3.6 Decentralized co-governance structure

LynkCoDAO's decentralized co-governance structure is the core carrier for its realization of "community-led and consensus-driven". It completely abandons the centralized governance model of the traditional DeFi protocol of "minority decision-making, majority execution", and allows every community member to become the maker and guardian of ecological rules through the design of "the whole process chain, zero barriers to participation, and binding of interests and responsibilities". This structure is not a simple "voting tool", but a complete closed-loop system of "proposal-discussion-decision-execution-supervision" to ensure that governance is in line with the spirit of decentralization and has the ability to implement efficiently.

3.6.1 Core Principles: Defining the "Underlying Logic" of Governance

LynkCoDAO's co-governance structure is based on three principles, which prevent governance from becoming a tool of formalism or capital manipulation at its root.

1. “Consensus is power "principle The allocation of governance rights does not depend on "project party endorsement" or "capital size", but on the strength of community consensus - any user holding LNK or USO, as long as they participate in ecological construction (pledge, proposal, vote), can get the corresponding governance weight. For example, users who pledge LNK for a long time (e.g. 360 days) have a higher voting weight than short-term holders, encouraging "deep consensus holders" to dominate decision-making; USO holders have the voice over the governance of the stability mechanism, ensuring that the stablecoin ecosystem is in line with their core interests.

2. "Code is Execution" principle All governance decisions are automatically executed through smart contracts, without any centralized institution or individual intervention. Whether it is "adjusting the pledge reward ratio" or "adding the type of collateral", after the vote is passed, the system will automatically call the corresponding module interface on the chain to complete the parameter update, and the execution results will be publicized in real time and cannot be tampered with, completely eliminating the "proposal passed but not implemented" governance idling.

3. "Transparency is trust" principle The whole process of governance (proposal content, discussion records, voting data, execution results) is stored on the chain, and anyone can query through the block browser or the front-end of the protocol. For example, the addresses of proponents and opponents of a proposal, the amount of positions, and the reasons for voting are all publicly traceable to avoid "black box voting"; every use of state treasury funds (such as repurchasing LNK, replenishing the USO mortgage pool) needs to be associated with the corresponding governance proposal to ensure that the flow of funds is in line with the community consensus.

3.6.2 governance participants: collaborative governance of multiple roles

The governance of LynkCoDAO is not "dominated by a single group", but a "pluralistic co-governance network" composed of different roles (based on the type of token held and the degree of participation), each with exclusive functions and forms checks and balances:

Participating subject	Core governance areas	Governance authority and weight	role positioning
LNK holders	Protocol core rules (consensus anchor price, treasury use, cross-chain extension, etc.)	Basic weight = open position, long-term pledge (> 180 days) plus 20%	The ecological "steering wheel" determines the long-term development direction
USO holders	Stability mechanism (type of collateral, dynamic mortgage rate, liquidation rules, etc.)	Basic weight = open position, plus 10% for stablecoin pledgers.	Ecological "stabilizer" to ensure the safety of value anchoring
community node	Proposal review, dispute mediation, emergency management	Elected by the community (with the support of 1000 + LNK holders), with "proposal filtering rights" (excluding malicious proposals)	Ecological "referee" to improve governance efficiency
technical contributor	Protocol upgrade, security audit, function development	When submitting a technical proposal, you can receive an additional 5% voting weight	Ecological "engineers", translating the will to govern into code

The whole process of 3.6.3 governance: closed loop from "proposal initiation" to "implementation landing"

LynkCoDAO has designed a "four-stage governance process" to ensure that every decision is fully discussed, widely participated in, and rigorously validated, as follows:

1. Proposal initiation stage: the creative entrance with zero threshold

·Any user (regardless of the amount of holdings) can initiate a proposal, which must include four elements: "proposal goal, implementation path, expected impact, and resource requirements" (e.g. "new SOL as USO collateral" needs to explain the liquidity of SOL, risk factor, and value to the stablecoin ecosystem);

·To initiate a proposal, 100 LNK needs to be pledged as a "good faith gold" (to prevent malicious proposals). If the proposal is supported by more than 10% of the voting weight, the good faith gold will be returned; otherwise, it will be confiscated and injected into the state treasury to manage the prize pool.

1. Community Discussion Stage: A Key Link in Consensus Formation

·After the proposal is initiated, it will enter a 7-day publicity period. The community can put forward modification suggestions on the protocol forum or Discord channel, and the proponent can optimize the content based on feedback (up to 2 modifications).

·Community nodes need to complete a "compliance review" within the publicity period, and remove proposals that "violate the core principles of the agreement" (such as proposing that "the project party retains LP control") or "logical vulnerabilities" (such as the reward mechanism may lead to runaway inflation), so as to avoid invalid voting consuming community energy.

1. Voting Decision Stage: Democratic Expression of Multiple Weights

·After the announcement is passed, a three-day voting period will be held, and LNK and USO holders will exercise their voting rights according to the governance area.

§ Core rule proposals (such as adjusting the LNK consensus price): only LNK holders participate, with 50% + voting weight support.

§ Proposals for a stabilization mechanism (e.g., amending the USO clearing threshold): Only USO holders participate, with 50% + voting weight required.

§ Cross-disciplinary major proposals (such as launching cross-chain expansion): LNK and USO holders need to vote jointly, with their respective weights accounting for 60% and 40%, and the support rate needs to reach 67% +;

·Voting uses a "double voting system": users can express their preferences for multiple proposals in order to avoid the "tyranny of the majority vote" (such as a single proposal passed by a small number of people with concentrated support, but the interests of the majority are harmed).

1. Implementation and supervision phase: the implementation of code assurance

·After the vote is passed, the smart contract automatically executes the proposal within 24 hours (e.g. calling the reward module to update the Rebase ratio), and the execution result generates an on-chain certificate;

·The community can initiate an "implementation supervision proposal" (more than 100 users need to be jointly named). If it is found that the implementation results do not match the content of the proposal (such as parameter update errors), it can start an "emergency correction process", which will be jointly reviewed and re-executed by the community nodes;

· Publish a "governance white paper" every quarter to review the implementation effect of all proposals in the quarter (such as whether "adjusting the mortgage rate" reduces the liquidation risk), and provide reference for subsequent governance.

3.6.4 hierarchical governance mechanism: flexibly respond to the decision-making needs of different scenarios

In order to balance "governance efficiency" and "decision-making rigor", LynkCoDAO has designed a layered mechanism of "conventional governance - emergency governance - long-term governance", which is suitable for different scenarios:

1. Routine governance: dynamic optimization of daily parameters

·Applicable scenarios: adjust the proportion of pledge rewards, update the risk factor of collateral, and use of small treasury funds (< 5% of the total treasury), etc.;

·Process: Follow the standard process of "Proposal-7-Day Publicity-3-Day Voting", and the threshold for passing is 50% + support rate;

·Features: High frequency but limited impact, encouraging communities to adjust flexibly according to market changes.

1. Emergency governance: rapid response to black swan events

Applicable scenarios: extreme market conditions (LNK single-day decline > 30%), contract vulnerabilities, collateral defaults, and other events that may threaten ecological security;

Process:

§ The "emergency proposal" is jointly initiated by more than 5 community nodes, and the publicity period is shortened to 24 hours and the voting period is shortened to 12 hours;

§ The voting threshold is 75% + support, and at least 30% of active users (who have interacted in the past 7 days) must participate.

§ Initiate a "post-mortem review proposal" within 7 days after implementation to evaluate the rationality of emergency decisions and avoid abuse of power;

Features: sacrificing some process rigor for response speed to ensure that losses can be quickly stopped in times of crisis.

1. Long-term governance: Consensus building for ecological strategies

Applicable scenarios:

cross-chain expansion plan, core mechanism upgrade (such as modifying the dual-currency model), use of large-amount treasury funds (> 20% of the total treasury), etc.

Process:

§ You need to pass a "temperature check" (community intention vote, support rate > 60% to enter the official proposal);

§ The official proposal publicity period is extended to 14 days, and the voting period is extended to 7 days, with a support rate of 67% +.

§ After implementation, a three-month observation period is set, during which similar proposals are prohibited from being launched again to ensure strategic stability.

Features:

The process is rigorous and the cycle is long, ensuring that long-term decisions are in line with the fundamental interests of the ecosystem.

3.6.5 Governance Incentives and Dispute Resolution: Activating Engagement and Resolving Disagreements

1. Governance incentives: making "participation" rewarding

2. • Voting Rewards: Users who participate in voting can share the "Governance Prize Pool" (funded by 50% of the tax on bonus withdrawals) according to their weight, which is distributed every 7 days;

   • Proposal reward: If the passed proposal has a positive impact within 3 months (e.g. reducing the risk of USO de-anchoring), the sponsor can receive a 1000-5000 LNK reward issued by the state treasury.

   • Node Incentive: Community nodes can receive 0.5% of the state treasury's LNK reward every quarter (evenly distributed by the number of nodes), but they need to pass the "community confidence vote" (if the support rate is less than 50%, they will be removed).

3. Dispute Resolution Mechanism: Let "Disagreements" Exit

4. • The Arbitration Board is composed of 9 community members (3 LNK holders, 3 USO holders, 3 technical contributors), who are responsible for mediating governance disputes (e.g. whether the proposal meets the core principles).

   • Second Vote: If the first vote approval rate is close (e.g. 49% vs 51%), a second vote can be initiated (extending the discussion period by 3 days), allowing users to re-express their position.

   • On-chain public mediation: The arbitration result needs to be publicized on the chain for 3 days. If the community opposition rate is > 30%, a "referendum" will be initiated (all users can participate, 1 vote and 1 right) to ensure that the final decision is in line with the will of the majority.

3.6.6 the core value of decentralized co-governance

The essence of LynkCoDAO's decentralized co-governance structure is to transform "community will" into "ecological rules" through technical means. Its core values are reflected in:

• Anti-manipulation: No individual or institution can monopolize the governance power, and the whole process of proposal, voting, and execution can be checked on the chain, eliminating capital manipulation.

• Adaptability: The hierarchical governance mechanism can handle both daily optimization and emergency crises, as well as build long-term strategic consensus and adapt to complex market environments.

• Sustainability: Governance and incentives are deeply bound, and users change from "passively accepting rules" to "actively formulating rules and making profits", forming an ecological positive cycle of "co-construction and sharing".

The ultimate goal of this structure is to make LynkCoDAO a "living protocol" - its rules are not defined by anyone, but dynamically evolved by community consensus; its fate is not determined by any event, but by the global membership.