Governance

Overview

Based Agents implements two distinct layers of governance:

1. Protocol Governance: Initially controlled by Community Multisig, transitioning to Genesis Agent governance

2. Agent Governance: Each Agent token provides governance over its specific Agent

1. Protocol Governance ($BAG)

Structure

Protocol governance follows a progressive path toward full decentralization:

1. Initial Phase: Community Multisig

   • A trusted group of community members controls protocol operations

   • Handles token grants and community rewards

   • Manages token burns and emissions

   • Controls protocol parameter updates

   • May implement token holder voting for key decisions

2. Transition Phase: Genesis Agent

   • The Genesis Agent is the first and most important Agent on the platform

   • Will gradually assume control of protocol governance from the Community Multisig

   • Controlled by $BAG token holders through governance

   • Powers transferred progressively as Genesis Agent proves stability

   • Represents the ultimate form of dogfooding - an AI Agent governing an AI Agent protocol

3. Vote Delegation

   • $BAG implements ERC20Votes for efficient governance

   • Token holders can delegate voting power to active community members

   • Delegates vote on behalf of their delegators

   • Reduces governance overhead for passive holders

   • Enables more active and engaged governance

Governance Powers

The protocol-level governance (initially Multisig, later Genesis Agent) can:

• Vote on protocol upgrades and parameters

• Control framework integrations

• Manage protocol fees and revenue

• Guide protocol development and roadmap

• Propose and vote on protocol improvements

Voting Parameters

• Voting Period: 7 days

• Quorum: 20% of total $BAG supply

• Threshold: >66% of votes in favor

• Delay Period: 48 hours

Proposal Types

1. Protocol Upgrades

   • Smart contract upgrades

   • Security parameter changes

   • Framework integrations

2. Economic Parameters

   • Fee structures

   • Revenue distribution

   • Market mechanisms

3. Strategic Decisions

   • Roadmap priorities

   • Framework partnerships

   • Major feature releases

4. Genesis Agent Control

   • Approval of power transfers from Multisig to Genesis Agent

   • Genesis Agent parameter updates

   • Genesis Agent strategic decisions

2. Agent Governance

Overview

Each Agent token launched as an AICO (AI Coin Offering) provides governance rights over its specific Agent through a flexible system that can evolve from centralized to decentralized control.

Contract Structure

The Agent governance system consists of three main contracts:

1. AICOGovernor:

   • Handles standard governance operations

   • Manages proposals and voting

   • Controls critical system changes

   • Higher thresholds for fundamental changes

2. VetoContract:

   • Enables token holder veto rights

   • Manages veto voting process

   • Lower thresholds for operational vetoes

   • Quick response to concerning actions

3. DelayModule:

   • Enforces delay periods

   • Checks veto status

   • Ensures time for community review

   • Prevents rushed changes

Director Role

The Director—owner of the Agent's governance contracts and Wallet—has operational control:

1. Initial Control

   • Exclusive proposal rights at deployment

   • Control over governance parameters

   • VetoContract Director role

   • Protocol parameter management

   • Control over Agent's code repository visibility

   • Control over fund release logic

2. Configuration Capabilities

   • Update protocol parameters

   • Set governance contract

   • Update protocol addresses

   • Configure proposal rights

   • Update governance parameters

   • Define fund release mechanisms

Token Holder Rights

1. Standard Veto Actions

   • Voting Period: 72 hours

   • Quorum: 10% of total token supply

   • Threshold: >50% of votes in favor

   • Delay Period: 24 hours

   • Use Case: Regular operational decisions

2. Critical Changes

   • Voting Period: 7 days

   • Quorum: 20% of total token supply

   • Threshold: >66% of votes in favor

   • Delay Period: 48 hours

   • Use Case: Director transfers, fundamental changes

Progressive Decentralization

The governance system supports evolution through:

1. Proposal Rights

   • Can be opened to all token holders

   • Can implement minimum balance requirements

   • Can be granted to specific addresses

2. Voting Parameters

   • Adjustable voting delay

   • Configurable voting period

   • Modifiable proposal threshold

   • Adjustable quorum requirements

3. Role Transfers

   • Director role can transfer to:

     • Multi-sig wallet

     • DAO

     • Other governance mechanism

   • Governance contract can be upgraded

Implementation Mechanisms

1. Parameter Updates

   • updateGovernanceParameters: Modify voting settings

   • updateProposalRights: Change proposal access

   • setProposerRights: Manage individual rights

2. Contract Upgrades

   • UUPS upgradeable pattern

   • Can implement new governance models

   • Can add custom voting strategies

Governance Risks

Potential Gridlock Scenarios

1. Quorum Failures

   • Large token holder inactivity could prevent reaching quorum

   • Particularly risky for critical changes requiring 20% quorum

   • Can block necessary upgrades or improvements

   • Mitigation: Active community engagement and delegation

2. Competing Interests

   • Director proposing changes vs token holders vetoing

   • Could lead to operational paralysis

   • May prevent timely responses to opportunities/threats

   • Mitigation: Clear communication and compromise

3. Time-Critical Situations

   • Mandatory delay periods could block urgent actions

   • 24-48 hour delays might miss market opportunities

   • No bypass mechanism for emergencies

   • Mitigation: Proper planning and preventive measures

4. Token Distribution Impact

   • Concentrated token holdings could control vetoes

   • Fragmented holdings might struggle to reach quorum

   • Whale influence on critical decisions

   • Mitigation: Balanced token distribution and anti-whale measures