10.3 Governance Mechanisms and Upgrade Proposals

LQDTY follows a structured governance proposal system, allowing the community to introduce and vote on improvements.

Protocol Upgrades: Changes to the consensus mechanism, transaction finality, gas fee structures, or technical improvements.
Treasury Allocations: Funding proposals for developer grants, security audits, liquidity incentives, and ecosystem growth.
New Feature Implementation: Approving the launch of new DeFi applications, interoperability enhancements, or blockchain integrations.
Economic & Staking Adjustments: Adjustments to staking rewards, validator incentives, or LQDTY tokenomics.
Security & Compliance Adjustments: Updates to biometric authentication, AML/KYC enforcement, and regulatory policies.

10.3.1 Proposal Submission Process

Governance proposals must follow a structured submission and review process to maintain efficiency.

Proposal Submission
- Any veLQDTY holder can submit a governance proposal by locking a minimum threshold of LQDTY tokens as collateral to prevent spam proposals.
- A formal proposal document outlining the suggested change, implementation details, and expected impact must be submitted.
Step 2: Community Discussion & Feedback
- Proposals are published on the LQDTY governance forum for open discussion.
- Community members provide feedback, propose modifications, and evaluate the proposal's feasibility.
Governance Voting
- Once the discussion period ends, the proposal moves to an on-chain vote.
- Token holders use veLQDTY to cast votes, with voting power proportional to the amount and duration of their locked LQDTY tokens.
Proposal Execution
- If a proposal receives majority approval, it is scheduled for implementation by core developers and validators.
- Changes are automatically enforced via smart contracts to ensure a trustless governance process.