Governance

The governance system for Providence II PROV is a critical core element of Providence governance.

Description of Voting Rights

Voting rights are given to holders of PROV, ensuring that those with capital within our ecosystem have direct influence on its governance and subsequent future direction. Each token represents one vote. PROV token holders will be able to vote on a variety of proposals such as protocol upgrades, future available markets, future implementations, governance changes, budget allocations, and more.

Proposals made within the voting process will be subject to a minimum quorum and x>50% majority requirements to be considered valid, ensuring that decisions are representative of the broader community’s consensus.

Eligibility

Any user globally regardless of IP address will be able to participate in governance and the protocol at large. To be eligible to vote on proposals and participate in Providence governance, the holder must own a minimum threshold of PROV. This threshold will be set to ensure high standards of participation and prevent governance attacks. To protect against manipulation and encourage thoughtful participation, Providence will implement a locking mechanism for tokens used for voting and proposals. Should minimum requirements be met, PROV holders will have the ability to submit proposals for consideration by the community and vote on governance proposals submitted by other users.

Future governance details on information such as the proposal process, types of proposals, implementation of decisions, transparency and reporting procedures, and seucity measures will be made public over time.

Governance Transition Roadmap

Providence will transition to a DAO. However, this will be implemented incrementally to ensure factors such as protocol stability and security. The governance transition will occur over three stages.

1) Alpha

Stage Alpha will establish foundational voting mechanisms to engage token holders in decision-making processes:

• Token Utility - PROV holders can vote on key issues including protocol upgrades and treasury management. Increased threshold for voting rights and proposals.

• Features - Introduction of basic governance tools, such as proposal submissions and voting on predetermined categories.

• Governance Control - The core team will vet proposals before they are put to a community vote and will have the ability to veto proposals which do not match the required direction for growth.

2) Beta

Stage beta will greatly increase Providence decentralisation, reducing core team control:

• Expansion - Expansion of governance to include more detailed governance actions such as specific parameter tuning, community-elected council members, and direct influence over portions of the treasury.

• Features - Implementation of a more complex governance framework, including multiple layers of voting. Introduction of delegation mechanisms, where token holders can delegate their voting rights to trusted representatives.

• Governance Control - Introduction of a governance council elected by PROV holders, responsible for overseeing certain decisions and acting as a liaison between the community and the core team.

3) Charlie - Full DAO Transition

All operational and financial decisions are made through community governance without central oversight:

• Features - Advanced governance features such as algorithmic governance models, automated treasury management, and real-time voting systems. Implementation of smart contracts that enable self-executing governance decisions based on predefined rules and community inputs.

• Governance Control - Complete removal of any centralised controls. Continuous refinement of governance processes based on DAO performance, security audits, and community feedback.