Governance Procedures

Clip Finance will undergo a three-stage governance process, ensuring the smooth and efficient development of the protocol while gradually transitioning to a fully decentralized system where both on & off-chain governance systems are implemented.

Stage 1: Multisig Governance

In the initial stage, most of the governance will be conducted through and executed by the core contributors' multi-sig wallet. This approach ensures swift and continuous development of the protocol while allowing the community to participate in decision-making.

During this stage, governance will include:

  • Creating and discussing proposals on the Clip Finance forum

  • Voting on proposals using

  • Execution of approved proposals by the core contributors' multi-sig wallet

Stage 2: Implementation of On-Chain Governance

As Clip Finance progresses, the governance structure will transition to a combination of on-chain & off-chain governance. In this stage, the ownership of the contracts will be transferred to a timelock contract, providing an additional layer of security and decentralization.

Delegating Governance Power to Core Contributors

To ensure that core contributors can actively participate in the governance process from the start, an equivalent amount of voting rights of the first milestone allocation will be delegated to their wallets. This delegation will enable core contributors to create proposals and vote on them until they receive their token allocation.

Once the first milestone is reached and tokens are allocated, the governance structure will progress to the combination of the on-chain & off-chain governance system outlined in Stage 2.

By following this governance process, Clip Finance aims to strike a balance between the efficiency and agility of off-chain decision-making and the security and decentralization of on-chain governance. This approach will allow the protocol to adapt and evolve while maintaining the highest standards of transparency and community involvement.


In Clip Finance, a mechanism is implemented to encourage well-thought-out proposals and discourage spam or malicious proposals. To submit a proposal, users are required to lock a certain amount of Clip (CLIP) tokens. The locked tokens function as a deposit, ensuring that the proposer has a vested interest in the success of the proposal and the protocol.

Step-by-Step Guide for Locking Tokens to Submit a Proposal

  1. Acquire CLIP tokens: Before you can submit a proposal, you need to have a sufficient amount of CLIP tokens in your wallet. You can acquire CLIP tokens through various methods such as purchasing them on decentralized exchanges or participating in liquidity mining programs.

  2. Access the Clip Finance Governance Portal: Navigate to the Clip Finance Governance Portal using a web3-enabled browser. Ensure that your wallet is connected to the portal.

  3. Lock CLIP tokens: In the Governance Portal, find the "Lock Tokens" section. Here, you can specify the amount of CLIP tokens you wish to lock. Please note that there is a minimum requirement for the number of tokens that must be locked to submit a proposal. Enter the amount and click "Lock Tokens" to proceed.

  4. Receive Governance Clip Tokens (GCLIP): Once the transaction is successful, you will be issued Governance Clip Tokens (GCLIP) equivalent to the number of CLIP tokens locked. GCLIP tokens represent your locked CLIP tokens and your voting power in the governance process. These tokens will be visible in your wallet and on the Governance Portal.

  5. Create a proposal: With GCLIP tokens in your wallet, you can now create a proposal. Navigate to the "Create Proposal" section in the Governance Portal and fill out the required information, including a title, description, and any necessary links to supporting documentation. Once complete, click "Submit Proposal."

  6. Proposal review and voting: After submitting your proposal, it will be reviewed by the community and may proceed to the voting stage. If your proposal reaches the voting stage, other CLIP & GCLIP holders can vote for or against your proposal.

  7. Unlocking CLIP tokens: If your proposal is approved and executed, or if you no longer wish to participate in governance, you can unlock your CLIP tokens 30 days after the lock or proposal outcome by navigating to the "Unlock Tokens" section in the Governance Portal. Specify the amount of GCLIP tokens you wish to unlock and click "Unlock Tokens." Confirm the transaction in your wallet, and your CLIP tokens will be returned to you, while the equivalent GCLIP tokens will be burned.

By implementing a token-locking mechanism, Clip Finance ensures that governance participants have a genuine interest in the protocol's success and helps maintain the integrity of the governance process.


In order for a proposal to succeed, a minimum of XXX CLIP or GCLIP must participate in the vote. Any changes to the quorum requirements must be amended by the community through a CIP (CLIP Improvement Proposal).

Each vote has to reach the minimum quorum, even if it has a majority, for it to be considered an official proposal. It is the responsibility of the proposal author to enlist voting participation from the community in order to reach a quorum.


Clip Finance Governance enacts policies on key parameters that are determined within the protocol. A policy is defined as a set of governance-defined rules that control specific aspects of the protocol or individual strategy. Policies set the governance-defined rules and can be classified as follows:

  1. Protocol Policies: These policies govern the overall behaviour of the protocol and the entities belonging to it. They regulate specific aspects of the protocol related to safety, economics, and expansion.

  2. Strategy Policies: These policies are defined in the context of each strategy and, for strategies belonging to the Clip Finance ecosystem, they are specified within the boundaries identified by the Protocol Policies. A strategy participating in the Clip Finance ecosystem needs to operate under safety policies that do not violate the protocol safety policies.

The governance of these Policies is the core function of Clip Finance as a protocol for yield optimization.

Protocol Policies

  • Risk Policies: The Risk Policies define the set of rules that ensure the safety and protection of the protocol and the users participating in it. Risk Policies include, but are not limited to, decision-making for:

    • Assets compatible for integration within Clip Finance: The list of assets for which risk is deemed acceptable for the safety of the protocol.

    • Base risk parameters for strategy implementation and liquidation: The risk parameters that are governed affect all yield optimization strategies and set global boundaries for those strategies.

  • Improvement Policies: Improvement policies define rules under which ecosystem improvements are incepted, developed, and applied to the ecosystem, including but not limited to:

    • Smart Contracts

    • Governance processes

    • Governance contracts

  • Incentives Policies: Incentives Policies define the rules under which token incentives in Clip Finance are generated. Financial incentives are used to shape behaviours within the ecosystem to achieve a common objective. For Clip Finance, the common goal is to ensure the safety of the protocol, cost-efficient usage by the market participants, and proper ecosystem incentives to drive innovation and long-term growth of the ecosystem.

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