governing Documents.
5. ZenIP/EONIP Processes
a. Before Submitting a Proposal
Before you can submit a ZenIP or EONIP, you must first check to see whether there have been past discussions about your proposal idea, what issues were raised, any reasons a past ZenIP or EONIP (as applicable) may have been rejected or not welcomed by the community during a vote, and whether any other facts and circumstances have changed that would make your proposal idea proposal infeasible or unwarranted. To do this, you must check past discussions on Discourse ("Discourse") and the Horizen Improvement Proposals Discord channel and confirm that either (1) your idea is novel and has not been proposed before (“Option 1”) or (2) if your idea has been proposed before, the idea you plan to propose is substantially different such that the likelihood of success during a vote by the community is high (“Option 2”). This is the initial research phase.
To submit a Non-Technical ZenIP you must hold or be delegated at least 100,000 $ZEN. To submit a Technical ZenIP you must hold or be delegated at least 200,000 $ZEN.
To submit a Non-Technical EONIP, you must hold or be delegated at least 100,000 $ZEN. To submit a Technical EONIP, you must hold or be delegated at least 200,000 $ZEN.
Once you have completed the initial research phase, and your proposal idea meets either Option 1 or Option 2 above, you can post your idea to the Horizen Discourse following this template:
The Title: ZenIP/EONIP Proposal Idea: [The Title for Your Proposal];
A single topic sentence that describes your idea clearly;
Why you are proposing your idea and what problem you are trying to fix;
The outcome if your proposal is successfully passed during a vote;
b. Modifications to a ZenIP/EONIP Idea
When you have posted your proposal idea, the Discourse moderator will then confirm whether your proposal idea conforms to the DAO’s approved guidelines before the proposal will be made public on Discourse. If you wish to change parts of your proposal idea, you may only do so in the comments to the published proposal idea on Discourse and your comments will be flagged as “official” changes – you will not have the opportunity to modify your proposal idea once it has been submitted to the Discourse moderator for publication.
c. Community Feedback
Once your proposal idea has been approved for publication by the Discourse moderator, community members will provide their feedback and reactions to your proposal idea via the comment section. This is a required process before your proposal idea is formally presented as a draft as outlined in step D.
Community members have a seven (7) day window to provide their feedback on your proposal idea, including their reactions to your ideas or modifications made in the comments. You should use this as an opportunity to engage with the community, consider their feedback, and begin to anticipate the ways in which the community may (or may not) welcome your proposal before it is put towards a vote.
d. ZenIP/EONIP Draft Creation
i. ZenIP/EONIP Draft
Once your proposal has completed the seven (7) day community review and feedback window your proposal idea will move to the draft stage. Your proposal must follow the below format:
You must then draft your ZenIP/EONIP according to a specific format and structure as outlined below:
Preamble -- Headers containing metadata about the ZenIP/EONIP (see below). The License field of the preamble indicates the licensing terms, which MUST be acceptable according to the ZenIP/EONIP licensing requirements which can be found here for Horizen and here for EON.
Terminology -- Definitions of technical or non-obvious terms used in the document.
Abstract -- A short (~200 word) description of the technical issue being addressed.
Motivation -- The motivation is critical for ZenIPs/EONIPs that want to change the Zen or EON blockchains. It should clearly explain why the current state of the Zen or EON blockchains is inadequate to address the problem that the ZenIP/EONIP solves.
Specification -- The technical or non-technical specifications should describe the interface and semantics of any new feature. The specifications should be detailed enough to allow competing, interoperable implementations for either the Zen or EON blockchains.
Rationale -- The rationale fleshes out the specification by describing what motivated the design and why particular design decisions were made. It should describe alternate designs that were considered and related work. The rationale should provide evidence of consensus within the community and discuss important objections or concerns raised during discussion.
Security and privacy considerations -- If applicable, security and privacy considerations should be explicitly described, particularly if the ZenIP/EONIP makes explicit trade-offs or assumptions.
Reference implementation -- If applicable, literal code implementing the ZenIP's/EONIP’s specification, and/or a link to the reference implementation of the ZenIP's/EONIP’s specification (only applicable to Technical ZenIPs or EONIPs). The reference implementation must be completed before any ZenIP/EONIP is given status “Implemented”, but it generally need not be completed before the ZenIP/EONIP is accepted into “Proposed” format and structure.
e. ZenIP/EONIP Draft Review and Moderator Feedback
Once your ZenIP/EONIP draft has been posted, the moderator(s) will ensure that your draft correctly follows the template. The moderator(s) will also have the opportunity to request additional information from you via private messaging on Discourse. If you do not respond to the moderator’s request for feedback or additional information within 30 days from receipt of the moderator’s request, your ZenIP/EONIP draft will be automatically rejected.
If your draft ZenIP/EONIP conforms to this Constitution and the ZenIP/EONIP format, the moderator will assign your draft a proposal number.
f. Administrative Review
DAO and ecosystem. ZenIPs/EONIPs play a significant role in the system of decentralization. As such, all ZenIPs/EONIPs must undergo administrative review by the Special Council, which is made up of 7 members from the Horizen community. For more information on the Special Council, including the Horizen DAO’s ability to elect Special Council members, please see further below in this Constitution. The Special Council will determine whether additional information or clarification is needed before your ZenIP/EONIP can be moved to a vote.
During this review, the Special Council may tag your ZenIP/EONIP “return for clarification” for the following reasons:
Cost to implement is unclear or unable to be calculated;
Proposal would use more than 10% of the DAO’s public treasury;
Proposal conflicts with another proposal;
Your proposal may also be tagged as “return for reconsideration,” for reasons including but not limited to:
Proposal violates or threatens the mission or values of the Horizen DAO, whether financially or through a proposed significant deviation from the mission of the Foundation;
Proposal has the potential to harm the Horizen DAO or the Foundation, whether financially or through a proposed significant deviation from the mission of the Foundation;
Proposal might violate law or otherwise contradict advice of counsel for the Foundation. If a proposal is suspected to violate the law or otherwise contradict the advice of counsel for the Foundation, the Foundation directors will confer with external counsel to confirm;
There is reasonable suspicion of fraud or other misleading information in the ZenIP/EONIP.
There is a maximum of three (3) revisions permitted following tags and comments from the Special Council. If your ZenIP/EONIP draft fails to satisfy the requirements after three (3) turns of revisions and comments, it will be rejected, and you will have to resubmit your proposal from the ZenIP/EONIP Idea stage.
If additional information is not needed, your ZenIP/EONIP will proceed to the voting stage. During the period, the Special Council meets at least once a month to review draft proposals that are being elevated to the voting stage. This process is in place to ensure the continued security of the Horizen DAO, Foundation, and community.
Now that your ZenIP/EONIP has been approved for voting, it will go to a live Snapshot vote. Voting can be accessed at Snapshot. As a $ZEN tokenholder, you can participate in this Snapshot voting.
ZenIPs/EONIPs are divided into two main categories, that each have their own requirements for adoption subject to a vote, in addition to the above requirements for drafting and submitting the proposals before they are put to a vote.
i. Non-Technical ZenIP/EONIP
Majority: The proposal must receive more votes in favor than against to pass; and
Quorum: There must be at least 5% of total circulating supply of $ZEN participating in the vote.
ii. Technical ZenIP/EONIP
Majority: Of the total votable $ZEN tokens participating in the vote, the proposal must receive at least 67% votes in favor of the proposal to pass; and
Quorum: There must be at least 10% of total circulating supply of $ZEN participating in the vote.
To vote on a proposal using a wallet that contains delegating voting power, you must login to Snapshot. $ZEN tokens that are delegated must have been delegated to the wallet address that is voting before the voting period begins.
Voting remains open for a period of 72 hours. At this time, anyone who meets the qualifications to vote may vote once for every $ZEN contained in (or delegated to) the wallet they are voting from. Following 72 hours, voting closes, and no more votes may be cast.
iii. Tie Votes or Conflicts
If there is a tie in votes for Non-Technical ZenIP/EONIPs, then such ZenIP/EONIP will be sent back to a community discussion phase for community members to discuss their differences or comprehension of the effects and purposes of the proposal and then put to a revote. A ZenIP/EONIP can only be sent back to the community discussion phase three (3) times before the proposal is automatically rejected and will need to be resubmitted starting from the ZenIP/EONIP Idea Stage.
h. Cooldown Period
A ZenIP/EONIP that passes must undergo a final review to ensure the proposal does not violate the Foundation Governing Documents, any laws, or otherwise jeopardizes the safety and security of the Horizen DAO or Foundation. The Foundation Director(s) will review a ZenIP/EONIP within 30 days from its passing. If the Foundation Director(s) are satisfied that no issues exist with implementing the approved ZenIP/EONIP, it moves towards implementation.
All ZenIPs/EONIPs that satisfy their voting approval thresholds, as described above, in addition to the other requirements specified in this Constitution, may be implemented in the following ways:
Upon approval of any Technical ZenIP/EONIP by the Horizen DAO, the Foundation will merge the approved ZenIP/EONIP into the Horizen Github repository for release as part of a new software version.
Ultimate implementation of a Technical ZenIP or EONIP which seeks to implement technical upgrades or changes will depend on the decision of a majority of network participants (miners and node operators) to run the new software version.
- The Foundation and the DAO administrator will assist in implementing approved Non-Technical ZenIPs/EONIPs, including hiring or engaging service providers, coordinating documentation and contract negotiations and all other actions incidental to implementing the approved Non-Technical ZenIPs/EONIPs.
The Horizen DAO administrator and/or project management team will assist with the above implementations but are not responsible for this on their own.
6. Special Council
The Special Council is tasked with serving as a steward for the Horizen DAO and providing oversight of the Foundation with security of the Horizen DAO and ecosystem as its paramount focus. These activities may include holding emergency operational meetings to discuss any security threats to the Horizen DAO, any protocol utilizing the $ZEN token, the Tokenholders, or the Foundation. The Special Council serves as a line of defense before a ZenIP or EONIP is put up for a final vote by the Tokenholders.
The Special Council replaces the Horizen Community Council (HCC). The Horizen Community Council was established to represent $ZEN tokenholders within the Horizen ecosystem. That role is now embodied within the safety function of the Special Council.
b. Composition and Elections
Initially, the Special Council will be made up of seven (7) seats. Those seats will be filled by seven (7) individuals, initially appointed by the Foundation Director(s), who will serve a term that begins on the date this Constitution is effective, until the first election cycles (“Initial Term”), as detailed below. Thereafter, Tokenholders can nominate and elect Special Council members to serve a standard Term of one year (“Standard Term”), unless, subject to one of the conditions below, a Special Council member is removed before the end of their Standard Term.
To stagger elections and optimize continuity of the Special Council, committee seats are randomly assigned to either a September cohort consisting of four (4) seats or a March cohort consisting of three (3) seats. Together, these cohorts will be subject to the Election Cycles discussed below. Beginning in 2025 and continuing every year thereafter unless otherwise modified pursuant to this Constitution:
Elections for the March cohort will commence on February 15 at 12:00 UTC of the relevant year and continue for seven (7) days until the election has been completed.
Elections for the September cohort will commence on August 15 at 12:00 UTC of the relevant year and continue for seven (7) days until the election has been completed.
An election is deemed to have been completed if, within the election period, Tokenholders had the opportunity to nominate or vote to elect an eligible individual to the Special Council, even if no nominations were made or no individual(s) elected.
Tokenholders may, at any time during the Initial or Standard Term, vote to remove a Special Council member through, and subject to, a Non-Technical ZenIP Process. If, at any time, one or several Special Council members are removed such that a vacancy exists on the Special Council, including where all seven seats are vacant, the Foundation Director(s) shall, acting in the best interests of the Foundation, have the authority to nominate and appoint replacement members to the Special Council who shall serve a Standard Term until such time as they are removed by tokenholders subject to the Non-Technical ZenIP Process or are replaced in the immediately next election.
The initial Special Council Members are:
Special Council members serve as a DAO committee and are tasked with serving as a steward for the Horizen DAO and providing oversight of the Foundation on behalf of the Horizen DAO. This includes calling emergency operational meetings as needed to discuss and address security threats to the Horizen DAO, any protocol utilizing the Token, the Tokenholders, or the Foundation, along with ensuring that they review any ZenIPs or EONIPs prior to voting by the Horizen DAO.
Given the responsibilities of Special Council members, candidates for the role of Special Council should have demonstrated most, if not all, of the following competencies:
Experience in the web3 industry and a demonstrated interest in the Horizen ecosystem.
Background in community engagement and community safety, with an emphasis on decentralized governance systems and communities.
An entrepreneurial mindset.
Excellent communication and writing skills.
No more than two (2) Special Council members at a time should be a current employee of, owner of, or holder of a beneficial interest in any common entity. The Foundation’s grant recipients shall be excluded from the foregoing limitation, provided that the grant award is the sole contractual relationship between any such entity and the Foundation. Additionally, at all times, no less than five (5) of the Special Council members shall be non-US persons.
No candidate with conflicts of interest that would prevent him or her from acting in the best interests of the Horizen DAO and/or the Foundation should be elected to the Special Council. Potential conflicts of interest could be, but are not limited to, affiliations with direct Horizen blockchain or EON blockchain competitors, or proven histories of exploiting projects and/or others.
e. Governance of Special Council
Following the conclusion of the Initial Term, Tokenholders may, subject to a Tokenholder Vote and the ZenIP Process, alter the number of seats that constitute the Special Council, provided that number of seats shall never be less than three (3) or larger than seven (7) and must always be an odd number to avoid tie votes.
A quorum of the Special Council shall exist:
When the Special Council has three (3) total seats, two (2) members are present;
When the Special Council has five (5) total seats, three (3) members are present;
When the Special Council has seven (7) total seats, five (5) members are present.
The Horizen DAO may approve and implement a ZenIP to change the rules governing future Special Council elections, but the ZenIP Process may not be used to intervene in an ongoing election.
Special Council members may only be removed prior to the end of their terms under two conditions:
- At least 10% of the total circulating supply of $ZEN participates in a vote for the removal of a Special Council member and at least 5/6th (83.33%) of all votes are "in favor" of removal; or
- All but one of the then current Special Council members, excluding the member at issue, vote in favor of removal.
The seat(s) of any Special Council member(s) who has been removed prior to the end of their respective term(s) shall remain unfilled until the next election, unless prior to an upcoming election, a replacement member is appointed by a vote of at least two-thirds (2/3rds) of the then-sitting Special Council members. If a vacant seat is filled by a vote of at least two-thirds (2/3rds) of the then-sitting Special Council members, then such member occupying that seat shall be up for reelection at the next election.
To streamline the decentralized system of governance for the Horizen DAO the operation of the Foundation may be facilitated by committees. The members on these committees will serve to enhance decentralized governance and efficiency through administrative functions within the Foundation but are not fiduciaries. Tokenholders will have the authority to vary and/or create new committees within the Horizen DAO, from time to time, in accordance with this Constitution and/or the Foundation Governing Documents, to further these efforts at the DAO.