Governance Mechanism

The advantages of decentralization are the decentralization of governance and its self-evolution mechanism. Defed hopes to unleash the full potential of DAO and to enable Defed to achieve self-growth through the gradual improvement of the community governance mechanism, while having the ability to self-evolve, in the mechanism, procedures, risk control model and other levels, continuous improvement.

With the development of Defed, there will be full decentralization and Defed hopes to achieve a balance of participation, motivation, self-monitoring and policy issuance under the governance of the community.

Early Defed Governance will be a process including propose, vote, evaluate, and implement. As the community expands, Defed expects the community to be fully empowered and to establish a governance framework for Defed's future, long-term growth and effective governance.

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DEFED's governance mechanism is based on the following rules:

• The governance interest is limited to the holders of veDEFE.

• The governance of DEFED is driven by a governance forum (Snapshot Space) and DEFED Improvement Proposals (DIPs) approved by veDEFE holders.

Governance Process

1. DIP created by qualified veDEFE holders.

2. Refine the DIP with community discussion.

3. Approve or reject the DIP according to the community voting, 1 veDEFE = 1 vote.

4. The DEFED founding team organizes evaluation and implements the proposal.

What is the referendum proposal?

Proposals that directly affect the interests of all veDEFE holders must be put to a referendum, and the implementation can only be evaluated after they have been approved by veDEFE holders. At this stage, the referendum proposal includes these types as following:

Proposals that directly affect the income of the agreement (e.g. adjustment of the percentage of the fee, adjustment of the base spread of the loan).Proposals involving adjustment of incentive parameters (e.g. adjustment of incentive factors under the Pay to Earn mechanism).

Standard for Proposal Approval

A proposal must meet both participation and support to be approved for evaluation and implementation.

Participation is the percentage of veDEFEs who voted for the proposal out of all veDEFEs.

Support is the percentage of veDEFEs voted for the "yes" out of all veDEFEs voted. For example:

1. If the quorum is 30% and the support is 60%, the "yes" is 18%, and "no" is 7% of the total votes, the BIP will not be passed, because 18%+7% = 25% < 30%.

2. If the quorum is 30% and the support is 60%, the "yes" is 23% and "no" is 8% of the total votes, the BIP will be passed, because 23%+8% = 31% > 30%, and 23% / (23% + 8%) = 74% > 60%.

How to participate？

Anyone who wants to get involved in DEFED governance can join our Discord channel and governance forum.

But if you want to participate in the approval of the proposal, you need to hold veDEFE.

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Initially conceived governance mechanism is bound to have many limitations and shortcomings. We believe that the improvement of the governance mechanism itself is one of the processes of DEFED community development and growth; with the development of DEFED, the relevant content of the governance mechanism will also continue to modify and improve.