Hello everyone, today I want to discuss how the governance system of the LISTA DeFi protocol operates. As a decentralized protocol, LISTA hands decision-making power over to the community, which is a common goal promoted by many projects. But how does it actually work in practice? Let’s take a look.

LISTA holders can obtain governance voting rights by staking tokens. Simply put, the more LISTA you stake, the greater your influence within the protocol. This mechanism gives the token a real utility beyond just being a trading asset.

In terms of scope of authority, LISTA holders can participate in a wide range of decisions. Core parameters such as the protocol’s borrowing interest rates, collateralization ratios, and liquidation penalties can be adjusted through voting. Additionally, adding new collateral assets, upgrading smart contracts, deciding how the ecosystem fund is spent, and establishing community incentive programs all require community votes. In other words, major decisions are generally made with community approval.

The entire governance process is as follows: first, any LISTA holder can submit a governance proposal, but a proposal fee must be paid (a common anti-spam measure). After submission, the community has 7 days for discussion, during which members can give feedback and suggest improvements. Once the discussion period ends, a 7-day voting period begins, during which token holders can support or oppose the proposal. If the proposal passes after voting, the protocol automatically executes it.

Voting weight is an interesting aspect. It’s not simply one token equals one vote; instead, it’s calculated based on the amount of LISTA staked and the staking duration. The formula is: Voting weight = staked LISTA amount × staking time coefficient. The time coefficient adjusts according to the lock-up period—longer lock-ups result in a higher coefficient, thus greater weight. This design aims to encourage long-term holding rather than short-term voting.

Finally, participation in governance voting also comes with rewards. This is an incentive mechanism to motivate community involvement, encouraging more people to care about the protocol’s development rather than passively holding tokens. Overall, LISTA’s governance framework aligns with some mature DeFi projects, ensuring decision-making decentralization while using time locks and rewards to mitigate short-term volatility.