> For the complete documentation index, see [llms.txt](https://paragon-protocol.gitbook.io/paragon-protocol/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://paragon-protocol.gitbook.io/paragon-protocol/governance-and-tokens/overview.md).

# Overview

Paragon is designed to be community-owned and execution-driven.

Governance evolves in two stages:

* **Phase A (Current):** User Points DAO
* **Phase B (Next):** veXPGN on-chain governance

### TL;DR

* anyone can propose (subject to thresholds)
* Points provide early governance participation
* veXPGN enables full on-chain control
* all execution is enforced via timelock

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### Governance Philosophy

Paragon governance is built around:

* participation over speculation
* usage over passive holding
* transparent execution

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👉 Protocol influence is tied to real usage and contribution.

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### Phase A — User Points DAO

Paragon Points provide governance participation before token-based governance is live.

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#### What Points Are

* non-transferable
* wallet-bound
* earned through activity
* time-decaying (seasonal)

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👉 Points are not a token and have no market value.

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#### How You Earn Points

Points are earned through protocol usage:

* swapping (Flow usage may receive higher weighting)
* providing liquidity
* farming participation
* governance participation
* ecosystem contributions

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👉 Points reward active participation, not passive capital.

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#### Delegation

* Points can be delegated
* delegates may represent groups or communities
* delegation is reversible at any time

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### Proposal System

#### Step 1 — Proposal

* users above threshold can propose
* proposals submitted off-chain (e.g. Snapshot)

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#### Step 2 — Voting

* voting power based on Points
* quorum and majority required

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#### Step 3 — Execution

* multisig executes approved proposals
* enforced through timelock

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👉 Policy:

The multisig follows approved votes except in defined security scenarios.

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#### Safeguards

* timelock delay (≥ 48h)
* emergency guardian (limited scope)
* public execution logs
* full transparency

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### Phase B — veXPGN (On-Chain Governance)

Paragon transitions to fully on-chain governance using veXPGN.

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#### What is veXPGN

* XPGN locked → voting power
* time-weighted influence
* non-transferable

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#### What veXPGN Controls

* emissions (farming incentives)
* execution parameters (e.g. reward splits)
* P10 configuration
* treasury and POL
* protocol upgrades

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👉 veXPGN governance is binding and executed on-chain.

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### Migration (Points → veXPGN)

Early participants are incorporated into the final governance system.

Points will translate into:

* governance boosts
* proposal participation rights
* early alignment within veXPGN

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👉 The goal is to reward early users without diluting long-term governance integrity.

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### Governance Scope

Governance can control:

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#### ⚡ DEX Parameters

* fee structure
* execution parameters
* routing rules

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#### 🌾 Emissions

* XPGN distribution
* pool incentives
* gauge weights

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#### 📊 P10 Index

* asset eligibility
* rebalance cadence
* caps and constraints

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#### 🏦 Treasury & POL

* buybacks
* liquidity deployment
* treasury allocation

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#### 🛡️ Risk Controls

* oracle parameters
* safety thresholds
* system limits

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### Governance Parameters (Initial)

* proposal threshold: \~25k Points
* quorum: \~1M Points
* majority: 50%+
* critical proposals: higher thresholds
* voting period: 5–7 days
* timelock: ≥ 48h

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👉 All parameters are adjustable via governance.

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### Transparency

Paragon provides:

* governance interface
* proposal tracking
* vote records
* timelock execution logs

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👉 All governance actions are verifiable.

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### System Integration

Governance directly influences:

* execution parameters
* emissions and incentives
* index configuration
* treasury management

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👉 Governance defines how the protocol evolves over time.

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### Roadmap

**S1**

* governance portal
* parameter voting
* initial proposals

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**S2**

* veXPGN launch
* hybrid governance (Points + veXPGN)

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**S3**

* full on-chain governance
* Points transition into participation layer

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### ⚠️ Important Notes

* Points are not tradable
* governance evolves over time
* emergency powers are limited
* transparency is enforced

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### Summary

* Points provide early governance participation
* veXPGN enables long-term control
* governance is tied to usage and contribution
* execution is transparent and enforced

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Paragon governance is designed to transition from participation-based coordination to fully on-chain, token-governed control.