Governance Framework

9.1Governance as a Native Ledger Object

Governance is not implemented as an external application or a smart contract bolted onto the protocol — it is one of the sixteen native ledger object types described in Section 7.4, enforced by the same consensus rules as every other transaction. A vote cast from a participant's own staking object uses the owned-object fast path described in Section 6.4, confirming in roughly 8–10 milliseconds with no need to wait for full network-wide consensus, since a vote object owned exclusively by one participant cannot conflict with anyone else's claim.

9.2Voting Power and Delegation

Voting weight is tied to staked PYM, the protocol's fixed-supply governance token described in Section 7. Because PYM's supply is capped permanently at 100 million from genesis, governance weight cannot be diluted by future issuance the way it could be on a token whose supply expands over time. A staking object also carries a reputation component — the same honesty score referenced in Section 8.4 — meaning a participant's practical influence reflects both their staked capital and their track record of honest participation, not capital alone.

9.3Proposal Flow

A governance action moves through a structured sequence: a proposal is submitted as a governance object referencing the specific parameter or protocol change under consideration; it is then opened for a voting period during which staked PYM holders cast votes weighted as described above; if the proposal reaches the required quorum and passes, it proceeds to execution, which — for protocol parameters governed by the monetary system in Section 7 — is also subject to the same persistence and bounding logic described there, since governance cannot override the hard-coded bounds on the calibration formula or the circuit breaker without a full protocol upgrade.

9.4Safeguards Against Capture

Three structural features work together to resist governance capture by a small, concentrated group of token holders.

First, PYM's fixed supply means no governing body can dilute existing holders' voting weight by minting new tokens.

Second, the hard bounds described in Section 7.1 and 7.2 — the calibration formula's fixed range, the circuit breaker's mandatory persistence gates and recovery conditions — sit outside the reach of ordinary governance votes; changing them requires a full protocol upgrade with the same scrutiny as any other consensus-level change, not a simple majority vote.

Third, the reputation-weighting component described in Section 9.2 means that capital alone is not sufficient for outsized influence — a participant must also have a sustained record of honest behaviour on the network.

9.5Treasury and Stability Reserve Oversight

The Stability Reserve described in Section 7.6 is not discretionary spending controlled by any individual or small group. Its deployment — reserve-funded buybacks during Transition and Critical states — follows the automatic, formula-driven logic described in Section 7.8, capped at a fixed percentage of the reserve per hour specifically to prevent any single actor, including a governance majority, from rapidly depleting it. The reserve cannot be redirected to cover operational costs under any governance vote; its use is structurally restricted to monetary stability defence.