Encointer is ready to bootstrap its first productive community and has finalized its initial governance structure to have enough freedom to finetune its protocol parameters without frequent intervention by Kusama democracy.

Encointer’s common good parachain is currently a shell without functionality beyond testing teleporting of KSM tokens. This [runtime upgrade to V7](https://github.com/encointer/encointer-parachain/releases/tag/1.0.1) will bring the full encointer protocol and the [first community in Zurich](https://leu.zuerich) can start.

[Runtime code](https://github.com/encointer/encointer-parachain/tree/master/polkadot-parachains/encointer-runtime)

[Encointer protocol pallets](https://github.com/encointer/pallets)

## Fees and Treasury

In order to reach Encointer's [vision for web3 inclusivity](https://polkadot.network/blog/introducing-encointer-making-web3-truly-inclusive/), tx fees can be paid in KSM or community currencies.
If paid in KSM, the fees are transferred to the Encointer parachain treasury, which is planned to be at the disposal of the parachain council for spend proposals

## Governance Design

As Encointer is a common good parachain, root origin is only available for Kusama relay chain governance. In order to adjust the encointer protocol parameters, the Encointer Association members form the council of the Encointer parachain which is authorized to

* Adjust ceremony schedule
   * [`next_phase`](https://github.com/encointer/pallets/blob/91cbd7c9c0d47c4a80c096d3b2b501625a6bb724/scheduler/src/lib.rs#L151): force progress to next ceremony phase
   * [`push_by_one_day`](push_by_one_day): postpone next phase change by one day push_by_one_day
   * [`set_phase_duration`](https://github.com/encointer/pallets/blob/91cbd7c9c0d47c4a80c096d3b2b501625a6bb724/scheduler/src/lib.rs#L173): adjust ceremony schedule phase durations
   * [`set_next_phase_timestamp`](https://github.com/encointer/pallets/blob/91cbd7c9c0d47c4a80c096d3b2b501625a6bb724/scheduler/src/lib.rs#L184): arbitrarily define the time for next phase change
* Manage communities
   * [`new_community`](https://github.com/encointer/pallets/blob/91cbd7c9c0d47c4a80c096d3b2b501625a6bb724/communities/src/lib.rs#L76): Register new communities
   * [`add_location`](https://github.com/encointer/pallets/blob/91cbd7c9c0d47c4a80c096d3b2b501625a6bb724/communities/src/lib.rs#L143): add meetup location for community
   * [`remove_location`](https://github.com/encointer/pallets/blob/91cbd7c9c0d47c4a80c096d3b2b501625a6bb724/communities/src/lib.rs#L189): remove meetup location for community
   * [`update_community_metadata`](https://github.com/encointer/pallets/blob/91cbd7c9c0d47c4a80c096d3b2b501625a6bb724/communities/src/lib.rs#L214): change name, currency, artwork IPFS cid for community
   * [`update_demurrage`](https://github.com/encointer/pallets/blob/91cbd7c9c0d47c4a80c096d3b2b501625a6bb724/communities/src/lib.rs#L238): change how fast balances are demurraged per community
   * [`update_nominal_income`](https://github.com/encointer/pallets/blob/91cbd7c9c0d47c4a80c096d3b2b501625a6bb724/communities/src/lib.rs#L258): the amount of basic income per ceremony per person per community
   * [`set_min_solar_trip_time_s`](https://github.com/encointer/pallets/blob/91cbd7c9c0d47c4a80c096d3b2b501625a6bb724/communities/src/lib.rs#L279): security parameter to calculate minimal location distance
   * [`set_max_speed_mps`](https://github.com/encointer/pallets/blob/91cbd7c9c0d47c4a80c096d3b2b501625a6bb724/communities/src/lib.rs#L289): security parameter defining the maximal speed over ground of an adversary
   * [`purge_community`](https://github.com/encointer/pallets/blob/91cbd7c9c0d47c4a80c096d3b2b501625a6bb724/communities/src/lib.rs#L299): Remove a community by from the registry entirely, wiping all balances, reputation and locations
* Manage Ceremony Parameters and Memory
   * [`set_inactivity_timeout`](https://github.com/encointer/pallets/blob/91cbd7c9c0d47c4a80c096d3b2b501625a6bb724/ceremonies/src/lib.rs#L386): define how many ceremonies a community can be idle before getting purged
   * [`set_endorsement_tickets_per_bootstrapper`](https://github.com/encointer/pallets/blob/91cbd7c9c0d47c4a80c096d3b2b501625a6bb724/ceremonies/src/lib.rs#L396): define how many endorsement tickets bootstrappers should get to invite people they trust
   * [`set_reputation_lifetime`](https://github.com/encointer/pallets/blob/91cbd7c9c0d47c4a80c096d3b2b501625a6bb724/ceremonies/src/lib.rs#L396): define how long proof-of-personhood reputation is valid for and stored
   * [`set_meetup_time_offset`](https://github.com/encointer/pallets/blob/91cbd7c9c0d47c4a80c096d3b2b501625a6bb724/ceremonies/src/lib.rs#L396): finetune meetup time difference to high sun
   * [`purge_community_ceremony`](https://github.com/encointer/pallets/blob/f37679a922a675f7a98a9006704d32fe6c3874ec/ceremonies/src/lib.rs#L451): garbage collect outdated reputation if necessary due to parameter changes
   * [`set_time_tolerance`](https://github.com/encointer/pallets/blob/1d52b0775471270bbcb42686f02555d5367aa68f/ceremonies/src/lib.rs#L452) set how precisely the meetup time needs to be attested to be considered valid
   * [`set_location_tolerance`](https://github.com/encointer/pallets/blob/1d52b0775471270bbcb42686f02555d5367aa68f/ceremonies/src/lib.rs#L464) set how precisely the meetup location needs to be attested to be considered valid
* Manage Currency/Fee Parameters
   * [`setFeeConversionFactor`](https://github.com/encointer/pallets/blob/1d52b0775471270bbcb42686f02555d5367aa68f/balances/src/lib.rs#L104) tune community currency extrinsic fees relative to KSM fees and community income

* Treasury
   * [accept / reject treasury spend proposals](https://github.com/encointer/encointer-parachain/pull/100) (the treasury receives KSM fees for extrinsics plus potential donations

In the beginning, onboarding of new communites will be permissioned, subject to the Encointer Association's approval. The team sees no other way to avoid bot communities squatting the earth's surface. Over time, a web-of-trust will build and new communities can be onboarded by endorsement of other communites


- Encointer is ready to start its first community in Zurich.
- Fees for transactions can be paid in KSM or community currencies.
- The Encointer Association members form the council of the Encointer parachain and have the authority to adjust protocol parameters and manage communities.
- The council can adjust ceremony schedules, add or remove meetup locations, update community metadata, and change demurrage and income parameters.
- The council also has the power to manage ceremony parameters and memory, manage currency and fee parameters, and accept or reject treasury spend proposals.

#1405 Encointer Runtime Upgrade to Full Functionality