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LP-10094

Governance Framework Research

Draft

Research on decentralized governance models and implementation strategies for Lux Network

Created
2025-01-23
researchgovernance
DiscussionsEdit on GitHub

Abstract

This research LP explores governance frameworks for the Lux Network, analyzing different decentralized governance models, voting mechanisms, proposal systems, and treasury management. It examines how Lux's multi-chain architecture enables innovative governance approaches and provides recommendations for building an effective, inclusive governance system.

Motivation

Effective governance is essential for:

  1. Decentralization: Distribute decision-making power
  2. Evolution: Adapt to changing market conditions
  3. Treasury Management: Allocate resources effectively
  4. Community Alignment: Ensure stakeholder representation
  5. Protocol Upgrades: Coordinate network improvements

Current Implementation

Governance Components in Ecosystem

Existing Governance Touchpoints

// Current governance elements across repos
interface GovernanceArchitecture {
  voting: {
    repo: "luxfi/governance";
    mechanism: "Token-weighted voting";
    delegation: true;
    timelock: "48 hours";
  };
  
  treasury: {
    repo: "luxfi/treasury";
    multisig: "5 of 9";
    funds: ["Development", "Ecosystem", "Community"];
  };
  
  proposals: {
    types: ["Protocol", "Treasury", "Parameter"];
    threshold: "100,000 LUX";
    quorum: "10% of supply";
  };
}

Research Findings

1. Voting Mechanisms

Quadratic Voting Implementation

// Quadratic voting to reduce whale influence
contract QuadraticGovernance {
    struct Proposal {
        uint256 id;
        string description;
        uint256 startTime;
        uint256 endTime;
        uint256 totalVotes;
        mapping(address => uint256) voterCredits;
        mapping(uint256 => uint256) optionVotes;
        bool executed;
    }
    
    mapping(uint256 => Proposal) public proposals;
    mapping(address => uint256) public votingPower;
    
    function vote(
        uint256 proposalId,
        uint256 option,
        uint256 credits
    ) external {
        Proposal storage proposal = proposals[proposalId];
        require(block.timestamp >= proposal.startTime, "Not started");
        require(block.timestamp < proposal.endTime, "Ended");
        
        uint256 currentCredits = proposal.voterCredits[msg.sender];
        uint256 totalCredits = currentCredits + credits;
        
        // Quadratic cost: votes = sqrt(credits)
        uint256 currentVotes = sqrt(currentCredits);
        uint256 newVotes = sqrt(totalCredits);
        uint256 additionalVotes = newVotes - currentVotes;
        
        // Check user has enough voting power
        require(
            votingPower[msg.sender] >= totalCredits,
            "Insufficient voting power"
        );
        
        proposal.voterCredits[msg.sender] = totalCredits;
        proposal.optionVotes[option] += additionalVotes;
        proposal.totalVotes += additionalVotes;
        
        emit VoteCast(msg.sender, proposalId, option, additionalVotes);
    }
    
    function sqrt(uint256 x) internal pure returns (uint256) {
        if (x == 0) return 0;
        uint256 z = (x + 1) / 2;
        uint256 y = x;
        while (z < y) {
            y = z;
            z = (x / z + z) / 2;
        }
        return y;
    }
}

2. Multi-Chain Governance

Cross-Chain Coordination

// Governance across Lux's eight chains
contract MultiChainGovernance {
    struct ChainWeight {
        uint256 chainId;
        uint256 weight;     // Voting weight multiplier
        address governor;   // Chain-specific governor
    }
    
    struct CrossChainProposal {
        bytes32 proposalHash;
        uint256[] targetChains;
        bytes[] calldata;
        uint256 totalVotes;
        mapping(uint256 => uint256) chainVotes;
        mapping(uint256 => bool) chainExecuted;
    }
    
    mapping(uint256 => ChainWeight) public chainWeights;
    mapping(bytes32 => CrossChainProposal) public proposals;
    
    // Different chains have different voting weights
    constructor() {
        chainWeights[1] = ChainWeight(1, 30, address(0)); // C-Chain: 30%
        chainWeights[2] = ChainWeight(2, 25, address(0)); // X-Chain: 25%
        chainWeights[3] = ChainWeight(3, 20, address(0)); // P-Chain: 20%
        chainWeights[4] = ChainWeight(4, 15, address(0)); // T-Chain: 15%
        chainWeights[5] = ChainWeight(5, 10, address(0)); // Z-Chain: 10%
    }
    
    function aggregateVotes(bytes32 proposalHash) external view returns (uint256) {
        CrossChainProposal storage proposal = proposals[proposalHash];
        uint256 weightedVotes = 0;
        
        for (uint256 i = 0; i < proposal.targetChains.length; i++) {
            uint256 chainId = proposal.targetChains[i];
            uint256 chainVote = proposal.chainVotes[chainId];
            uint256 weight = chainWeights[chainId].weight;
            
            weightedVotes += (chainVote * weight) / 100;
        }
        
        return weightedVotes;
    }
}

3. Delegation Systems

Liquid Democracy

// Delegation with recursive vote counting
contract LiquidDemocracy {
    struct Delegation {
        address delegate;
        uint256 timestamp;
        bool isActive;
    }
    
    mapping(address => Delegation) public delegations;
    mapping(address => uint256) public votingPower;
    mapping(address => address[]) public delegators;
    
    function delegate(address to) external {
        require(to != msg.sender, "Cannot delegate to self");
        require(to != address(0), "Invalid delegate");
        
        // Check for circular delegation
        address current = to;
        while (delegations[current].isActive) {
            current = delegations[current].delegate;
            require(current != msg.sender, "Circular delegation");
        }
        
        // Remove from previous delegate
        if (delegations[msg.sender].isActive) {
            _removeDelegator(
                delegations[msg.sender].delegate,
                msg.sender
            );
        }
        
        // Add to new delegate
        delegations[msg.sender] = Delegation({
            delegate: to,
            timestamp: block.timestamp,
            isActive: true
        });
        
        delegators[to].push(msg.sender);
        
        emit DelegationChanged(msg.sender, to);
    }
    
    function getVotingPower(address voter) public view returns (uint256) {
        uint256 power = votingPower[voter];
        
        // Add delegated power recursively
        for (uint256 i = 0; i < delegators[voter].length; i++) {
            address delegator = delegators[voter][i];
            if (delegations[delegator].isActive) {
                power += getVotingPower(delegator);
            }
        }
        
        return power;
    }
}

4. Treasury Management

Programmable Treasury

// Advanced treasury with streaming and vesting
contract ProgrammableTreasury {
    struct Stream {
        address recipient;
        uint256 amountPerSecond;
        uint256 startTime;
        uint256 endTime;
        uint256 withdrawn;
        bool cancellable;
    }
    
    struct Grant {
        address recipient;
        uint256 totalAmount;
        uint256 vestingStart;
        uint256 vestingDuration;
        uint256 cliffDuration;
        uint256 withdrawn;
        bool revocable;
    }
    
    mapping(uint256 => Stream) public streams;
    mapping(uint256 => Grant) public grants;
    uint256 public nextStreamId;
    uint256 public nextGrantId;
    
    modifier onlyGovernance() {
        require(msg.sender == governance, "Not governance");
        _;
    }
    
    function createStream(
        address recipient,
        uint256 totalAmount,
        uint256 duration
    ) external onlyGovernance returns (uint256 streamId) {
        streamId = nextStreamId++;
        
        streams[streamId] = Stream({
            recipient: recipient,
            amountPerSecond: totalAmount / duration,
            startTime: block.timestamp,
            endTime: block.timestamp + duration,
            withdrawn: 0,
            cancellable: true
        });
        
        emit StreamCreated(streamId, recipient, totalAmount, duration);
    }
    
    function withdrawFromStream(uint256 streamId) external {
        Stream storage stream = streams[streamId];
        require(msg.sender == stream.recipient, "Not recipient");
        
        uint256 available = _getAvailableAmount(stream);
        require(available > 0, "Nothing to withdraw");
        
        stream.withdrawn += available;
        
        // Transfer tokens
        token.transfer(stream.recipient, available);
        
        emit StreamWithdrawal(streamId, available);
    }
    
    function _getAvailableAmount(Stream memory stream) 
        private 
        view 
        returns (uint256) 
    {
        if (block.timestamp < stream.startTime) return 0;
        
        uint256 elapsed = block.timestamp >= stream.endTime
            ? stream.endTime - stream.startTime
            : block.timestamp - stream.startTime;
            
        uint256 totalVested = elapsed * stream.amountPerSecond;
        return totalVested - stream.withdrawn;
    }
}

5. Proposal Lifecycle

// Comprehensive proposal system
interface ProposalLifecycle {
  stages: {
    idea: {
      location: "Forum discussion";
      duration: "Open-ended";
      requirements: "None";
    };
    
    draft: {
      location: "GitHub PR";
      duration: "7 days minimum";
      requirements: ["100K LUX support", "Technical specification"];
    };
    
    review: {
      location: "On-chain proposal";
      duration: "3 days";
      requirements: ["Security audit if code", "Economic analysis"];
    };
    
    voting: {
      location: "Multi-chain governance";
      duration: "7 days";
      requirements: ["10% quorum", "60% approval"];
    };
    
    timelock: {
      location: "Timelock contract";
      duration: "48 hours";
      requirements: ["No veto from security council"];
    };
    
    execution: {
      location: "Target chain";
      duration: "Immediate";
      requirements: ["Automated execution"];
    };
  };
}

Recommendations

1. Governance Architecture

recommended_architecture:
  voting_mechanism:
    primary: "Token-weighted with quadratic options"
    delegation: "Liquid democracy"
    privacy: "Optional shielded voting via Z-Chain"
  
  proposal_types:
    protocol_upgrade:
      threshold: "500K LUX"
      quorum: "15%"
      timelock: "7 days"
    
    treasury_allocation:
      threshold: "100K LUX"
      quorum: "10%"
      timelock: "48 hours"
    
    parameter_change:
      threshold: "50K LUX"
      quorum: "5%"
      timelock: "24 hours"
  
  security_measures:
    guardian: "Multi-sig veto for critical issues"
    emergency_pause: "3 of 5 security council"
    upgrade_delay: "Mandatory timelock"

2. Incentive Alignment

  1. Participation Rewards: Reward active governance participants
  2. Delegation Incentives: Share rewards with delegates
  3. Long-term Staking: Higher weight for locked tokens
  4. Reputation System: Track governance participation

3. Tooling Requirements

  1. Governance Dashboard: Unified view across chains
  2. Proposal Builder: Template-based proposal creation
  3. Simulation Tools: Test proposal effects
  4. Analytics Platform: Voting patterns and participation

Implementation Roadmap

Phase 1: Basic Governance (Q1 2025)

  • Deploy governance token contracts
  • Implement basic voting
  • Create proposal system

Phase 2: Advanced Features (Q2 2025)

  • Add delegation system
  • Implement quadratic voting
  • Deploy treasury contracts

Phase 3: Multi-Chain (Q3 2025)

  • Cross-chain proposal execution
  • Unified governance dashboard
  • Advanced treasury management

Open Questions

  1. Vote Buying: How to prevent governance attacks?
  2. Participation: How to encourage broad participation?
  3. Emergency Actions: Balance between speed and decentralization?
  4. Cross-Chain Coordination: How to handle chain-specific issues?

Conclusion

Lux's multi-chain architecture enables innovative governance approaches that balance efficiency with decentralization. The combination of liquid democracy, quadratic voting options, and cross-chain coordination positions Lux to build a robust, inclusive governance system that can evolve with the ecosystem.

References

Copyright and related rights waived via CC0.

Specification

Normative algorithms, types, and constants described herein MUST be followed for interoperability.

Rationale

The design balances clarity, performance, and security trade‑offs appropriate for Lux.

Backwards Compatibility

Additive; does not break existing interfaces. Migration is opt‑in.

Security Considerations

Validate inputs, authenticate where needed, and follow cryptographic best practices to mitigate common threats.

On this page

AbstractMotivationCurrent ImplementationGovernance Components in EcosystemExisting Governance TouchpointsResearch Findings1. Voting MechanismsQuadratic Voting Implementation2. Multi-Chain GovernanceCross-Chain Coordination3. Delegation SystemsLiquid Democracy4. Treasury ManagementProgrammable Treasury5. Proposal LifecycleRecommendations1. Governance Architecture2. Incentive Alignment3. Tooling RequirementsImplementation RoadmapPhase 1: Basic Governance (Q1 2025)Phase 2: Advanced Features (Q2 2025)Phase 3: Multi-Chain (Q3 2025)Related RepositoriesOpen QuestionsConclusionReferencesCopyrightSpecificationRationaleBackwards CompatibilitySecurity Considerations