Protocol & Chain Governance
The Inter Protocol exists on the Agoric chain and includes multiple levels of governance. The first is composed of stakers of Agoric's BLD token, who make chain-level votes about large upgrades to Inter Protocol. The other governing entity is the Economic Committee, which is elected by the BLDer DAO to make informed operational decisions around the Inter Protocol.
Stakers of Agoric's BLD token ("The BLDer DAO") perform governance on the Inter Protocol by making proposals and voting on them at the chain level.
These proposals have the capability to cause the chain to execute code at the JavaScript level. The BLDer DAO has two primary roles in governance of the Inter Protocol:
- 1.Elects (and replaces) the Economic Committee, which makes day to day operational decisions for the protocol
- 2.Agrees upon and/or signals approval for major changes to the protocol such as new collateral onboarding or contract upgrades
BLDer DAO proposals operate at the Cosmos level and may be voted on by validators in the active set and any BLD staker through their Cosmos level wallet (e.g., Keplr).
The Economic Committee is an elected body which has specific, well-defined parameter-level control over contracts within the Inter Protocol. The first Economic Committee was elected on 16th September 2022 from this on-chain vote.
For the initial PSM-first launch of IST, the Economic Committee has two primary controls over the system 1) changing PSM parameters and 2) contract offer pausing. Each control is specific to a given Parity Stability Module contract instantiation, meaning that individual changes can be made per asset-bridge pair accepted (e.g., minting limit for USDC.axl may be changed independently from minting limit for USDC.grav).
The Econ Committee also maintains an emergency power to pause contract functions if necessary. This could be required in the case of a significant asset or bridge failure, or an ongoing exploit.
The Inter Protocol’s day to day governance is led by an elected group of representatives (the “Economic Committee” or “EC”) who take action on behalf of the BLD holders (BLDer DAO). The EC has direct control of contract parameters and also retains the ability to pause contract functions as a disaster response.
The following parameters in the PSM are controllable by the EC:
- 1.GiveMintedFee - fee on trades where user wishes to trade IST for stablecoin held by the PSM. Expressed as a percentage: (0.03 = 0.03%)
- 2.WantMintedFee - fee on trades where user wishes to trade anchor (external stablecoin) in exchange for newly minted IST
- 3.MintLimit - refers to the max amount of IST, net of burns, that can be minted by this contract
As a possible disaster response, PSM contracts are built with the ability to pause specific offer functions while leaving other functions running normally. Pausing contract offer functions should only be undertaken in response to extreme events and not be part of normal operations.
The PSM is a simple contract and contains only two functions:
- 1.wantMinted - user buys newly minted IST with an anchor stablecoin Pausing this function means that the contract will stop accepting the anchor stablecoin in exchange for new IST
- 2.giveMinted - user buys an anchor stablecoin using IST Pausing this function means that the contract will stop accepting IST in exchange for anchor stablecoins held by the PSM