4. Governance Model

4.1 - Voting Rights

vePACT holders can vote on protocol decisions, such as:

• Approving or amending protocol upgrades

• Adjusting fee structures or staking requirements

• Managing the protocol treasury

• Introducing governance mechanisms

• Adjusting borrower and community incentive structures

Each vePACT token represents one vote, and proposals are passed by simple majority consensus, with a minimum quorum of 25% of vePACT.

4.2 - Proposal Process

The governance process involves:

• Proposal Submission: vePACT holders can submit proposals as long as they meet the minimum lockup expiry (lock up period is longer than the execution of the proposal + 7 days).

• Discussion and Voting: Once a proposal is live, vePACT holders (who must meet the minimum lockup expiry) have a specified period to cast votes. This will be split into two sections: 

  • 1. Proposal discussion (5 days): during this time no votes can be cast, but discussion can be held.

  • 2. Voting (7 days): votes can be cast. 

• Implementation: Most approved proposals should be self-executing; others will be implemented according to the protocol’s roadmap. There will be a buffer after the vote outcome is published before implementation. 

4.3 - Initial committees 

The foundation will propose a number of initial committees to manage specific ecosystem functions, controlled by a multisig contract composed of the committee members. The initial committees will include: 

• PACT Guardians (Emergency Committee): to safeguard funds within PACT in the event of a smart contract or oracle exploit, including the powers to temporarily block or freeze specific addresses or transaction types, including oracle feeds

• PACT Compliance Committee: to maintain a whitelist/blacklist of KYC’ed business addresses and roles for compliance purposes

• PACT Grants Committee #01: to manage an initial PACT grant portfolio focused on onboarding strategic capital provider partners, who must also be whitelisted by the Compliance Committee