Protocol Governance

Learn about governance mechanisms in liquid staking protocols.

Last updated: 2024-03-21
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Overview

A decentralized governance system is essential for managing protocol parameters, fee structures, and protocol upgrades in a transparent and community-driven manner. This guide covers the implementation of a comprehensive governance system for your liquid staking protocol.

Governance System Flow

Key Features

  • Token-weighted voting
  • Timelock mechanisms
  • Impact analysis
  • Emergency procedures

Proposal System

Implement a robust proposal system that allows stakeholders to submit and review governance proposals.

Parameter Updates

Proposals for modifying protocol parameters like fee rates, thresholds, and timelock periods.

Protocol Upgrades

Proposals for implementing protocol upgrades, new features, or security improvements.

Emergency Actions

Proposals for emergency measures like pausing operations or implementing critical fixes.

Proposal System Implementation

1pub struct Proposal {
2    /// Unique proposal identifier
3    pub id: u64,
4    
5    /// Proposal creator
6    pub creator: Pubkey,
7    
8    /// Proposal type
9    pub proposal_type: ProposalType,
10    
11    /// Proposal title
12    pub title: String,
13    
14    /// Proposal description
15    pub description: String,
16    
17    /// Proposed changes
18    pub changes: Vec<ProposedChange>,
19    
20    /// Voting period
21    pub voting_period: VotingPeriod,
22    
23    /// Required quorum
24    pub required_quorum: u64,
25    
26    /// Current status
27    pub status: ProposalStatus,
28}
29
30impl Proposal {
31    pub fn create_proposal(
32        &mut self,
33        creator: &AccountInfo,
34        params: ProposalParams,
35    ) -> ProgramResult {
36        // Verify proposal creation requirements
37        self.verify_creation_requirements(creator)?;
38        
39        // Set proposal parameters
40        self.creator = *creator.key;
41        self.proposal_type = params.proposal_type;
42        self.title = params.title;
43        self.description = params.description;
44        self.changes = params.changes;
45        
46        // Set voting parameters
47        self.voting_period = VotingPeriod::new(
48            Clock::get()?.unix_timestamp,
49            params.duration,
50        );
51        self.required_quorum = self.calculate_required_quorum()?;
52        
53        // Initialize status
54        self.status = ProposalStatus::Active;
55        
56        // Emit proposal creation event
57        emit!(ProposalCreated {
58            proposal_id: self.id,
59            creator: self.creator,
60            proposal_type: self.proposal_type,
61            timestamp: self.voting_period.start_time,
62        });
63        
64        Ok(())
65    }
66    
67    fn verify_creation_requirements(
68        &self,
69        creator: &AccountInfo,
70    ) -> ProgramResult {
71        // Verify creator is a signer
72        if !creator.is_signer {
73            return Err(GovernanceError::SignatureMissing.into());
74        }
75        
76        // Verify creator has sufficient voting power
77        let voting_power = self.get_voting_power(creator.key)?;
78        if voting_power < self.min_proposal_power {
79            return Err(GovernanceError::InsufficientVotingPower.into());
80        }
81        
82        Ok(())
83    }
84}

Voting System

Implement a secure and efficient voting system with proper power calculation and vote counting.

Voting System Implementation

1pub struct VotingSystem {
2    /// Voting power snapshot
3    pub power_snapshot: VotingPowerSnapshot,
4    
5    /// Vote registry
6    pub vote_registry: VoteRegistry,
7    
8    /// Quorum settings
9    pub quorum_settings: QuorumSettings,
10}
11
12impl VotingSystem {
13    pub fn cast_vote(
14        &mut self,
15        voter: &AccountInfo,
16        proposal_id: u64,
17        vote: Vote,
18    ) -> ProgramResult {
19        // Verify voter eligibility
20        self.verify_voter_eligibility(voter, proposal_id)?;
21        
22        // Calculate voting power
23        let voting_power = self.power_snapshot
24            .get_voting_power(voter.key)?;
25            
26        // Record vote
27        self.vote_registry.record_vote(
28            proposal_id,
29            voter.key,
30            vote,
31            voting_power,
32        )?;
33        
34        // Check if quorum is reached
35        if self.has_reached_quorum(proposal_id)? {
36            self.handle_quorum_reached(proposal_id)?;
37        }
38        
39        // Emit vote cast event
40        emit!(VoteCast {
41            proposal_id,
42            voter: *voter.key,
43            vote,
44            voting_power,
45            timestamp: Clock::get()?.unix_timestamp,
46        });
47        
48        Ok(())
49    }
50    
51    pub fn calculate_result(
52        &self,
53        proposal_id: u64,
54    ) -> Result<VoteResult, ProgramError> {
55        let votes = self.vote_registry
56            .get_proposal_votes(proposal_id)?;
57            
58        let mut for_votes = 0;
59        let mut against_votes = 0;
60        let mut abstain_votes = 0;
61        
62        for vote in votes {
63            match vote.vote_type {
64                VoteType::For => for_votes += vote.power,
65                VoteType::Against => against_votes += vote.power,
66                VoteType::Abstain => abstain_votes += vote.power,
67            }
68        }
69        
70        Ok(VoteResult {
71            for_votes,
72            against_votes,
73            abstain_votes,
74            quorum_reached: self.has_reached_quorum(proposal_id)?,
75            passed: self.has_passed(for_votes, against_votes)?,
76        })
77    }
78}

Execution System

Implement secure execution mechanisms for approved proposals with proper timelocks and verification.

Execution System Implementation

1pub struct ExecutionSystem {
2    /// Timelock settings
3    pub timelock: TimelockSettings,
4    
5    /// Execution queue
6    pub execution_queue: ExecutionQueue,
7    
8    /// Execution authority
9    pub execution_authority: Pubkey,
10}
11
12impl ExecutionSystem {
13    pub fn queue_execution(
14        &mut self,
15        proposal_id: u64,
16        authority: &AccountInfo,
17    ) -> ProgramResult {
18        // Verify proposal is approved
19        self.verify_proposal_approved(proposal_id)?;
20        
21        // Calculate timelock period
22        let timelock_end = Clock::get()?.unix_timestamp
23            .checked_add(self.timelock.delay_period)
24            .ok_or(GovernanceError::TimestampOverflow)?;
25            
26        // Queue execution
27        self.execution_queue.add_execution(
28            proposal_id,
29            timelock_end,
30            authority.key,
31        )?;
32        
33        // Emit queued event
34        emit!(ExecutionQueued {
35            proposal_id,
36            timelock_end,
37            authority: *authority.key,
38        });
39        
40        Ok(())
41    }
42    
43    pub fn execute_proposal(
44        &mut self,
45        proposal_id: u64,
46        authority: &AccountInfo,
47    ) -> ProgramResult {
48        // Verify execution authority
49        self.verify_execution_authority(authority)?;
50        
51        // Verify timelock has passed
52        self.verify_timelock_passed(proposal_id)?;
53        
54        // Get proposal changes
55        let changes = self.get_proposal_changes(proposal_id)?;
56        
57        // Execute each change
58        for change in changes {
59            match change {
60                ProposedChange::UpdateParameter(param) => {
61                    self.execute_parameter_update(param)?;
62                }
63                ProposedChange::UpgradeProgram(upgrade) => {
64                    self.execute_program_upgrade(upgrade)?;
65                }
66                ProposedChange::EmergencyAction(action) => {
67                    self.execute_emergency_action(action)?;
68                }
69            }
70        }
71        
72        // Update proposal status
73        self.update_proposal_status(
74            proposal_id,
75            ProposalStatus::Executed,
76        )?;
77        
78        // Emit execution event
79        emit!(ProposalExecuted {
80            proposal_id,
81            executor: *authority.key,
82            timestamp: Clock::get()?.unix_timestamp,
83        });
84        
85        Ok(())
86    }
87}

Monitoring System

Implement comprehensive monitoring for governance activities and proposal impacts.

Monitoring System Implementation

1pub struct GovernanceMonitor {
2    /// Metrics collector
3    pub metrics: GovernanceMetrics,
4    
5    /// Alert system
6    pub alert_system: AlertSystem,
7    
8    /// Impact analyzer
9    pub impact_analyzer: ImpactAnalyzer,
10}
11
12impl GovernanceMonitor {
13    pub async fn monitor_governance_activity(
14        &self,
15        context: &GovernanceContext,
16    ) -> ProgramResult {
17        // Collect governance metrics
18        let metrics = self.metrics.collect(context).await?;
19        
20        // Analyze proposal impacts
21        let impacts = self.impact_analyzer
22            .analyze_proposals(context)
23            .await?;
24            
25        // Check for concerning patterns
26        if let Some(concerns) = self.detect_concerns(&metrics, &impacts)? {
27            // Generate alerts
28            self.alert_system
29                .generate_alerts(&concerns)
30                .await?;
31        }
32        
33        // Update monitoring status
34        self.update_monitoring_status(&metrics, &impacts)?;
35        
36        // Generate periodic report
37        if self.should_generate_report() {
38            self.generate_monitoring_report(&metrics, &impacts)?;
39        }
40        
41        Ok(())
42    }
43    
44    pub fn analyze_proposal_impact(
45        &self,
46        proposal: &Proposal,
47    ) -> Result<ProposalImpact, ProgramError> {
48        // Analyze parameter impacts
49        let parameter_impacts = self.analyze_parameter_impacts(
50            &proposal.changes,
51        )?;
52        
53        // Analyze security implications
54        let security_impacts = self.analyze_security_impacts(
55            &proposal.changes,
56        )?;
57        
58        // Analyze economic impacts
59        let economic_impacts = self.analyze_economic_impacts(
60            &proposal.changes,
61        )?;
62        
63        Ok(ProposalImpact {
64            parameter_impacts,
65            security_impacts,
66            economic_impacts,
67            risk_level: self.calculate_risk_level(
68                &parameter_impacts,
69                &security_impacts,
70                &economic_impacts,
71            )?,
72        })
73    }
74}
Implementation Considerations
  • Implement proper access controls and voting power calculation
  • Use timelocks for sensitive operations
  • Include emergency procedures for critical situations
  • Maintain comprehensive proposal history
  • Implement proper vote delegation mechanisms
  • Consider implementing a governance token
  • Regular audits of governance activities