Governance in Davos Protocol
DGT — the Heart of Governance: Davos Protocol operates under the auspices of the Davos Governance Token (DGT). This token grants holders the right to participate in pivotal decisions, such as proposing and voting on protocol adjustments. While DGT provides the platform for change, these alterations don't immediately come into effect post-vote, offering a layer of protection against sudden or potentially detrimental changes.
The Global Davos Council (GDC): Comprising of co-founders and advisors, the GDC plays a paramount role as the central governing entity. This council, capped at seven members, ensures the protocol's progression by voting on Davos Improvement Proposals (DIPs) and Davos Configuration Change Proposals (DCCPs). Members of the GDC bring expertise to the table, making critical decisions about risk analysis, economic shifts, and key protocol adjustments. Notably, some GDC seats will be up for community elections in future iterations, amplifying the spirit of decentralized governance.
Davos Improvement Proposals (DIPs): DIPs stand as the cornerstone of protocol enhancement, granting every community member the right to propose changes. A DIP submission should elucidate the motivation, technicalities, and logic behind the suggested modification. These proposals undergo a rigorous yet succinct process:
- A focused forum discussion spanning three days.
- Submission to the GDC for evaluation.
- Upon GDC approval, the DIP is presented for community voting, requiring a 20% veDGT voter turnout for validation.
Davos Configuration Change Proposals (DCCPs): DCCPs, akin to DIPs, follow a structured authoring and evaluation mechanism. However, DCCPs primarily deal with amending existing system parameters. They often reference deployed DIPs on the Davos Protocol, embodying iterative refinements to the protocol's mechanics.
The Significance of veDGT: For an added layer of governance precision, Davos introduces the concept of veDGT, derived from DGT tokens locked in liquidity pools. Holders of veDGT have a pivotal role in key decisions, especially in designating borrowing incentives and orchestrating revenue redistribution strategies across lending, liquidity provisions, and the DSR. This innovative approach ensures that the core decisions rest with active, invested community members.