# Governance

Penumbra supports on-chain governance with delegated voting. Validators’ votes are public and act as default votes for their entire delegation pool, while delegators’ votes are private, and override the default vote provided by their validator.

Votes are similar to Cosmos Hub: Yes, No, and Abstain have the same meanings. However, Penumbra does not have NoWithVeto; instead, a sufficiently high threshold of “no” votes (determined by a chain parameter) will slash a proposal, which causes its deposit to be burned. This functions as a spam deterrent.

## Proposals

Penumbra users can propose votes by escrowing a minimum amount of PEN. They do this by creating a transaction with a ProposalSubmit description, which consumes some amount of PEN from the transaction’s balance, and creates a proposal_N_voting NFT, which can be redeemed for the proposal deposit in the case that the voting concludes without slashing the proposal (both failed and passed proposals can reclaim their deposit).

Proposals can either be normal or emergency proposals. In either case, the voting period begins immediately, in the next block after the proposal has been committed to the chain. Normal proposals have a fixed-length voting period, while emergency proposals are accepted as soon as a 2/3 majority of the stake is reached.

Because validators provide default votes for their delegation pool, an emergency proposal can in principle be accepted immediately, without any input from delegators. This allows time-critical resolution of emergencies (e.g., deploying an 0day hotfix); the 2/3 majority of the stake required is already sufficient to arbitrarily rewrite the chain state.

Proposals can also be withdrawn by their proposer prior to the end of the voting period. This is done by creating a transaction with a ProposalWithdraw description, and allows the community to iterate on proposals as the (social) governance process occurs. For instance, a chain upgrade proposal can be withdrawn and re-proposed with a different source hash if a bug is discovered while upgrade voting is underway. Withdrawn proposals cannot be accepted, even if the vote would have passed, but they can be slashed.1

## Voting

Stakeholder votes are of the form , representing the weights for yes, no, and abstain, respectively. Most stakeholders would presumably set all but one weight to . Stakeholders vote by proving ownership of some amount of bonded stake (their voting power) prior to the beginning of the voting period.

To do this, they create a transaction with a Vote description. This description identifies the validator and the proposal, proves spend authority over a note recording dPEN(v), and reveals the note’s nullifier. Finally, it proves vote consistency , produces a new note with dPEN(v), and includes , an encryption of the vote weights to the validators’ decryption key.

The proof statements in a Vote description establishing spend authority over the note are almost identical to those in a Spend description. However, there are two key differences. First, rather than checking the note’s nullifier against the global nullifier set and marking it as spent, the nullifier is checked against a snapshot of the nullifier set at the time that voting began (establishing that it was unspent then), as well as against a per-proposal nullifier set (establishing that it has not already been used for voting). In other words, instead of marking that the note has been spent in general, we only mark it as having been spent in the context of voting on a specific proposal. Second, the ZK proof additionally proves that the note was created before the proposal started, and the stateful checks ensure that it was not spent after the proposal started.

This change allows multiple proposals to be voted on concurrently, at the cost of linkability. While the same note can be used to vote on multiple proposals, those votes, as well as the subsequent spend of the note, will have the same nullifier and thus be linkable to each other. However, the Vote descriptions are shielded, so an observer only learns that two opaque votes were related to each other.

We suggest that wallets roll over the note the first time it is used for voting by creating a transaction with Vote, Spend, and Output descriptions. This mitigates linkability between Vote and Spend descriptions, and means that votes on any proposals created after the first vote are unlinkable from prior votes.

If the vote was not slashed, the proposal_N_voting NFT created during proposal submission can be redeemed for the original proposal deposit (if not slashed) and a commemorative proposal_N_passed, proposal_N_failed, or proposal_N_slashed NFT.