by Remy Le Berre and Alexei Zamyatin
Interlay is running for a win in the Polkadot parachain slot auction, while Kintsugi, already a winner in Kusama, takes the first step into true Chaotic DeFi and launches KINT.
It’s time to talk about Governance.
Let’s start things off simple.
Keeping the Promise of Full Decentralization
Interlay and Kintsugi’s mission is to bring Bitcoin to any blockchain. This must be done in a fully trustless and decentralized manner — otherwise, it would not be Bitcoin anymore.
Many DeFi protocols bet on ‘gradual decentralisation’.
We take a more radical approach. Kintsugi will launch 100% decentralized from day 1.
This means no admin keys, no single entity or group holding more than 50% voting power, and — most important — every KINT holder, can participate in governance.
What does it mean “to Govern”?
KINT is a ‘governance token’ that represents the voting power within the Kintsugi network.
It’s simple: as a KINT holder, you decide *everything*. You get to propose and vote on new features, authorize code updates, determine which collateral assets are supported, or how treasury funding should be spent — and much more.
The Mechanism: Liquid, Optimistic, Stake-to-Vote
Kintsugi’s governance model has been inspired by Polkadot’s governance structure. Many of you may already be familiar with this model, yet Kintsugi introduces two major modifications:
- Liquid, optimistic governance
- Stake-to-Vote
Liquid, Optimistic Governance
Liquid governance means that there is no council — KINT holders vote directly on proposals. Community can elect a Technical Committee — but it can only fast track proposals.
Optimistic means that at low turnouts, proposals need to be rejected. Proposals that the community do not deem impactful (e.g. minor parameter changes) will generally pass, unless strongly opposed. For votes with high participation (e.g. disputed decisions), the system falls back to a standard majority vote (50%+1 need to be in favor).
This type of governance allows Kintsugi to avoid a common problem known as ‘The Lazy voter’ where governance isn’t as active as we would hope.
For more information regarding ‘Super majority Against (Negative Turnout Bias)’
Stake-to-Vote
To vote on governance proposals, users must first lock their KINT with the Kintsugi parachain, thus minting vKINT!
The idea is simple: the longer KINT are locked, the more voting power a voter has, since the voter has a longer-term stake in the health and success of Kintsugi.
This voting power is represented through vKINT — a “non-transferable token”.
The longer KINT is locked, the more vKINT is minted, and the more voting power you have.
Decreasing voting power
The amount of vKINT you have decreases linearly over time. This means your voting power becomes less the closer we get to the unlock date of your KINT. Why? Because your stake in the system is not as “long term” as it was when you initially locked your KINT.
However, don’t worry! You can always extend the lock period to again increase your voting power.
At the end of the lock period, your KINT can be withdrawn.
What about the staking rewards?
You’ll be glad to hear there are rewards for staking your KINT! Within the years 1–4, KINT stakers receive5% of the total supply as rewards, distributed per block and proportional to their stake. Remember:the longer your KINT is locked, the more voting power you have, and the more rewards you can receive.
Beyond year 5, the rewards increase to 6.7% of the annual inflation.
Limiting the Team’s and Investor’s Voting Power
To give more power to the community, the Interlay team and its investors have introduced additional restrictions upon their own voting power.For the first 2 years after launch, they can only use a portion of their KINT to participate in governance, until more KINT enters circulation and is dispersed throughout the community.
This ensures that Kintsugi remains 100% decentralized.
Want to become a Kintsugi protocol politician?
Take a deep dive into Kintsugi’s governance model here!
About Interlay
We envision a future where blockchains seamlessly connect and interact: anyone can use any digital asset on any blockchain, trustless and without limitations. We work with Bitcoin, Ethereum, Polkadot, Cosmos, and others to expand interoperability, capital efficiency, and openness.
Our flagship product is interBTC — Bitcoin on any blockchain. A 1:1 Bitcoin-backed asset, fully collateralized, interoperable, and censorship-resistant, realizing the true free nature of BTC and decentralized finance. Kintsugi is our canary network on Kusama — the innovation hub of the Interlay network.
Follow our Twitter, Telegram, and Discord to keep up to date with daily updates from the team, or visit our website.
We Are Hiring!
Community Manager [Chinese Speaking]
Community Governance: Decentralizing Kintsugi From Day 1 was originally published in Interlay on Medium, where people are continuing the conversation by highlighting and responding to this story.
