Governance

Understanding Governance on Terra Classic

Terra Classic’s governance empowers the community to shape the blockchain’s future.

By staking LUNC, you not only earn rewards but also gain the right to vote on key network decisions.
Here’s how governance works and how you can get involved.

What is Governance on Terra Classic?

Governance on Terra Classic is a decentralized process where LUNC holders participate in shaping the direction of the blockchain. Whether it’s upgrading the protocol, adjusting parameters, or allocating funds from the community pool, governance proposals are submitted and voted on by the community.

Democratic System: Any LUNC holder can submit a proposal or vote, allowing for collective decision-making.
Proposals: These are written requests for changes to the network, including upgrades, changes in staking rewards, or funding for community projects.

The Role of Staking in Governance

By staking your LUNC, you gain not only staking rewards but also governance rights. Each LUNC staked equals one vote in governance. The more LUNC you stake, the greater your voting power.

Validators and Delegators

Validators have direct voting power, while delegators can influence decisions by selecting which validator to stake with, aligning with those whose values match their own.

Delegated Voting

If you delegate your LUNC to a validator, they vote on your behalf. However, you still have the power to override the validator’s vote if desired.

How Proposals Work

Governance proposals are divided into several categories, such as technical upgrades, parameter changes, or community funding.

Here’s how it works:

Submitting a Proposal: Any LUNC holder can submit a proposal by paying a deposit in LUNC. This deposit discourages spam and is refunded if the proposal passes.
Voting: Once a proposal is submitted, there is a voting period during which LUNC holders cast their votes.

Options include:
1. Yes: Support the proposal.
2. No: Oppose the proposal.
3. No with Veto: Strong opposition, typically for malicious proposals.
4. Abstain: Neutral vote, neither supporting nor opposing.

Voting Thresholds and Quorum

For a proposal to pass, certain conditions must be met:

Quorum: At least 40% of the total staked LUNC must participate in the vote.
Threshold: A proposal typically requires more than 50% of the votes to be “Yes” for it to pass.
Veto Power: If more than 33.4% of voters choose “No with Veto,” the proposal is rejected, and the proposer’s deposit is burned.

Why Governance Matters

Governance is essential to maintaining the decentralized nature of Terra Classic.

It gives the community the power to:

Propose Network Upgrades: Ensure the network stays competitive and secure.
Fund Community Projects: Allocate resources from the community pool to projects that benefit the ecosystem.
Maintain Economic Stability: Proposals can adjust important network parameters like staking rewards and transaction fees.

How to Get Involved in Terra Classic Governance

To participate in governance, follow these steps:

Stake Your LUNC

Begin by staking your LUNC through Terra Station or a compatible wallet to unlock your governance rights.

Review Active Proposals

Navigate to the governance section in Terra Station to view ongoing proposals. Read through them to understand the potential impact on the network.

Cast Your Vote

Once you’ve reviewed the proposals, cast your vote based on your position. You can vote “Yes,” “No,” “No with Veto,” or “Abstain.”

Submit Proposals

If you have an idea for improving Terra Classic, you can submit a proposal yourself. Ensure that it’s well-thought-out, as it will need community support to pass.

Types of Proposals in Terra Classic Governance

Terra Classic supports various types of governance proposals, each with distinct purposes and use cases:

Note: Each proposal type is designed for a different aspect of network governance, ensuring both community input and technical flexibility.

Text Proposal

A general proposal used for non-technical changes, community suggestions, or ideas. It often serves as a way to gauge sentiment before more concrete actions.

Community Pool Spend

Proposals requesting funds from the community pool, typically for development, marketing, or ecosystem initiatives. Requires clear justification and allocation plans.

Parameter Change

Used to adjust on-chain parameters like staking rewards or gas fees. This directly impacts how the network operates.

Execute Contract

Proposals that execute smart contracts on-chain, used primarily for specific technical upgrades or deploying new functionality.

The Pay Per Job (PPJ) Process for L1 Development on Terra Classic

For a development team completing L1 development on Terra Classic under the Pay Per Job (PPJ) process, here’s the full workflow:

Step 1 - KYC Verification

One team member must complete KYC with Certik or SolidProof company.

Step 2 - Commonwealth Proposal

Submit a proposal for 7 days of community discussion on CommonWealth.im in Governance and Proposals section for Luna Classic Community.

Step 3 - Text Proposal for Plan and Pricing

After feedback, submit a text proposal for community approval on the development plan and pricing.

Step 4 - Development & GitHub Submission

Once approved, begin development. Upon completion, the code must be made available on GitHub for community review before Testnet deployment.

Step 5 - Testnet Proposal

Submit a proposal for Testnet deployment after code verification.

Step 6 - Mainnet Deployment Proposal

Following successful Testnet testing, submit a proposal for Mainnet deployment.

Step 7 - Payment Request

Once live on Mainnet, submit a Community Pool Spend proposal for payment.

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