Proposal System

How governance proposals are created, voted on, and executed

The Dualis governance proposal system allows DUAL token holders to submit, debate, and enact changes to the protocol. Every modification to protocol parameters, pool configuration, treasury allocation, or contract upgrades must pass through this formal governance process. Proposals follow a structured lifecycle and are subject to type-specific quorum, voting period, and timelock requirements.

Proposal Threshold

To create a governance proposal, an account must hold at least 100 DUAL tokens at the time of submission. This threshold prevents spam while keeping proposal creation accessible to a broad set of participants. The threshold applies to the proposer's own balance and includes any delegated voting power.

Threshold Requirement

The proposal creation threshold is 100 DUAL. This is a governance-configurable parameter that can itself be changed through a PARAMETER_CHANGE proposal.

DIP Numbering System

Every proposal receives a sequential Dualis Improvement Proposal (DIP) number upon submission. The numbering follows a simple sequential pattern: DIP-001, DIP-002, DIP-003, and so on. DIP numbers are assigned on-chain and are immutable once created.

DIP Format

DIP-001: Adjust USDC Reserve Factor to 12%
DIP-002: Add wSTETH as Collateral Asset
DIP-003: Treasury Grant for Security Audit
DIP-004: Emergency Pause on T-BILL Pool

Each DIP includes the proposal type, a human-readable title, a detailed description of the change and its rationale, and the on-chain actions to be executed if the proposal passes.

Proposal Lifecycle

Every proposal progresses through a well-defined lifecycle with five stages. Each stage serves as a checkpoint that ensures sufficient community review before changes take effect.

Stage	Description
Draft	The proposer prepares the proposal content, specifies the type, and attaches any on-chain actions. Draft proposals are not yet visible to voters.
Active	The proposal is submitted on-chain and voting begins. A snapshot of all DUAL balances is taken at the block the proposal becomes active.
Succeeded / Defeated	When the voting period ends, the proposal is marked as Succeeded if it meets both the quorum threshold and a simple majority of For votes. Otherwise it is Defeated.
Queued	Succeeded proposals enter the timelock queue. The timelock delay varies by proposal type. During this period, the community can review the pending execution.
Executed	After the timelock expires, the proposal can be executed within the 7-day execution window. If not executed within this window, the proposal expires.

Expiration

If a succeeded proposal is not executed within the 7-day execution window after its timelock expires, it becomes permanently expired and must be resubmitted as a new DIP.

Proposal Types

Dualis supports six distinct proposal types, each with tailored governance parameters. Higher-impact changes require larger quorums and longer timelocks, while emergency actions are designed for rapid response with minimal delay.

Type	Quorum	Voting Period	Timelock
PARAMETER_CHANGE	10%	5 days	48 hours
NEW_POOL	15%	5 days	48 hours
POOL_DEPRECATION	20%	5 days	48 hours
TREASURY_SPEND	25%	5 days	72 hours
EMERGENCY_ACTION	5%	1 day	0 hours
PROTOCOL_UPGRADE	20%	7 days	96 hours

Parameter Change

PARAMETER_CHANGE proposals modify configurable protocol values such as reserve factors, interest rate model parameters, collateral factors, and liquidation incentives. These are the most common proposal type and require a 10% quorum with a 5-day voting period.

New Pool Creation

NEW_POOL proposals add a new lending market to the protocol. They specify the asset, initial risk parameters, oracle configuration, and supply caps. A 15% quorum ensures adequate community review before new markets are launched.

Emergency Action

EMERGENCY_ACTION proposals are reserved for critical situations such as oracle failures, exploit mitigation, or market circuit-breaker activation. They carry the lowest quorum requirement (5%), a 1-day voting period, and zero timelock, allowing immediate execution upon passage. Despite the expedited process, emergency proposals still require a majority vote and are subject to the admin veto mechanism.

Zero Timelock

Emergency proposals execute immediately upon passage with no timelock delay. This capability is intentionally limited to protocol safety operations and cannot be used for parameter changes or treasury actions.

Proposal Cancellation

A proposal can be cancelled by its original proposer at any time before execution. If the proposer's DUAL balance drops below the 100 DUAL threshold during the voting period, any community member can trigger cancellation. This mechanism ensures that proposers maintain sufficient stake throughout the governance process.