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Governance

Governance in Stabolut is designed to ensure that strategic decisions are made by participants who are genuinely aligned with the long-term stability of the ecosystem. Voting power is derived from veSBL, meaning only users who have staked SBL and demonstrated sustained commitment can shape the protocol’s direction. This protects against short-term manipulation and ensures governance reflects the interests of long-term stakeholders.

Governance oversees key areas of the protocol, including Treasury parameters, Insurance Fund allocation tiers, risk management frameworks, liquidity strategy, and upgrades to core mechanisms. To maintain structure and accountability, the governance process follows a defined lifecycle from proposal creation to execution.

1. Proposal Creation​

Governance proposals can be initiated by:

  • veSBL holders above a minimum threshold
  • The core team (during early phases, optional)
  • Approved delegates or working groups

Every proposal must follow a standardized format including:

  • Title & Summary
  • Motivation and background
  • Proposed changes (parameters, mechanisms, allocations, etc.)
  • Expected impact on safety, revenue, liquidity, or stability
  • Implementation details and required actions

A minimum stake of veSBL is required to submit proposals, preventing spam and low-quality submissions. Proposals that do not meet formatting or safety criteria can be rejected during the review stage.

2. Review & Validation Stage​

Once created, proposals enter a mandatory review period, allowing for:

  • Community discussion
  • Risk analysis
  • Treasury and Insurance Fund modelling
  • Feedback from subject-matter working groups
  • Optional revisions by the proposer

The objective is to filter out unsafe, ambiguous, or poorly specified changes before they reach a vote. Only proposals that pass review are moved to the voting stage.

3. Voting​

Voting power is determined by the holder’s veSBL balance, ensuring alignment between influence and long-term commitment.

Key traits of the voting system:

  • Each veSBL = one vote
  • Voting is open for a fixed period (a governance epoch)
  • Users may vote For, Against, or Abstain
  • Quorum requirements ensure meaningful participation
  • Certain high-risk proposals may require a higher supermajority threshold

Votes are recorded transparently on-chain or within a verifiable governance module depending on implementation. If quorum is met and the final tally meets the approval threshold, the proposal moves to execution.

4. Execution​

Once approved, proposals are sent to the Governance Executor — a controlled smart-contract module (or multisig during early phases) that enacts the changes.

Execution may include:

  • Adjusting Treasury allocation percentages
  • Modifying buyback parameters
  • Updating Insurance Fund tier thresholds
  • Changing liquidity provisioning logic
  • Deploying new strategies or modules
  • Adjusting staking or emission parameters

All changes are executed automatically or through a secure review process depending on protocol maturity.

5. Cooldown & Implementation Delay​

To enhance security and protect against rushed or malicious governance changes, approved proposals enter a cooldown period before execution.

The cooldown serves two purposes:

  • Risk Mitigation: allows time for the community and contributors to validate safety, identify unintended consequences, or halt dangerous proposals if needed.
  • Predictability: gives integrators, users, and liquidity providers time to prepare for parameter updates or systemic changes.

Cooldown duration varies depending on the proposal type, with critical economic parameters requiring longer delays than routine updates.