Governance

$LIFI as a Governance Token

$LIFI will evolve into the governance token for the Liquid platform. Token holders will be able to propose and vote on important decisions, including:

• Protocol Parameters: Adjustments to key variables like fee percentages, staking reward rates, and partnerships with KYC providers.

• Jurisdiction and Asset Type Expansion: Proposals to add support for new regions or asset classes, ensuring legal, compliance, and risk factors are community-vetted.

• Treasury Allocation: Deciding how Liquid’s treasury — accumulated from platform fees (in $LIFI or other currencies) — should be used. Options could include funding development, token buybacks, liquidity incentives, or grants for ecosystem growth.

• Oversight and Validation: As LiquidChain launches, governance might also elect oversight committees or validate new node operators.

To prevent governance attacks, voting power may favor significant $LIFI stakers or long-term holders, possibly through mechanisms like time-weighted voting or veLIFI (vote-escrowed LIFI) models.

In any case, community governance is critical to ensuring the decentralized future of Liquid, giving active participants and investors a real voice in the platform’s evolution.