info_tfgrid/collections/projectinca/decentralization/decentralization4.md

# **The ThreeFold’s 4.0 Decentralization Model**

## Fully Decentralized Farming - TF Nodes

Today more than 500 farmers host the nodes which make up the TF Grid Network.

None of the ThreeFold Companies or its team has the ability to break this model, its our aim to have the farmers independant completely from Threefold.

We expect to have many thousands of independent compute, storage, Network farmers in the world. This is the true nature of our decentralization.

The communication between the marketplace, 3Nodes, Farming Pool Agents and other participants all goes over the mycelium network which leads to an full peer2peer control and communication plane. All communication is end2end encrypted, all messages are signed by the participants.

The billing & tracking of capacity in v 4.0 will be based on a mutual credit and capacity accounting system which is carried and peer2peer executed by the farmers.

## Farming Pools

Many people will want to he a hoster of capacity but not have to deal with the duties of being a farmer, they can connect to a farming pool and add their capacity to such a pool.

They can chose the farming pool they like, farming pools can be DAO's by themselves, they organize their own governance indepent of ThreeFold. A Farming pool defines the price, service levels, ... A Farming pool defines how the proceeds are split over their members.

We expect that more than 80% of the capacity in the future will be provider over Farming Pools, in our opinion this leads to a super decentralized structure while making it possible to provide strong SLA's.

## Grid Enhancement Proposals (GEP's)

The decisions that shape the technology and standards of ThreeFold are driven by the community through the Grid Enhancement Proposal (GEP) program. These proposals are reviewed and approved farmers, technical steering committee as well as the cooperative, ensuring that the best ideas rise to the top. 

The GEPS are proposed by the ThreeFold Cooperation and/or ThreeFold Dubai.

The GEPS need to be voted for by the farming and user community, the exact rules of voting are still being worked on, we are learning from our 3.x experience.

GEPS deal with

- approve functionality & roadmap (priorities)
- approve changes in protocol or anything which has impact on fundamental working of the TGGrid

## Grid Upgrade Proposals (GUP's)

GUPs us much more practical, its providing a control path for code changes, community members or farmers will probably lack the knowledge as required to have meaningful review capability on these proposals.

GUPS deal with

- code updates on production TFGrid

## TF Protectors run the TF Grid Validators

We have been learning from what Hashgraph did and we like their model (see here for more [info](https://hedera.com/blog/decentralized-on-hedera)).

ThreeFold’s validator consensus model is addressing the challenges of decentralization in a practical way. It brings together up to 9 to 30 term-limited organizations (TF Protectors) from across multiple continents, ensuring a truly global perspective. 

Each TF Protector does the following

- operate a [TF Validator Clusters](TFValidatorCluster.md), which requires an investment and requires an operational team
- validate the code written and sign off on the changes (validation step on code & functionality)
- validate the GEP's and execute a VETO right if needed, the TF Protectors can stop a GEP.
- validate and approve the GUP's

Each Protector member has an equal vote, which prevents any single entity from gaining undue influence and keeps the governance balanced and fair.

ThreeFold’s proof-of-stake model (v4.x) has been designed to prevent the concentration of power. Nodes gain influence only when $TFT or $INCA is staked to them by individual users, ensuring that the community has a direct role in the network’s governance. 

## TF Cooperative

In 2025, we plan to establish a Cooperative structure that will unite and represent the interests of all TFGrid Farmers as well as TFGrid Users.

Cooperatives are powerful, regulated entities with a long history of promoting decentralization and community-driven governance. By forming a cooperative, we can create a structure that not only aggregates the voices and needs of our farmers and users but also provides a legally recognized framework for truly decentralized decision-making.

Cooperatives are uniquely suited to the decentralized ethos of the ThreeFold Grid. They operate on democratic principles, ensuring that each member—whether a farmer or user—has an equal say in the direction and operation of the network. This approach aligns perfectly with our vision of a decentralized, peer-to-peer infrastructure where power is distributed, not concentrated.

Moreover, cooperatives are recognized globally as legitimate and effective governance structures. This recognition will help us engage with regulatory bodies and broader societal systems, ensuring that the decentralized nature of the ThreeFold Grid is respected and protected as we continue to grow.

The TF Grants, distribution of Farming & Promotion Rewards will all be arranged by the TF Cooperative.

Please note that the rewards and grants only unlock over 3 to 4 years.

As long as the TF Cooperative is not up and running ThreeFold Dubai will keep on executing this role and provide full transparancy to the community.


## Development & OpenSource

The development of ThreeFold is an open, collaborative process. All software powering the network, including services and developer tools, is open-sourced under an Apache 2.0 license. The decentralized development model encourages contributions from a wide range of participants, including the ThreeFold developer community. This approach improves innovation and ensures that the platform continuously evolves to meet the needs of its users.