Encointer aims to become a common-good parachain on Kusama. This post shall make a case for granting Encointer the privilege of a system-parachain slot.

# Why is Encointer a Common Good?

As a not-for-profit endeavor, Encointer does not fit the Kusama parachain crowdloan model. Parachain crowdloans rely on DOT holders to lend their DOT. They do so for a financial incentive exceeding their opportunity costs for disclaiming their right to stake DOT on the relay chain. Encointer cannot offer such an incentive as there is no revenue model and if there were one it would inevitably conflict with Encointer's goal to reduce inequality globally. 

Learn more about Encointer's vision to reduce inequality:

[Encointer ELI5 video (3min)](https://youtu.be/80SdkjtHcr4)

We believe an Encointer parachain is of common interest to the Kusama and Polkadot ecosystem because it offers a sybil defense mechanism and a basis for democracy.

# Value Proposition: Sybil Defense

Encointer is a _unique identity system_ and solves one of Vitalik Buterin's [hard problems in cryptocurrency](https://github.com/ethereum/wiki/wiki/Problems/89fd07ffff8b042134e4ca67a0ce143d574016bd#metrics). The Encointer protocol ([whitepaper](https://github.com/encointer/whitepaper/raw/master/encointer_whitepaper.pdf)) enables every human to maintain a unique proof of personhood (uPoP) through pseudonym key-signing parties.

Among its contenders ([Idena](https://idena.io/), [BridghtId](https://www.brightid.org/), [Trustlines](https://trustlines.network/), [CirlesUBI](https://joincircles.net/)), Encointer claims to have the most secure sybil defense mechanism. It requires physical participation at concurrent key signing meetups with randomized participants in randomized locations within a limited region in regular intervals. If the majority of a community is honest, there can be no sybils. Other projects use social graph approaches or randomized bilateral video chats which may be less involved and more inclusive - but also less secure.

Encointer also goes to great lengths to [protect your privacy](https://book.encointer.org/ssi.html#privacy-considerations) - which is even more important if you can only maintain _one_ _single_ _unique_ identity.

See our [Sybil-defense DEMO video (6min)](https://youtu.be/Fw2dalJO1hM)

## Democracy

Kusama is governed by free-market capitalism. Who has more coin has more say, or: who has _more to loose_ has more say. For many financial applications this might be a sound governance design. But there are other applications where we require democratic governance, where every human should have one vote. Such applications are:
- Self-sovereign identiy
- Reputation systems
- Decision making on off-chain matters, not represented by on-chain token holdings
- Global commons governance (human rights, fighting climate change, nuclear disarmament, AI and bioengineering regulations. (See [GloCo](https://www.gloco.ch/))

Encointer enables online democracy - on a local to global scale.

## Airdrops

Encointer itself leverages its uPoP sybil defense for issuing a universal basic income to every human. Other platforms may want to use uPoP for their token airdrops or faucets.

# Native Token, Fees and Financing of operation

As a _common good parachain_, Encointer does not seek to have its own native token.

Encointer will use DOT/KSM as its native token. Transaction fees will be charged in DOT/KSM and will be collected in Encointer's treasury to be spent on infrastructure maintenance and protocol improvements.

Encointer will take measures to adjust fees to mitigate the volatility of DOTs and ensure inclusion of the global south. Midterm, purchasing-power adjusted fees are planned to be used on [SubstraTEE sidechains](https://polkadot.polkassembly.io/post/111) where participants pay fees in their local currency in a reasonable relation to their basic income in such currency. As soon as this is established, parachain fees will only be paid by sidechain validators and 3rd party parachains requesting sybil-defense, not by Encointer community members anymore.

Encointer doesn't plan to rely on Kusama Treasury funding. Depending on circumstances and adoption rates, we might propose treasury spending if needed to fulfill Encointer's purpose.

# Governance

The Encointer parachain will feature a similar [governance design like Kusama](https://polkadot.network/polkadot-governance/). However, decision making will be based on democratic voting instead of coin voting. Every person participating in Encointer ceremonies regularly will have one vote to elect council members or vote on referenda.

During an initial phase, the [Swiss Encointer Association](https://encointer.org/about/) will define the set of trusted communities whose members will be allowed to vote with equal power. Over time, an unpermissioned web-of-trust will evolve based on inter-community attestations and trade.

Certain governing rights touching Kusama Ecosystem Stakeholders' interests may be delegated to the Kusama Relay Chain Council.

Encointer governance is designed to be subsidiary: Decisions are taken at the lowest possible level.

1. Decisions regarding one local community (like demurrage rate, UBI nominal value a.s.o) are voted on **democratically by community members**
2. Decisions regarding the Encointer ecosystem globally (like ceremony schedule, community reputation system) are made by the **Encointer Council** (with the option of a public referendum, like Polkadot)
3. Decisions regarding the Kusama ecosystem (like sybil-defense design changes and respective fees) shall be made by **Kusama council / Relay-chain governance**

# Interoperability

Any third party application can register an application token on our parachain. Encointer ensures that every human can only claim a single account for that application for a certain time period.

Parachains can use Polkadot's XCMP to benefit from Encointer sybil defense. Off-Chain applications can use the Encointer Collator API.

## Polkadot and Kusama

Encointer aims to be deployed on both Polkadot and Kusama. It will synchronize the ceremony schedule on both parachains to ensure that meetups happen on both platform concurrently, ensuring compatibility of their sybil defense systems. It will also aim at bridging uPoP between the two.
Depending on technical developments and availability of bridging between Kusama and Polkadot, these plans may be adjusted in the future. What will remain unchanged is our ambition to provide sybil-defense on both Polkadot and Kusama.

# Timing

Due to the pandemic, plans to launch the first productive communities have been postponed, given the need to meet other people physically in proximity at Encointer ceremonies. The tech would be ready to be deployed, two testnets are constantly operated since early 2020.

Given the success of many countries to recover from the pandemic, we think summer 2021 would be a good time to launch our productive mainnet on Kusama

# Acknowledgements

We thank the 
* web3 foundation for their [grant](https://github.com/w3f/General-Grants-Program/blob/master/grants/accepted_grant_applications.md#surfing_woman-wave-5---first-quarter-2020) to develop our cantillon testnet
* Polkadot council for a treasury [grant for developing sybil-defense](https://polkadot.polkassembly.io/post/52)


: Encointer aims to become a common-good parachain on both Kusama and Polkadot. It offers a sybil defense mechanism and a basis for democracy, protects users' privacy and allows applications to issue airdrops to their users. Encointer will use DOT/KSM as its native token and collect its transaction fees in its treasury. Its governance will be based on local democratic voting for global decisions and Kusama council will govern certain rights touching stakeholders' interests. The mainnet is planned for launch during summer of 2021.

#610 Encointer application for a common good parachain slot