The only constant of our world is that everything dynamically changes. It is not possible to know everything that will happen in the future, so it is impossible for you to set up all the rules, trading pairs, and all your possible investors right at the start. That means that you need a mechanism to change your fund parameters and give you more flexibility.
To solve this problem, we have developed a voting mechanism, that allows making changes in your fund, but since you're not the only party participating in the fund and it is needed to make it fair and balance the interests of investors too. You're not able to change all parameters as you like and on the go, so you need to align these changes with investors, so they do not find themselves in a situation where they signed one term sheet and join the fund when there were certain rules and then everything changes and new rules are applied. The consensus mechanism or "Voting rules" is the protocol for making changes in the fund.
Unlike previous versions of voting mechanisms and platforms like Snapshot, where users vote and still, the executor is needed to execute the voting results, our voting mechanism has no intermediaries, so that means that if something was voted and accepted, it will be executed automatically.
We're creating an asset management fund, which is a "for-profit" type of organization, so meritocracy is applied. On each deposit, users get LP tokens of the fund. The amount of these tokens represent a share of ownership of the investor in a fund. The more investors deposited - the more voting power he has.
In this step, you need to specify Voting Rules and decision-making mechanisms for your fund. To put it simply: how the decisions are being made in your fund. There are 4 parameters of "Voting rules":
- 1.Quorum (%): Here is the definition from the Oxford Dictionary: the minimum number of members of an assembly or society that must be present at any of its meetings to make the proceedings of that meeting valid. To simplify: What share of LP tokens of your Vault must vote for a proposal to be considered valid or significant. In other words: if the proposal does not meet the quorum, then it will not be executed.
- 2.Minimum approval (%): What share of LP tokens needs to vote positively to accept the proposal for execution.
- 3.Voting Duration (Hours): How long does the voting takes place.
- 4.Minimum share of LP tokens to start Voting (%): How much LP tokens does an investor need to have to make a proposal.
Here you can find a table with a description of roles and responsibilities for your fund or to put it simply: who can create what proposals.