---
title: "Modular Governance and Chain Management"
description: "Neutron's governance system balances efficiency, security, and decentralization through a multi-layered architecture"
icon: "scale-balanced"
---

Neutron's governance model uses a customized fork of DAO DAO contracts to create a flexible, multi-layered system where specialized committees handle day-to-day operations while remaining accountable to tokenholders through innovative oversight mechanisms.

## Governance Architecture

<CardGroup cols={2}>
  <Card title="Neutron DAO (Agora)" icon="building-columns" iconType="duotone">
    The primary governance entity with ultimate authority, governed by Neutron's stakeholders through the NTRN token. Controls network upgrades, crucial parameters, and committees.
  </Card>
  
  <Card title="Committees (subDAOs)" icon="sitemap" iconType="duotone">
    Specialized governance entities with dedicated powers and resources for day-to-day operations like grants and incentive programs.
  </Card>
</CardGroup>

**Chain Manager** mediates between governance and the blockchain's privileged functions through sophisticated permission strategies, enabling granular control of network operations.

**Voting Vaults** are smart contracts that calculate governance power based on various tokenized positions containing NTRN.

## How is Neutron Governance Different?

<div className="p-4 border-l-4 border-primary bg-primary/5 rounded mb-6">
  <strong>Key differences from traditional Cosmos governance:</strong>
  <ul className="mt-2">
    <li>Following the Mercury upgrade, Neutron is now a sovereign chain with its own validator set and staking model</li>
    <li>Voting power comes from bonding NTRN or DeFi tokens containing NTRN through Voting Vaults</li>
    <li>Native stakers can participate in governance through the Staked NTRN Voting Vault</li>
    <li>Specialized Committees handle routine governance to minimize voter fatigue</li>
    <li>Tokenholders can keep Committees accountable through "overrule proposals"</li>
    <li>Chain Manager implements granular permission controls for privileged operations</li>
  </ul>
</div>

## Chain Manager

The Chain Manager implements a permission system to control which entities can execute privileged actions on the blockchain using two **permission strategies**: 

- **ALLOW_ALL**: Grants an entity full access to all privileged functions without restriction
- **ALLOW_ONLY**: Permits an entity to execute only specific message types with possible additional restrictions

### Supported Privileged Messages

<div className="overflow-x-auto">
  <table className="w-full my-4 text-sm">
    <thead>
      <tr>
        <th className="p-2 border-b-2 border-gray-200 bg-gray-100 dark:bg-gray-800 dark:border-gray-700">Message Type</th>
        <th className="p-2 border-b-2 border-gray-200 bg-gray-100 dark:bg-gray-800 dark:border-gray-700">Description</th>
        <th className="p-2 border-b-2 border-gray-200 bg-gray-100 dark:bg-gray-800 dark:border-gray-700">Possible Restrictions</th>
      </tr>
    </thead>
    <tbody>
      <tr>
        <td className="p-2 border-b border-gray-200 dark:border-gray-700 font-mono text-xs">`params.ParamChangeProposal`</td>
        <td className="p-2 border-b border-gray-200 dark:border-gray-700">Changes parameters of modules using the deprecated params module</td>
        <td className="p-2 border-b border-gray-200 dark:border-gray-700">Specific modules and parameters</td>
      </tr>
      <tr>
        <td className="p-2 border-b border-gray-200 dark:border-gray-700 font-mono text-xs">`module_name.MsgUpdateParams`</td>
        <td className="p-2 border-b border-gray-200 dark:border-gray-700">Updates parameters of modules using the new-style param updates</td>
        <td className="p-2 border-b border-gray-200 dark:border-gray-700">Specific fields within the message</td>
      </tr>
      <tr>
        <td className="p-2 border-b border-gray-200 dark:border-gray-700 font-mono text-xs">`cron.AddSchedule`</td>
        <td className="p-2 border-b border-gray-200 dark:border-gray-700">Adds new execution schedules to the CRON module</td>
        <td className="p-2 border-b border-gray-200 dark:border-gray-700">None</td>
      </tr>
      <tr>
        <td className="p-2 border-b border-gray-200 dark:border-gray-700 font-mono text-xs">`cron.RemoveSchedule`</td>
        <td className="p-2 border-b border-gray-200 dark:border-gray-700">Removes schedules from the CRON module</td>
        <td className="p-2 border-b border-gray-200 dark:border-gray-700">None</td>
      </tr>
      <tr>
        <td className="p-2 border-b border-gray-200 dark:border-gray-700 font-mono text-xs">`upgrade.SoftwareUpgradeProposal`</td>
        <td className="p-2 border-b border-gray-200 dark:border-gray-700">Schedules a software upgrade</td>
        <td className="p-2 border-b border-gray-200 dark:border-gray-700">None</td>
      </tr>
      <tr>
        <td className="p-2 border-b border-gray-200 dark:border-gray-700 font-mono text-xs">`upgrade.CancelSoftwareUpgradeProposal`</td>
        <td className="p-2 border-b border-gray-200 dark:border-gray-700">Cancels a scheduled upgrade</td>
        <td className="p-2 border-b border-gray-200 dark:border-gray-700">None</td>
      </tr>
    </tbody>
  </table>
</div>

### Permission Assignments

Current permission assignments include: **Neutron DAO Core Contract** with ALLOW_ALL strategy for comprehensive network control, **Expedited Upgrades Multisig** with ALLOW_ONLY for software upgrade proposals and cancellations, and **Tokenfactory Hooks Multisig** with ALLOW_ONLY for updating tokenfactory hook parameters.

## Neutron DAO (Agora)

The Neutron DAO serves as the highest governance authority, with comprehensive control over the network, including permissions for committees.

### Voting Power System

Neutron uses dedicated smart contracts called **Voting Vaults** to calculate governance power. These vaults can accept any tokenized position containing NTRN:

- **NTRN Vault**: Accepts NTRN deposits and grants 1 point of voting power per token without lock-up
- **LP Token Vaults**: Accepts LP token deposits and counts the underlying NTRN (both NTRN-ATOM and NTRN-USDC pairs have Voting Vaults)
- **Staked NTRN Vault**: Added during the Mercury upgrade, grants 1 point of governance power per NTRN delegated to validators via native staking
- **Virtual Vaults**: Track NTRN held in other contracts (lockdrops, vesting contracts), ensuring all NTRN holders can participate in governance

### Proposal Types

<CardGroup cols={3}>
  <Card title="Single-choice Proposals" icon="check" iconType="duotone">
    Standard yes/no decisions with a 50% threshold
  </Card>
  
  <Card title="Multiple-choice Proposals" icon="list-check" iconType="duotone">
    Decisions with multiple options where the most-voted option wins
  </Card>
  
  <Card title="Overrule Proposals" icon="ban" iconType="duotone">
    Special proposals with a lower threshold (0.5%) for overruling subDAO decisions
  </Card>
</CardGroup>

## Committees (subDAOs)

The Agora can create specialized Committees with specific powers and resources for day-to-day operations. These subDAOs are customizable in terms of **membership** (defining who can participate), **voting weight** (configuring how votes are weighted), and **execution rights** (setting specific parameters and permissions).

### Active SubDAOs

**Cron SubDAO**: Manages scheduling proposals for the [Cron module](/developers/modules/cron/overview), enabling automated contract executions through governance oversight. This subDAO handles routine scheduling decisions while remaining accountable to the main DAO through the overrule mechanism.

**Security SubDAO**: A specialized subDAO that can only execute `pause()` methods on certain contracts, enabling rapid response to security incidents. This subDAO can pause other subDAOs, the Reserve contract, and the Distribution contract.

### Timelocks & Overrules

<div className="p-4 border-l-4 border-primary bg-primary/5 rounded my-6">
  <strong>The overrule mechanism works as follows:</strong>
  <ol className="mt-2 space-y-2">
    <li>When a subDAO proposal passes, it enters a timelock period (typically 3 days)</li>
    <li>During this period, the main DAO can create an overrule proposal with a low threshold (0.5%)</li>
    <li>If the overrule proposal passes, the subDAO proposal is rejected</li>
    <li>If no overrule occurs, the subDAO proposal executes after the timelock period</li>
  </ol>
</div>

## Benefits and Parameters

**Efficiency**: Specialized committees handle routine matters, reducing governance overhead and minimizing voter fatigue.

**Accountability**: Committees are given autonomy while the main DAO can overrule with low threshold, with timelock periods ensuring transparency.

**Participation**: Voting Vaults enable DeFi participation, reducing opportunity costs with multiple ways to gain governance power.

### Governance Parameters

**Main DAO Proposals**: 1000 NTRN deposit (refunded for passed proposals), 2-week voting period, 5% quorum, 50% threshold for single-choice proposals.

**Overrule Proposals**: No deposit required (created automatically), 3-day voting period, 0.5% threshold, revoting disabled for immediate execution.

**Note**: Following the Mercury upgrade, Neutron operates as a sovereign chain with its own validator set and staking model, detailed in the [Proof of Liquid Staking](/concepts/proof-of-liquid-staking) documentation.