Governance Framework

Governance Model

Current Stage: Owner-Controlled (Bootstrap Phase)

Current Authority:

Owner (Multisig controlled by founding team)
├─ Add/remove venues
├─ Configure protocol parameters
├─ Emergency pause/resume
├─ Withdraw protocol fees
└─ Technology upgrades

Rationale:

• Early protocol needs rapid iteration

• Parameter optimization requires testing

• Security decisions require expertise

• Gradual transition to decentralization planned

Future Stage: Community DAO Governance

Transition Timeline:

• Year 1: Owner authority with community input

• Year 2: Hybrid governance (owner + DAO voting)

• Year 3+: Full DAO governance (owner advisory role)

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Governance Parameters

Fee Structure Governance

Current Authority: Owner can adjust

Decision Framework:

Fee Considerations:
├─ User competitiveness (not too high)
├─ Protocol sustainability (must support operations)
├─ Ecosystem alignment (incentivizes participation)
└─ Market conditions (adjust for cycles)

Example Changes:
├─ Increase from 0.1% to 0.15% (rare)
├─ Decrease from 0.1% to 0.05% (if operating efficiently)
└─ Conditional fees (time-based, volume-based)

Venue Integration Decisions

Current Authority: Owner adds/removes venues

Selection Criteria:

New Venue Evaluation:
├─ Liquidity (minimum $1M required)
├─ Security (code audited, established)
├─ Fee structure (reasonable for users)
├─ User demand (community requests)
└─ Strategic value (ecosystem fit)

Suspension Criteria:
├─ Failure rate (>10 consecutive failures)
├─ Security issues (exploited, compromised)
├─ Regulatory concerns (censoring users)
└─ Poor liquidity (fell below minimums)

Risk Parameter Tuning

Configurable Parameters:

Slippage Configuration:
├─ Base slippage: 50 BPS (current)
├─ Impact multiplier: 1.5x (current)
├─ Max slippage: 500 BPS (current)

Liquidity Requirements:
├─ Minimum USD liquidity: $1M (current)
└─ Enforcement: Yes (current)

TWAP Oracle:
├─ Time interval: 1800s / 30min (current)
├─ Max deviation: 500 BPS (current)
└─ Enforcement: Yes (current)

Router Health:
├─ Max failures before suspend: 10 (current)
└─ Manual re-enabling: By owner

Split Trading:
├─ Min impact to trigger: 100 BPS (current)
├─ Max splits: 4 (current)
└─ Auto-enabled: Yes (current)

Adjustment Authority: Owner (with community input in future)

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Community Governance (Future Model)

Governance Token (MBD)

Token Mechanics:

Total Supply: 1,000,000,000
Voting power: 1 token = 1 vote
Governance participation: Token holders vote

Distribution:
├─ Early supporters: 400M
├─ Team & advisors: 200M (vested)
├─ Community programs: 200M (distributed over time)
├─ Treasury: 200M (DAO controlled)

Voting Mechanisms

Snapshot Off-Chain Voting

For Lower-Risk Decisions:

Voting Process:
1. Community proposes change
2. Discussion period: 7 days
3. Voting period: 7 days (Snapshot)
4. Simple majority (>50%) passes
5. Implementation by owner

Example Decisions:
├─ Fee percentage adjustments (small)
├─ Venue recommendations
├─ Parameter fine-tuning
└─ Community programs

On-Chain Governance Voting

For High-Impact Decisions:

Voting Process:
1. Community proposes major change
2. Discussion period: 14 days
3. Voting period: 14 days (On-Chain)
4. Supermajority (66%+) required to pass
5. Time-lock: 48-hour delay before implementation
6. Automatic on-chain execution

Example Decisions:
├─ Major fee restructuring
├─ Governance token economics changes
├─ Core protocol upgrades
├─ Treasury allocation (>$1M)
└─ Founding team removal/replacement

Proposal Process

Standard Proposal Lifecycle:

Phase 1: Discussion (Community Forum)
├─ Duration: 5 days
├─ Anyone can propose
├─ Community provides feedback
└─ Refine based on input

Phase 2: Temperature Check (Snapshot)
├─ Duration: 7 days
├─ Community votes yes/no/abstain
├─ Non-binding opinion
└─ >50% yes = move to Phase 3

Phase 3: Formal Proposal (On-Chain)
├─ Duration: 14 days voting
├─ Binding vote
├─ 66%+ approval required
└─ Passes if threshold met

Phase 4: Implementation
├─ Time-lock: 48 hours
├─ Developers implement
├─ Changes take effect
└─ Community monitors

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Treasury Governance

Current Treasury Management

Authority: Owner-controlled multisig

Accumulated Fees → Protocol Treasury
├─ Displayed publicly on dashboard
├─ Monthly transparency reports
└─ Allocated to:
    ├─ Team operations
    ├─ Security audits
    ├─ Infrastructure
    ├─ Community programs
    └─ Treasury reserve

Future Treasury Governance

Community Control (Post-DAO):

DAO Treasury Decision-Making:
├─ Budget proposals annually
├─ Allocation votes on major expenses
├─ Public spending dashboard
├─ Quarterly community reports

Spending Categories:
├─ Protocol Development
├─ Security & Audits
├─ Marketing & Community
├─ Research & Innovation
├─ Treasury Reserves (rainy day fund)
└─ Governance Operations

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Risk Governance

Security Parameter Changes

High-Risk Changes (Require Extensive Governance):

Changes affecting fund security:
├─ Slippage tolerance increases
├─ Liquidity requirement decreases
├─ TWAP protection disabling
└─ Router safety mechanism changes

Governance Process:
1. Extended discussion period: 30 days
2. Community security experts review
3. Multiple voting rounds
4. 75%+ supermajority required
5. 7-day time-lock before implementation

Emergency Powers

Owner Emergency Authority:

Situations requiring immediate action:
├─ Smart contract vulnerability discovered
├─ Venue experiencing attack/failure
├─ Protocol experiencing malfunction
└─ User fund security at risk

Emergency Powers:
├─ Pause protocol immediately
├─ Disable problematic venues
├─ Adjust risk parameters down
└─ Activate circuit breakers

Accountability:
├─ Must disclose reason immediately
├─ Community vote on sustained action
├─ If community votes down, action reversed
└─ Post-mortem analysis required

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Community Participation

Governance Participation Incentives

Initial Incentives:

Early DAO Participation Program:
├─ Governance participation tokens (non-voting)
├─ Bonus rewards for voting
├─ Delegate incentives
└─ Active proposal creator bonuses

Delegation

Voting Delegation:

Token holders can:
├─ Vote directly on proposals
├─ Delegate voting power to others
├─ Delegate to multiple delegates
└─ Change delegation at any time

Use Cases:
├─ Busy token holders delegating to trusted community members
├─ Expert voters delegating to specialists
├─ Liquid democracy model
└─ Flexible participation

Representative Governance

Future: Governance Committee:

Elected Community Representatives:
├─ Elected by token holders (annual)
├─ Represent different stakeholder groups
│  ├─ Retail traders
│  ├─ Institutional traders
│  ├─ DEX venues
│  ├─ Protocol developers
│  └─ LPs/Yield farmers
├─ Propose governance agenda
└─ Act as community voice

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Constitutional Governance

Core Principles (Immutable)

Never Compromised:

1. Decentralization
   - No reverting to centralized backend
   - On-chain execution always
   - No single point of failure restored

2. Censorship Resistance
   - Never censor user addresses
   - Never block token types (except security)
   - Permissionless access maintained

3. User Fund Security
   - No governance vote can reduce fund safety
   - Emergency security actions always allowed
   - User funds always recoverable

4. Transparency
   - All governance votes public
   - All fee allocations transparent
   - All protocol changes disclosed

Amendment Threshold

Changing Core Principles:

Required:
├─ 90% token holder approval
├─ 90+ day discussion period
├─ Multiple voting rounds
├─ Community expert review
└─ Unanimous approval from security team

Intent:
- Core principles effectively immutable
- Prevents erosion of decentralization
- Protects user interests always

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Governance Transparency

Public Records

All Governance Actions:

├─ Proposal history (archived)
├─ Voting records (per address)
├─ Treasury reports (monthly)
├─ Parameter change log
└─ Meeting notes (community calls)

Accessibility:
├─ Public dashboard
├─ GitHub repository
├─ Community forum
└─ Quarterly reports

Communication Channels

Governance Communication:

├─ Official Discord: Community discussion
├─ Forum: Formal proposals & voting
├─ Telegram: Real-time updates
├─ Twitter: Announcements
├─ GitHub: Technical discussion
└─ Governance portal: On-chain voting

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Dispute Resolution

Disagreement Resolution

Process for Governance Conflicts:

Step 1: Discussion
├─ Extended comment period
├─ Address concerns
└─ Seek common ground

Step 2: Mediation
├─ Governance committee involvement
├─ Expert review
└─ Recommended compromise

Step 3: Vote
├─ If unresolved, community votes
├─ 66%+ approval required
└─ Binding decision

Step 4: Reversal Clause
├─ If decision proves harmful
├─ Can be reversed in next cycle
└─ Floor amendments allowed

Emergency Shutdown

Last Resort:

Extreme Scenario:
├─ Protocol fundamentally compromised
├─ Governance system corrupted
├─ Community votes for shutdown

Process:
├─ 75% token holder vote required
├─ 30-day time-lock
├─ Secure user fund recovery
└─ Controlled shutdown

Prevention: 
- Strong governance safeguards
- Multiple security layers
- Community monitoring
- Regular audits

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Governance Evolution

Year 1: Owner-Guided (Current)

Authority: Owner with community input
├─ Owner makes final decisions
├─ Community provides input via forums
├─ Monthly town halls
└─ Feedback incorporated in updates

Year 2: Hybrid Governance

Authority: Owner + DAO voting
├─ Low-impact decisions: Owner decides
├─ Medium-impact: Owner + community vote
├─ High-impact: Community vote required
└─ Progressive delegation of authority

Year 3+: Full DAO Governance

Authority: Community token holders
├─ All protocol decisions: DAO votes
├─ Owner becomes advisor/executor
├─ Treasury: DAO-controlled
├─ Protocol: Community-governed

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Conclusion: Governance Philosophy

Core Belief:

Decentralization must extend to governance.

A protocol cannot be truly decentralized if controlled
by centralized decision-makers. Governance decentralization
is as important as technical decentralization.

MonBridge commits to progressively transferring authority
to the community while maintaining strong protections
for core principles and user funds.

Governance Guarantees:

• ✅ Progressive decentralization path

• ✅ Community empowerment timeline

• ✅ Transparent decision-making

• ✅ Protected core principles

• ✅ User-aligned incentives

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Next: See FAQ & Glossary for common questions and terminology.