How Governance Works on Fantom
Governance on a decentralized platform empowers token holders to actively shape and influence its future, ensuring it evolves in the right direction. On Fantom, governance is an on-chain process that lets FTM stakers submit and vote on proposals that determine changes to the platform’s mechanics and tokenomics.
How does voting work?
To vote on a proposal, simply go to the governance section in your Fantom fWallet, open an active proposal, and cast your vote on the choice with which you agree most. Note that you’ll need to stake FTM tokens in order to vote. Each staked token equals one vote.
When you delegate your stake to a validator, your voting power is still equal to the number of FTM tokens you’ve staked. However, if you choose not to vote on a proposal, your voting power is given to your validator who adds your votes to their own. This helps to increase overall participation and prevent low voting turnouts. Once you do vote, they lose your voting power.
As an example, let’s consider a validator that has 1M FTM staked, which includes 800K of their own tokens and 200K tokens delegated to them by others. Until the delegators vote, their staked tokens go towards increasing the validator’s voting power.
If the validator votes for option A with all 1M tokens, and then their delegators vote for option B with their 200K delegated tokens, the final result is 800K votes for option A and 200K votes for option B.
If the validator removes their votes later, only their own 800K are removed, and the delegators’ votes remain unchanged. If none of the delegators have voted yet, the validator removes all 1M votes.
How do proposals work?
Governance proposals outline potential actions that aim to improve Fantom. If you’ve staked FTM, you can submit one by paying a 100 FTM fee through the governance section of your Fantom fWallet.
Proposals aren’t restricted to a simple yes or no option — voters can express their level of agreement across a range of custom options, which allows for more nuanced decision-making.
For example, the proposal below aims to reduce the FTM burn rate and redirect the freed tokens to high-quality dApps in order to support and encourage the growth of the developer community on Fantom. Voters can choose the degree with which they agree, or disagree, using a percentage slider.
Proposals have a set date by which a minimum number of voters must have participated, and they must have agreed above a certain percentage. In the proposal above, at least 55% of FTM stakers must cast their vote, and the average agreement among them must also be 55% or higher for it to pass, both of which need to be achieved by March 1, 2023.
If a proposal passes, the Fantom Foundation will implement the proposed changes or upgrades. In our upcoming governance model, you’ll have the ability to submit self-executing proposals that can modify certain parameters of the network once they pass, such as changing staking rewards or modifying FTM burn rates.
Get involved in governance
Governance on Fantom is a decentralized process that relies on the participation of the community. It’s important for token stakers to stay informed about ongoing proposals and cast their votes in order to shape the direction of the platform.
Feel free to join the Fantom Discord or any of our other community platforms to be in the loop!