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Lit Protocol’s governance system is built around four core areas of responsibility:
  1. Protocol Upgrades
  2. Ecosystem Funding and Resource Distribution
  3. Node Operator Onboarding and Coordination
  4. Metagovernance
Each of these functions is administered by the Lit Association and the core development team in collaboration with the broader $LITKEY community.

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Protocol Upgrades

Protocol upgrades refer to updates to the core Lit Protocol software that node operators run. These updates may include performance improvements, security patches, support for new cryptographic primitives, or entirely new functionality. Upgrades are reviewed and approved by the Protocol Council, a group of core maintainers who coordinate updates via the Protocol Multi-Sig. This multisig acts as the final gatekeeper for pushing updates to the network. Upgrade process:
  1. Proposal and Review: Proposed builds are posted on the governance forum for public review and comment at least one week prior to implementation.
  2. Feedback Consideration: Community feedback is encouraged and incorporated wherever possible.
  3. Approval and Release: Once reviewed and finalized, the build is approved by the Protocol Council and distributed to Lit Protocol node operators for installation.
Protocol Council Multisig Address (2 of 3): 0xC6EBB3ca53D028F419F677Ed45126490331F728b

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Ecosystem Funding and Resource Distribution

The system by which funds and resources are allocated to the wider Lit Protocol ecosystem is actively being worked out. LIP-001 proposes to handle this via a new token model, veLITKEY, which would give LITKEY stakers the power to govern token emissions and where funds are allocated. Review the proposal.

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Node Operations

Lit remains a federated network at this stage. This means that the set of node operators responsible for performing threshold cryptographic operations is curated, but members of the community can openly participate pending they meet the hardware and staking requirements. New node operators will be approved, onboarded, and rotated on a quarterly basis, or sooner in the event of major network expansion (e.g. the launch of new Realms to scale the network). In the future, as the network scales and new Realms are spun up, new node operators may be selected for participation in specific Realms even outside of regular onboarding windows. The initial node operator set has been selected via a staking contest that ran after Lit’s token generation event (TGE). You can always stake your tokens to support the network and earn rewards via the Staking Portal. To learn more about node operations, please reference the node operator docs.

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Metagovernance

As the network and governance processes evolve, mechanisms for decision-making, funding, upgrades, and node coordination will require ongoing refinement. This function—metagovernance—encompasses the rules and structures that govern the governance system itself. Metagovernance includes:
  1. Adjusting quorum or voting thresholds
  2. Creating or deprecating working groups
  3. Modifying proposal flows or funding mechanisms
  4. Delegating additional responsibilities to the community over time
Changes to any of these governance-level systems may be proposed through the Lit Improvement Proposal (LIP) process. LIPs are the primary method for community members to formally propose changes to any category outlined above. Read about the LIP process.

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A Note on v0 Governance

At launch, governance operations will be handled by the core development company working in collaboration with the Lit Association. Updates and transparency reports will be posted on the governance forum so the community can track decisions and outcomes. Because Lit Protocol has not yet launched its Naga mainnet, the scope of governance in v0 is intentionally limited. There is comparatively little to govern before mainnet is live, and changes to the initial governance structure will be introduced prior to the launch of Naga mainnet to support a broader and more decentralized system. During the first 30 days following the Lit Protocol TGE, the governance process will be refined and operational responsibilities gradually delegated to key stakeholders — including node operators, teams and individuals building on Lit and Vincent, and other external contributors — giving the wider ecosystem more control over governance operations. Feedback and suggestions on governance are encouraged and can be submitted via the governance forum. This phased approach makes the process transparent and allows the system to mature in step with the network’s evolution.