Baumz Governance — How the Protocol Becomes Community-Owned

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Baumz Governance — Progressive Decentralization Through Merit and Alignment

Baumz is being built as a financial execution layer that outlives its founding team. Governance is not an afterthought or a “DAO wrapper” applied for decentralization optics — it is a structural requirement for durability, trust, and neutrality in the protocol’s evolution.

In perpetual DEX architecture, governance is effectively a risk primitive. Who controls listings, oracle architecture, liquidation thresholds, stablecoin strategy parameters, and funding curves is effectively who controls trader safety and protocol trajectory. Baumz governance ensures these levers are migrated from team-owned → community-directed.

Why Governance Matters

What	Why it matters
Perp risk parameters	Determines liquidation fairness
Listing synthetic assets	Must be curated to prevent oracle drift
Reward emissions	Prevents hyperinflationary “farm & dump” models
Treasury deployment	Aligns liquidity incentives with sustainability
Chain expansion	Chosen by users, not management
Strategy vaults	Community controls what earns yield

Governance is how Baumz moves from protocol to public market infrastructure.

Governance Architecture — Three Layers

Baumz governance is intentionally multi-layered to prevent token-plutocracy and governance capture.

Layer	Mechanism	Participants	Role
L1: Base Layer	Token-weighted	BZ holders	Universal voting rights
L2: Merit Layer	Contribution-weighted	Active traders & builders	Higher weight for protocol value creators
L3: Strategic Layer	Delegate validation	Ecosystem partners	Stability and directional oversight

This structure ensures that:

• Holders influence economics,
• Active users guide product direction,
• Strategic actors guard systemic safety.

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What Governance Controls

Category	Examples
Perpetual parameters	Leverage ceilings, funding curve logic
Oracle policy	Eligible data feeds, safety requirements
Asset listings	Crypto perps, RWA perps, forex pairs
Incentive structure	Reward seasons, emissions curve
Treasury	Liquidity bootstrapping and grants
Expansion	Which L2s/appchains to support next

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Voting Power Formula (Math Notation)

Baumz does not use purely token-based voting. Usage and contribution also matter.

VP = T + U + (B × M)

Where:

• T = Token holdings weight
• U = On-chain usage score (trading & participation)
• B = Builder/contributor credibility
• M = Merit multiplier

This prevents governance capture by passive holders and rewards those who actually create value in the ecosystem.

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Governance Lifecycle

Draft → Temperature Check → Formal Proposal → L1 Vote → L2 Merit Review → L3 Delegate Validation → Onchain Execution

This ensures governance is not easily hijacked by a single well-capitalized voter cohort.

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Governance Diagram (Mermaid)

flowchart TD
A[Proposal Draft] --> B[Temperature Check]
B --> C[Formal Submission]
C --> D[Base Layer Vote\n(BZ Holders)]
D --> E[Merit Layer Review\n(Traders + Builders)]
E --> F[Strategic Layer Validation\n(Delegates/Partners)]
F --> G[Onchain Execution]

subgraph L1[Base Layer]
  D
end

subgraph L2[Merit Layer]
  E
end

subgraph L3[Strategic Layer]
  F
end

Why This Model Is Hard to Copy

Most projects ship token governance and call it decentralization. But:

• If tokens alone decide → whales dominate direction
• If usage alone decides → governance lacks capital discipline
• If multisigs alone decide → governance is not real

Baumz combines all three — usage, commitment, and competency — into a composable voting vector. This is structurally defensible and aligned with long-term protocol integrity.

Path to Decentralization

Full decentralization is not a “flip a switch” event — it is staged through progressive delegation until the protocol is credibly neutral.

About Baumz

Baumz is a decentralized derivatives ecosystem built across major EVM and non-EVM chains, offering spot, perpetual, and cross-chain asset trading with deep liquidity, low latency, and a paradigm-shifting economic model that aligns protocol and trader interests.