# 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 the same as on the Cosmos Hub: Yes, No, NoWithVeto, and Abstain. NoWithVeto is the same as No but also votes that the proposer should lose their deposit. The intended cultural norm is that No should be used to indicate disagreement with good-faith proposals and NoWithVeto should be used to deter spam proposals.

## Proposals

Penumbra users can propose votes by escrowing a minimum amount of PEN. They do this by creating a transaction with a CreateProposal description, which consumes some amount of PEN from the transaction’s balance, and creates a new escrow note with the same amount. The note is escrowed in the sense that it is recorded seperately and is not included in the note commitment tree until voting completes.

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Proposals can also be withdrawn by their proposer prior to the end of the voting period.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 WithdrawProposal 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 For instance, a chain upgrade proposal can be withdrawn and re-proposed with a different source hash if a bug is discovered while upgrade voting is underway. Withdrawn proposals cannot be accepted, even if the vote would have passed, but they can be vetoed.1

## Voting

Stakeholder votes are of the form , representing the weights for yes, no, abstain, and veto 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 proving that the note was included in a recent note commitment tree state, it always uses the root of the note commitment tree at the time that voting began, establishing that the note was not created after voting began. Second, 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.

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 vetoed, the escrowed note from the Proposal description is included in the note commitment tree, so that it can be spent by the proposer. Otherwise, it is not, and the funds are burned.