> For the complete documentation index, see [llms.txt](https://docs.derivadex.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.derivadex.io/governance/ethereum.md).

# DerivaDAO Governance

## Introduction to the DerivaDAO

The DerivaDEX protocol is governed by the DerivaDAO. DAO is shorthand for “decentralized autonomous organization”, a concept often used in decentralized applications to refer to smart-contract based governance, where token holders are able to make proposals regarding changes to a protocol, and vote on them. 

### Governance structure

#### The DAO and voting power

All DDX token holders participate in governance, with voting power proportional to their token holdings. 

Governance decisions include:

* Approving protocol updates
* Managing DAO-owned funds
* Appointing Bond Providers and Foundation directors

#### Types of proposals

1. **On-chain Proposals**: Direct changes to protocol code or smart contracts.
2. **Hybrid Proposals**: Combine on-chain changes with off-chain activities.
3. **Off-chain Proposals**: Non-binding, ratified by the DAO.

#### Proposal process

1. **Draft Creation**: Shared on the [Governance Forum](http://forum.derivadex.com).
2. **Security Council Review**: Assesses potential risks.
3. **DIP Submission**: Created and submitted on the [DIPs Repository](https://gitlab.com/derivadex/dips).
4. **Voting**: Open for 3 days; 4% quorum needed.
5. **Execution**: If approved, the proposal is implemented on-chain.

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