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Overview

Governance

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DAO

The Prism DAO governs the protocol's economic parameters, specifically Limit Order Mining (LOM) incentives, protocol fee switches, and treasury allocations. It operates as a decentralized system where $PRSM token holders vote directly on-chain to determine the protocol's strategic direction.

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Governance Scope

The DAO is responsible for high-level economic decisions rather than day-to-day management. Its mandate explicitly includes:

  • Limit Order Mining (LOM): The DAO retains the power to amend the LOM reward structure, including adjusting the total epoch budget, changing emission schedules, or modifying the eligibility criteria for incentivized markets.

  • Tokenomics: Any significant changes to $PRSM tokenomics proposed by Prism Labs Team—such as vesting schedule alterations, must be ratified by a DAO vote.

  • Treasury Management: The DAO actively governs the protocol's financial assets. This includes activating or adjusting protocol fees and determining the allocation of revenue towards $PRSM buybacks.

  • Ecosystem Grants: Approving funding for CEX listings, community tools, and marketing initiatives.

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Voting Mechanics

Governance utilizes a token-weighted voting model. A user's voting power is calculated automatically at the time of the vote by summing their liquid balance and the value of their staked assets.

Voting Power=PRSM Balance+(xPRSM×Conversion Rate)\text{Voting Power} = \text{PRSM Balance} + (x\text{PRSM} \times \text{Conversion Rate})

  • PRSM Balance: The number of governance tokens held in the user's wallet.

  • xPRSM: The number of liquid staking tokens held by the user.

  • Conversion Rate: The current exchange rate at which xPRSM can be converted back to PRSM.

Note: All votes are cast via the Hedera Consensus Service (HCS), ensuring every vote is immutable, verifiable, and recorded on-chain.

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Proposal Categories & Timelines

The governance process is split into two distinct tracks to balance speed with security.

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1. Limit Order Mining Rewards

Designed for speed. This process allows the protocol to rapidly incentivize new markets or adjust weights for live events.

  • Duration: 24 Hours

  • Scope: Limit Order Mining rewards adjustments.

  • Process: Immediate On-Chain Vote -> Execution.

  • Requirements: 1M voting power for enactment

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2. Core Proposals (Standard)

Designed for security and deliberation. This track is used for all non-LOM decisions, such as Treasury spends, Fee Switch toggles, or Protocol Upgrades.

  • Scope: Treasury, Ecosystem, Tokenomics, Upgrades.

  • Total Duration: 4 Days

Phase 1: The Signal (Discussion)

  • Duration: 1 Day

  • Venue: Governance Forum

  • Details: Proposals begin as a "Request for Comment" (RFC) to gather community feedback. This phase filters out low-quality proposals before they move to a formal vote.

Phase 2: The Proposal (Temperature Check)

  • Duration: 1 Day

  • Venue: Prism Interface (On-Chain)

  • Details: Proposals that garner support are submitted formally. To prevent spam, the proposer must meet a minimum Voting Power threshold. This stage acts as a "temperature check" to confirm broad backing.

  • Requirements: 500k voting power for Phase 3

Phase 3: The Election (Binding Vote)

  • Duration: 2 Days

  • Venue: Prism Interface (On-Chain)

  • Details: The final binding vote. If an Election meets Quorum (minimum participation) and receives a Majority (>50%), it is ratified.

  • Requirements: 1.5M voting power for enactment

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