# Governance
# Decentralized Autonomous Organization (DAO)
C4E is designed to become a digital collaborative space that is owned, controlled, operated, maintained and updated by a community of its users and builders.
Like many other ecosystems at the very beginning, our project may be susceptible to the actions of people or institutions who, consciously or unconsciously, may harm the ecosystem. Therefore, in the first stage of the network's operation, we will be able to use the potential of the Strategic Reserve pool to support governance decisions for the project.
The Strategic Reserve will affect voting power only at the beginning of the project and gradually decrease by selling tokens to future panthers during expansion to new markets.
DAO 1.0 - on-chain governance
After the project starts we will utilize the native gov module of Cosmos SDK. The gov module enables Chain4Energy blockchain to support an on-chain governance system and utilize all supporting tools like wallets, explorers. Holders of the native staking token of the chain can vote on proposals on a 1 staked token 1 vote basis.
DAO 2.0 - Governance Booster and Green Houses
The governance model that is provided with the SDK does not provide incentive and reward mechanisms for active DAO participants. We would like the community, users and stakeholders to actively influence the development of our project. This is our ultimate goal and the primary focus.
Therefore, we would like to design a mechanism that will be more adapted to the specifics of the Chain4Energy project and the energy market.
# Governance Booster
The blockchain will inventivice additionally advent participants of governance and long term stakers through a lock mechanism similar to veCurve Model. The longer and more active participant the higher incentive received. The reward will come from the distribution mechanism. Up to 33% of the usage incentive for transaction fees and inflation will be allocated to the governance booster. For details see Fee distribution mechanism.
We are inspired by the work of Curve finance and MahaDAO who introduced a locking mechanism for governance allowance and boosting rewards for stakers. Apparently we realized that the same mechanism was adopted by other protocols like: Cream finance.
How the mechanism can be adopted to Chain4energy case:
We are Introducing veC4E, converting staked C4E token into a locked asset with governance properties. veC4E stands for voting escrow C4E. They are your C4E locked for voting. The longer you lock your C4E for, the more voting power you have (and the bigger boost you can reach). You can lock 1,000 C4E for a year to have a 250 veC4E weight. Each C4E locked for four years is equal to 1 veC4E.
Why Introduce veC4E?
- Allocate and boost voting power to long-term holders of C4E through veC4E.
- Allow veC4E holders to boost staking rewards.
- Improve security of the network by guaranteeing long-term staking and lockup of C4E tokens.
- All ecosystem benefits which we can design in the future
Users may lock up their C4E for up to 4 years for 1-1 ratio of veC4E (e.g. 1000 C4E locked for 4 years returns 1000 veC4E). veC4E is not a transferable token nor does it trade on liquid markets. It is more akin to an account based point system that signifies the vesting duration of the wallet's locked C4E tokens within the protocol.
##Green Houses community DAO
Green Houses is an innovative concept that allows local communities to connect in microDAOs. These are communities grouped under: collective prosumer, micro grids, VPP, sustainable community energy systems - SCES etc. Green Houses will allow you to manage and make joint decisions, manage treasury, set the distribution of profits for revenues, etc.
Each Green House will be able to individually determine what will depend on the strength of the vote. Will it be the production capacity, the size of the energy storage, the number of C4E tokens blocked in the Governance module, or some combination of these factors.