# Governance

Governance in Aroon

Governance is a crucial aspect of the Aroon network, enabling on-chain decision-making where token holders have the power to propose changes and vote on them.

Aroon supports on-chain proposals for various actions, including creating markets and assets, modifying network parameters, and transferring assets between certain network-managed accounts. Additionally, Aroon accommodates freeform proposals for community suggestions not requiring on-chain execution.

Participating in governance, either by voting or proposing new ideas or changes with community backing, is a significant way for token holders and community members to enhance the network and add value for all participants.

### **Voting on Proposals**&#x20;

Proposals in Aroon become actionable only if they secure sufficient votes from AROON token holders. There's no cap on the number of active proposals on which a token holder can vote.

To vote, your tokens must be linked to an Aroon public key. The tokens don't need to be nominated to validators but should be associated with the voting key.

Voting is possible as soon as a proposal is validated and active, and remains open until the proposal's deadline.

The influence of your vote is determined by the number of tokens linked to your voting key. For proposals impacting market parameters, the market share of liquidity providers is also considered.

Each Aroon public key with tokens can cast a vote, with the entire token balance linked to that key influencing the vote. To ensure your vote counts, you must hold the tokens at both the time of voting and when votes are tallied.

Tokens used for voting are neither locked nor transferred. They can be allocated for validator nomination or voting on other proposals.

During the voting period, you can change your vote, but only the latest submission counts when the voting closes.

### **Calculating Proposal Outcomes**&#x20;

The network assesses all valid votes' weight as a percentage of the maximum possible weight to determine if minimum participation requirements are met.

The weight of 'for' votes is also compared as a percentage of all votes to determine if the proposal achieves the required majority.

If both minimums are met, the proposal is enacted. If either is not, the proposal fails.

**Specifics for Market Update Proposals**&#x20;

Market update proposals have additional criteria. Liquidity providers can vote based on their equity-like share without token holder participation. However, if token holders vote and meet participation and majority requirements, their decision can supersede that of the liquidity providers.

The network also calculates:

* LP participation rate: The combined equity-like share of voting LPs.
* LP 'for' rate: The proportion of 'for' votes among LPs relative to their participation rate.

The proposal passes if:

1. Tokenholder votes meet the required participation and majority, overriding the liquidity providers.
2. Tokenholder votes don't meet the threshold, but LP votes do, with enough 'for' votes. Both LP participation and 'for' rates must exceed the required minimums.

**Outcome for Successor Market Proposals**&#x20;

The status of successor market proposals can change post-approval.

A successor market cannot launch if its parent market is still proposed, even with a successful vote.

Two proposals with the same parent can pass. The first market to clear its opening auction claims the insurance pool share, and LP equity-like shares are transferred to it. The second market will then be rejected.
