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Docs/English version/governance.md

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Governance and Voting Mechanism

Last updated: 2025-01-27
Version: 1.0

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Governance Token Distribution

Ownership Structure

  • Founder: 70% of tokens (2,100,000 tokens)
  • Investors (LP): up to 30% of tokens (900,000 tokens)
  • Total tokens: 3,000,000

Model Feature

  • LP investors receive governance tokens → effectively become GPs with voting rights
  • Investors (30%) have real governance rights, not just dividend rights

Quorum and Voting Mechanism

Quorum for Decision-Making

  • Initial quorum: 51% of all governance tokens
  • Dynamic change: Quorum is determined by token holders through voting
  • Protection against single control: Quorum can be increased from 51% to 70% to exclude the risk of single control of the treasury

How the Quorum Mechanism Works

  1. Token holders can propose quorum changes through the voting system
  2. Changing the quorum requires voting with the current quorum (51% or higher)
  3. Quorum can be increased to 70%, meaning the founder (70%) cannot make decisions unilaterally
  4. This protects investor interests (30%) and prevents abuse of control

Technical Implementation

  • On-chain voting through smart contracts
  • Transparent vote counting system
  • Each token = one vote
  • Voting results are recorded in the blockchain and available for verification

On-Chain Voting Procedure

Who Can Create Proposals

  • All governance token holders (founder and investors)
  • Ability to create proposals for voting

Voting Process

  1. Proposal creation: Any token holder can create a proposal
  2. Discussion period: Proposal is put up for discussion
  3. Voting: Token holders vote for or against the proposal
  4. Vote counting: Votes are counted proportionally to the number of tokens
  5. Decision-making: Decision is made if ≥ quorum voted for it (51% or higher, depending on current value)

Types of Decisions Requiring Voting

  • Quorum changes (51% → 70% or vice versa)
  • Fund strategic decisions
  • Changes to profit distribution rules (15% / 15% / 70%)
  • Large investments in portfolio companies
  • Governance structure changes
  • Other critical decisions affecting the fund

Balance of Founder (70%) and Investor (30%) Rights

Founder Rights (70%)

  • Strategic leadership and fund development
  • Technical support and platform development
  • Participation in voting with 70% weight
  • Creating proposals for voting

Investor Rights (30%)

  • Participation in voting with up to 30% weight (depending on ownership share)
  • Creating proposals for voting
  • Ability to block decisions if quorum is increased to 70%
  • Information rights (access to reports, financial data)
  • Access to accelerator projects by selected business activity types
  • Co-investment opportunities in deals

Minority Protection Mechanisms (30%)

  1. Increasing quorum to 70%: Investors can vote to increase the quorum, preventing unilateral decision-making by the founder
  2. Right to create proposals: Investors can initiate voting on important issues
  3. Information rights: Transparent access to financial reports and fund metrics
  4. Transparency: All decisions are recorded in the blockchain and available for verification

Can the Founder (70%) Make Decisions Unilaterally?

  • With 51% quorum: Founder can make decisions unilaterally, as 70% > 51%
  • With 70% quorum: Founder cannot make decisions unilaterally, investor consent is required
  • Investors can vote to increase the quorum to 70% to protect their interests

Information and Reporting Rights

Investor Information Rights

  • Access to fund financial reports
  • Information about portfolio companies and their development
  • Metrics and analytics by selected business activity types
  • Transparent governance system through blockchain

Reporting Frequency

  • Regular reports on treasury receipts
  • Information on profit distribution (dividends, expenses, investments)
  • Portfolio company reports
  • Transparency of all transactions through blockchain

Voting Mechanism Usage Examples

Example 1: Increasing Quorum to 70%

  • Investors create a proposal to increase quorum from 51% to 70%
  • Voting takes place with current quorum of 51%
  • If the proposal is approved, quorum increases to 70%
  • Now the founder (70%) cannot make decisions unilaterally

Example 2: Strategic Decision

  • Founder or investors create a proposal for a large investment
  • Voting takes place with 51% quorum (or 70% if increased)
  • Decision is made if ≥ quorum voted for it

Example 3: Changing Profit Distribution Rules

  • Proposal to change distribution (e.g., 20% / 15% / 65%)
  • Voting with 51% or higher quorum is required
  • Decision is made by majority vote

Additional Materials

Last updated: 2025-01-27
Version: 1.0

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