Governance

AFHE governance puts protocol control in the hands of committed token holders through the veAFHE (vote-escrowed AFHE) model. This ensures long-term alignment between governance participants and protocol success.

veAFHE: Vote-Escrowed Governance

veAFHE follows the proven ve-token model pioneered by Curve Finance:

Lock AFHE → Receive veAFHE → Vote on proposals

Lock Duration & Voting Power

Lock Period	veAFHE Multiplier
1 week	0.02x
1 month	0.08x
6 months	0.5x
1 year	1x
2 years	2x
4 years	4x

Example: 1,000 AFHE locked for 4 years = 4,000 veAFHE voting power

Decay Mechanism

veAFHE decays linearly toward unlock:

• Lock 1,000 AFHE for 4 years → 4,000 veAFHEAfter 2 years → 2,000 veAFHEAfter 3 years → 1,000 veAFHEAt unlock → 0 veAFHE

This ensures only committed holders maintain voting power.

Governance Scope

veAFHE holders vote on:

Protocol Parameters

• Fee structures

• Reward distributions

• Security parameters

• Network upgrades

Treasury Allocation

• Ecosystem grants

• Partnership funding

• Development bounties

• Liquidity incentives

Strategic Decisions

• New feature prioritization

• Integration partnerships

• Research directions

• Emergency responses

Proposal Process

1. Discussion Phase (7 days)

• Forum discussion

• Community feedback

• Proposal refinement

2. Snapshot Vote (5 days)

• Off-chain voting via SnapshotQuorum: 4% of veAFHE supply

• Threshold: >50% approval

3. Timelock (48 hours)

• Successful proposals enter timelock

• Emergency council can veto malicious proposals

• Execution after timelock expires

Governance Security

Emergency Council

• 5/9 multisig for emergencies only

• Can pause protocol (24 hour limit)

• Can veto clearly malicious proposals

• Cannot initiate proposals

Governance Minimization

The long-term goal is reducing governance surface area:

• Immutable core contracts where possible

• Algorithmic parameter adjustment

• Gradual decentralization of admin keys

Incentive Alignment

veAFHE holders receive:

• Protocol fees: Share of computation fees

• Boosted rewards: Up to 2.5x mining rewards

• Governance power: Direct protocol direction

• Early access: Priority for new features

This creates strong incentives for long-term commitment over short-term speculation.