How governance works

The chain's parameters are not owned by anyone. They are changed by proposals that pass a vote and then sit in a timelock before they take effect. There are four steps, and the timelock between the vote and the execution is what makes the outcome predictable.

What a parameter change actually does

The dials governance turns are the economics and the rules of the chain, not the code. Changing one changes what the chain does from the next block onwards, for everybody, without anyone upgrading anything.

Take the burn. Every transaction on the chain pays a fee, and a fixed share of that fee is destroyed rather than paid out. That share is the burnRatio parameter. Suppose it stands at 10% and the community thinks L2P is being issued faster than it is being removed. One proposal, one number, and from the moment it executes every single transaction on the chain destroys a quarter of its fee instead of a tenth. Nobody had to agree to it individually, no contract was redeployed, and the validators who now earn less had one vote each on it like everyone else.

That is the shape of every parameter change. A few more:

• Raising minSelfDelegationL2P forces anyone who wants to run a validator to put more of their own money at risk, which makes the set smaller and the operators in it more careful.
• Shortening unbondPeriod gets your coins back faster after you undelegate, and makes it that much easier for a validator's backers to walk away before a punishment lands on them.
• Raising quorumNumerator means more of the supply has to turn out for any vote to count, which protects against a handful of holders deciding things and, set too high, means nothing passes at all.

Every one of them is a trade. That is why the description matters as much as the number: the vote is on the trade, not on the parameter.

What governance can change lists every dial the chain exposes and what each one does.

1. Propose

Anyone above the proposal threshold can submit a proposal. A proposal is either a parameter change, which is executable, or a signal proposal, which records what the community wants without changing anything by itself.

2. Vote

Voting opens after the voting delay and stays open for the voting period. Your weight is the govL2P behind your address at the snapshot block, so coins bought after the proposal opened do not vote.

govL2P is what the governor counts, and you hold it automatically for every L2P you have staked. It is minted when you delegate and burned when you undelegate, it cannot be sent to anyone, and it exists for no purpose other than this. Coins sitting unstaked in a wallet carry no weight at all.

You can vote for, against, or abstain. Abstaining is not the same as not voting: it counts towards quorum without taking a side.

A proposal passes when it clears quorum and the for votes beat the against votes.

3. Queue

A proposal that passed is queued into the timelock. It cannot execute yet. The delay is deliberate: it gives everyone who disagrees time to react, exit or organise before the change lands.

The governor only accepts targets that are whitelisted. A proposal that calls anything else can pass its vote and still never execute, which is by design.

4. Execute

Once the timelock expires, anyone can execute the proposal. Not just the proposer, and not an admin: execution is permissionless, so a passed proposal cannot be quietly dropped.

Governance starts locked

The governor accepts nothing at all until 35,000,000 govL2P exists, which is five fully staked validators. Until that point no proposal can be submitted, which keeps a small amount of stake from steering the chain in its first weeks.

It opens on its own the moment the threshold is passed. Nobody has to unlock it and nobody can unlock it early.

Where to do this

Everything above happens at governance.l2protocol.com. You can read every proposal, tally and timelock without a wallet. You need a wallet only to vote, propose, queue or execute.

Read Write a proposal for what you can actually change.