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English version/governance.md
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# Governance and Voting Mechanism
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**Last updated:** 2025-01-27
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**Version:** 1.0
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---
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## Governance Token Distribution
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### Ownership Structure
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- **Founder:** 70% of tokens (2,100,000 tokens)
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- **Investors (LP):** up to 30% of tokens (900,000 tokens)
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- **Total tokens:** 3,000,000
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### Model Feature
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- LP investors receive governance tokens → effectively become GPs with voting rights
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- Investors (30%) have real governance rights, not just dividend rights
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---
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## Quorum and Voting Mechanism
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### Quorum for Decision-Making
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- **Initial quorum:** 51% of all governance tokens
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- **Dynamic change:** Quorum is determined by token holders through voting
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- **Protection against single control:** Quorum can be increased from 51% to 70% to exclude the risk of single control of the treasury
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### How the Quorum Mechanism Works
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1. Token holders can propose quorum changes through the voting system
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2. Changing the quorum requires voting with the current quorum (51% or higher)
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3. Quorum can be increased to 70%, meaning the founder (70%) cannot make decisions unilaterally
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4. This protects investor interests (30%) and prevents abuse of control
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### Technical Implementation
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- On-chain voting through smart contracts
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- Transparent vote counting system
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- Each token = one vote
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- Voting results are recorded in the blockchain and available for verification
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---
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## On-Chain Voting Procedure
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### Who Can Create Proposals
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- All governance token holders (founder and investors)
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- Ability to create proposals for voting
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### Voting Process
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1. **Proposal creation:** Any token holder can create a proposal
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2. **Discussion period:** Proposal is put up for discussion
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3. **Voting:** Token holders vote for or against the proposal
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4. **Vote counting:** Votes are counted proportionally to the number of tokens
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5. **Decision-making:** Decision is made if ≥ quorum voted for it (51% or higher, depending on current value)
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### Types of Decisions Requiring Voting
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- Quorum changes (51% → 70% or vice versa)
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- Fund strategic decisions
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- Changes to profit distribution rules (15% / 15% / 70%)
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- Large investments in portfolio companies
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- Governance structure changes
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- Other critical decisions affecting the fund
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---
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## Balance of Founder (70%) and Investor (30%) Rights
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### Founder Rights (70%)
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- Strategic leadership and fund development
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- Technical support and platform development
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- Participation in voting with 70% weight
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- Creating proposals for voting
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### Investor Rights (30%)
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- Participation in voting with up to 30% weight (depending on ownership share)
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- Creating proposals for voting
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- Ability to block decisions if quorum is increased to 70%
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- Information rights (access to reports, financial data)
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- Access to accelerator projects by selected business activity types
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- Co-investment opportunities in deals
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### Minority Protection Mechanisms (30%)
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1. **Increasing quorum to 70%:** Investors can vote to increase the quorum, preventing unilateral decision-making by the founder
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2. **Right to create proposals:** Investors can initiate voting on important issues
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3. **Information rights:** Transparent access to financial reports and fund metrics
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4. **Transparency:** All decisions are recorded in the blockchain and available for verification
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### Can the Founder (70%) Make Decisions Unilaterally?
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- **With 51% quorum:** Founder can make decisions unilaterally, as 70% > 51%
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- **With 70% quorum:** Founder cannot make decisions unilaterally, investor consent is required
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- Investors can vote to increase the quorum to 70% to protect their interests
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---
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## Information and Reporting Rights
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### Investor Information Rights
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- Access to fund financial reports
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- Information about portfolio companies and their development
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- Metrics and analytics by selected business activity types
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- Transparent governance system through blockchain
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### Reporting Frequency
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- Regular reports on treasury receipts
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- Information on profit distribution (dividends, expenses, investments)
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- Portfolio company reports
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- Transparency of all transactions through blockchain
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---
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## Voting Mechanism Usage Examples
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### Example 1: Increasing Quorum to 70%
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- Investors create a proposal to increase quorum from 51% to 70%
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- Voting takes place with current quorum of 51%
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- If the proposal is approved, quorum increases to 70%
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- Now the founder (70%) cannot make decisions unilaterally
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### Example 2: Strategic Decision
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- Founder or investors create a proposal for a large investment
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- Voting takes place with 51% quorum (or 70% if increased)
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- Decision is made if ≥ quorum voted for it
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### Example 3: Changing Profit Distribution Rules
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- Proposal to change distribution (e.g., 20% / 15% / 65%)
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- Voting with 51% or higher quorum is required
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- Decision is made by majority vote
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---
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## Additional Materials
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- **Investment proposal:** [for-investors.md](for-investors.md)
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- **Business model:** [business-model.md](business-model.md)
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- **Glossary of terms:** [GLOSSARY.md](GLOSSARY.md)
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---
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**Last updated:** 2025-01-27
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**Version:** 1.0
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