Overview
Onyx Governance is controlled by the Onyx DAO through decentralized smart contracts and voted by XCN Stakers.
Last updated
Onyx Governance is controlled by the Onyx DAO through decentralized smart contracts and voted by XCN Stakers.
Last updated
The Onyx Protocol operates under a decentralized governance framework, enabling XCN token holders to participate in protocol decision-making and upgrades. Governance is facilitated through four core smart contract components.
The Onyx Governance module is available on Onyx dApp. This module is exclusively controlled by XCN stakers on Ethereum. This section of the documentation hub goes over the entire Governance functions.
Please note: XCN on other networks cannot control Onyx Governance at this time.
XCN Token – The governance token used for voting power and protocol participation.
Staking Module – A mechanism that allows users to stake XCN, granting them voting weight proportional to their staked balance.
Governance Module (Governor) – The primary contract responsible for processing governance proposals and vote execution.
Timelock Contract – A security mechanism ensuring that approved proposals are subject to a mandatory delay before execution, allowing the community to react if necessary.
Together, these components enable a decentralized governance model where protocol modifications, parameter adjustments, and new asset integrations can be proposed, voted on, and executed through administrative functions within oToken contracts or the Comptroller contract.
Proposal Eligibility: To submit a governance proposal, an address must hold a minimum of 100,000,000 XCN in voting weight. Proposals consist of executable smart contract code, defining precise changes to the protocol, such as modifying interest rate models, listing new collateral assets, or adjusting risk parameters.
Voting and Approval: Once a proposal is submitted, a three-day (3-day) voting period is initiated. During this window, XCN holders can vote either for or against the proposal. A proposal is deemed successful if it receives:
A majority vote in favor.
A minimum of 200,000,000 XCN votes supporting it. Upon approval, the proposal is queued in the Timelock contract and becomes executable after a mandatory two-day (2-day) delay. This delay period allows the community to review the proposed changes before they are enacted on-chain.
To obtain voting rights, users must stake XCN tokens. The amount of XCN staked determines the voting weight of an address. Governance power is dynamically adjusted based on staking activity:
Increasing stake grants additional voting weight.
Withdrawing XCN from staking automatically reduces voting power.
This staking mechanism ensures that governance influence is directly proportional to active participation in securing and supporting the protocol.
This governance structure ensures that protocol decisions remain community-driven and subject to transparent, on-chain governance mechanisms.
The Guardian Wallet within Onyx Governance serves as a critical safeguard against malicious proposals, ensuring that even if a proposal achieves the necessary vote weight through hostile or manipulative means, it can be canceled before execution. This wallet is controlled by a trusted security council or smart contract logic designed to detect governance attacks, preventing unauthorized or harmful protocol changes. The Guardian has the authority to nullify proposals that violate security policies, such as those attempting to transfer funds improperly, alter fundamental contract logic, or introduce vulnerabilities into the system. By integrating this failsafe mechanism, Onyx Governance maintains a robust security posture while still enabling decentralized decision-making.
The Guardian Wallet operates by continuously monitoring governance proposals and tracking vote behavior to identify anomalies, including vote concentration from potentially compromised accounts. If a proposal is flagged as malicious or harmful, the Guardian can intervene before the proposal progresses to execution within the Timelock contract. This feature ensures that the governance process remains resilient against coordinated attacks or governance takeovers. Additionally, the Guardian Wallet can be enhanced through onchain automation, further reducing the risk of unilateral actions while maintaining the integrity and trustworthiness of the Onyx Protocol's decentralized governance framework.
