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Governance

Decentralized and Community-Driven Decision-Making

Governance and Voting in Concentric Finance

Concentric Finance operates under the ethos of decentralized decision-making, wherein the protocol's direction is shaped not just by the core development team, but also by the protocol's stakeholders. It accomplishes this through a well-structured governance system that facilitates voting, where decisions around the protocol are made collectively by the community.

Voting Mechanism

The Concentric Finance protocol utilizes the $xCONE token as a governance token. This token represents a claim on governance and is staked in the protocol to receive voting rights.

Voting for Pools

xCONE token holders have the power to direct emissions to their preferred pool. This mechanism allows stakeholders to influence the allocation of $CONE tokens produced by the protocol's yield farming activities. Token holders can thereby shape the evolution of the Concentric ecosystem by directing more rewards towards specific liquidity pools, effectively voting with their stakes on the preferred allocation.

Single Pool Voting

To ensure fair distribution of voting power, each wallet can cast its vote for only one pool at a time. This restriction enables a balanced representation of interests and discourages monopolistic control over token emissions.

Automatic Vote Updating

The Concentric Finance protocol automatically updates votes whenever a token holder stakes or unstakes their $xCONE tokens. This feature ensures that the voting power of $xCONE holders accurately reflects their current holdings and stake in the protocol, maintaining up-to-date governance decisions.

Partnered Protocol Influence

Concentric Finance encourages collaborations and partnerships by granting partnered protocols an opportunity to boost their voting power. Protocols can augment their influence through treasury swaps or Over-The-Counter (OTC) purchases, which would increase their $xCONE holdings. Consequently, partner protocols holding substantial $xCONE can use their enhanced influence to steer emissions towards their preferred pool, fostering mutual growth and development within the ecosystem.

Encouraging Voting for Certain Pools

While the power to vote for any pool lies with the $xCONE holders, Concentric Finance encourages votes for specific pools that are strategically important for the health and stability of the $CONE ecosystem. However, the protocol respects the principle of decentralization, and the final decision invariably rests with the community of token holders.

Protocol Bribes for Priority in Liquidity Provision

In addition to the voting mechanisms, Concentric Finance introduces an innovative concept of 'protocol bribes'. Partner protocols can offer additional rewards or 'bribes' to incentivize $xCONE holders to vote in their favor, ensuring a higher priority for their pools in the liquidity provision queue. These protocol bribes create an additional layer of yield generation for the $xCONE holders while ensuring a fair, market-driven allocation of liquidity across the various partnered protocols.
In essence, the governance system of Concentric Finance is designed to foster active community participation and decentralization. It allows stakeholders to steer the protocol's direction, encourages partnerships and collaborations with other protocols, and introduces innovative mechanisms for yield generation and liquidity management. This democratic model of governance is vital in ensuring the long-term resilience and success of the Concentric Finance protocol in the rapidly evolving DeFi landscape.