Governance of StaikaFi Protocol

STAIKA Token

The governance of the StaikaFi Protocol is facilitated through the Staika Governance Token (STAIKA), granting holders the power to vote on protocol changes. STAIKA holders can propose and vote on modifications, ensuring democratic decision-making. Changes approved by the voters won’t take effect immediately, safeguarding the system against potentially harmful proposals.

The Global Staika Council (GSC)

The GSC serves as the central governing body, responsible for voting on improvement proposals, parameter changes, and implementing community proposals known as Staika Improvement Proposals (SIPs). The GSC conducts risk analysis, economic forecasts, and proposes key economic adjustments through Staika Configuration Change Proposals (SCCPs).

The GSC governs nine main pillars:

1. Borrowing rate premium for each collateral type (reflective of TradFi interest rates).

2. Borrowing cap for each collateral type.

3. Collateral ratios.

4. Staika Protocol fees and the reserve pool contribution (% of Revenues).

5. Voting caps for liquidity and borrowing gauges.

6. Treasury management.

7. Allocation of revenues collected from Borrowing Rates to the SUSD Redistribution Rate (SRR) and SUSD liquidity providers.

8. The ability to pause borrowing & liquidations in case of a Black Swan Event.

9. Add a Liquidity Gauge and/or introduce a new collateral type with a Borrowing Gauge (The approval of the following is contingent upon completing a three-day discussion period in the governance forum).

Staika Improvement Proposals (SIPs)

StaikaFi Protocol employs the use of SIPs as a critical mechanism for proposing and implementing changes within the protocol. Any member of the StaikaFi community can submit an SIP, providing detailed information on the motivation, technical specifications, and rationale behind the proposed idea. The SIPs follow a concise three-step process: It begins with a focused forum discussion lasting for a specified 3-day period. Subsequently, the proposal undergoes streamlined submission to the GSC. Once the GSC evaluates and approves the proposal, it moves forward for community-wide voting. The vote result will be valid if at least 20% of all veSTAIKA voters participated in the vote (quorum).

The GSC plays a vital role in the SIP process by conducting interviews with the proposal authors, engaging in debates on the potential implications of the SIPs, and ultimately deciding whether the proposal should be subject to vote. This comprehensive approach ensures that proposals are thoroughly evaluated and that the community has an active role in shaping the future of the protocol.

Staika Configuration Change Proposals (SCCPs)

SCCPs serve as artifacts that propose changes to existing parameters within the StaikaFi Protocol. They follow a similar authoring and review process as the SIP (Staika Improvement Proposal) but specifically focus on modifying system parameters. These proposals often reference a deployed SIP within the StaikaFi Protocol.

When submitting an SCCP, the proposal should include the following parameters for consideration, taking into account the technical similarities between StaikaFi and MakerDAO:

1. Stability Fee: The proposed changes to the stability fee, which determines the interest rate borrowers pay on their loans denominated in SUSD stablecoin.

2. Liquidation Ratio: Any proposed adjustments to the liquidation ratio, which dictates the collateral-to-debt ratio required to trigger the liquidation of a borrower’s collateral.

3. Auction Parameters: Proposed changes to the parameters governing the auction mechanism used to liquidate collateral in case of under-collateralization or default.

4. Debt Ceiling: Adjustments to the maximum amount of debt (in SUSD) that can be generated within the protocol.

5. Collateral Types: The inclusion or removal of specific collateral types within the system, potentially expanding the range of assets accepted as collateral for SUSD loans.

6. Oracle System: Proposals regarding improvements or changes to the oracle system used to determine the prices of collateral assets and maintain accurate pricing information.

7. Governance Parameters: Modifications to the parameters related to the governance framework itself, such as voting mechanisms, voting weights, or decision-making processes.

8. Integration with External Protocols: Proposals for integrating with external protocols or platforms to enhance functionalities, increase liquidity, or improve yield opportunities within the StaikaFi ecosystem.

It is important for the SCCP to provide a clear rationale and analysis supporting the proposed parameter changes. Additionally, the proposal should outline the potential impact of the modifications on system stability, risk management, and the overall functioning of the StaikaFi Protocol.