Sovrin Governance Spotlight: Economic Advisory Council

August 20, 2019

Earlier this year, issuers of Sovrin-based verifiable credentials started writing directly to the Sovrin Public Ledger. This significant milestone for the Sovrin Network not only supports the mission of the Sovrin Foundation in providing Identity for All, but also the work of the Sovrin Stewards and Transaction Endorsers that are bringing self-sovereign identity products and services to market. Examples of their ledger writes include DIDs, schema, credential definitions, and other GDPR compliant pieces of public information that abide by the Sovrin Governance Framework (SGF) and Transaction Endorser Agreement. To help support network administration and operations, the Sovrin Foundation began collecting a modest fee for these writes, payable in US dollars. The associated fee table was developed by the Sovrin Economic Advisory Council (EAC) and recommended to the Sovrin Foundation Board of Trustees (BoT) for adoption. 

The purpose of the EAC is to advise the BoT on the financial sustainability of the Sovrin Network as a global public utility for self-sovereign identity.

The EAC is also responsible for the governance of the controlled document entitled Sovrin Economic Policies contained in the SGF, including incentive structures and mechanisms, regulatory compliance and for recommending fee schedules for access to the Sovrin Public Ledger.

The EAC operates under the following principles:

Foster network growth—All economic policies should have at their root a bias toward enhancing and encouraging network adoption and growth both in volume and variety of use.

Avoid central banking function—In keeping with the SGF’s Core Principle of Decentralization by Design (see SGF sec. 2.8), the EAC shall strive to develop economic policies for Sovrin Infrastructure that avoid the Sovrin Foundation needing to serve in a central banking function. This does not preclude central bank-like decisions in the early days of the network; however, there must always be a path to decentralization.

Minimize friction—The EAC shall strive to develop policies that minimize the friction for Sovrin Entities to perform value exchange.

Regulatory compliance—The EAC shall work to ensure that the policies it recommends have maximum compatibility with global regulatory requirements, including KYC (Know Your Customer), AML (Anti-Money Laundering), ATF (Anti-Terrorist Financing), and other financial regulations.

The EAC is defined as a ‘council’ as per the SGF because the chairperson of the EAC is appointed by the Sovrin BoT. (see SGF sec. 2). The EAC is comprised of nine members appointed by the BoT and nominated by members of the BoT Executive Committee. All Sovrin Governing Bodies operate under the Core Principles in section 2 of the Sovrin Governance Framework V2. 

Three members of the EAC are selected from the BoT at invitation of BoT Chair. Three members are ex-officio, meaning they are members of the EAC because they hold a certain role in the Sovrin community. The ex-officio members are the Sovrin Foundation Executive Director and Chief Financial Officer, along with the Chair of the Sovrin Governance Framework Working Group. At-large members are nominated by the Sovrin community, with priority given to experts in finance, cryptoeconomics, network ecosystems, and/or digital governance. EAC members recommend a first and second choice to the BoT for approval. Upon approval, invitations are extended to the new at-large members by the EAC Chair. EAC members, other than ex-officio members serve two-year terms, renewable at the invitation of the BoT.

EAC Membership (as of August 2019):

Chairman

Roy Avondet, Chief Financial Officer, Sovrin Foundation

Members

In a recent Forrester report titled “Decentralized Digital Identity: A Primer, Why “Bring Your Own Identity” Is A Trend To Watch” by Fatemeh Khatibloo, Martha Bennett, and Andras Cser, Forrester directly mentions its belief that an emerging model of “decentralized digital identity (DDID)” will ultimately replace the models that exist today. Forrester defines DDID as “A trusted digital identity that people (and businesses) can securely share with entities that request it, without relying on a central data repository or bits of paper.”

The Sovrin Foundation has undoubtedly benefited from the valuable guidance of the EAC in bringing a fee payment system for organizations to now write directly to the Sovrin ledger. The EAC plays a vital role in helping support the payment systems required for the many organizations that are currently using the Sovrin Network to issue self-sovereign, verifiable digital credentials.

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For more information about the governance of the Sovrin Foundation, please check out the Governance tab located on Sovrin.org

Photo by Ramiro Mendes on Unsplash

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