Abstract

This document presents a proposed governance structure for Infinex, whereby a representative body referred to as the “Infinex Council” would be elected if passed. This council would be entrusted to vote on Infinex Improvement Proposals (XIPs) submitted by the community – a process designed to guarantee that protocol modifications are transparent, decentralized, and community-governed.

The proposed governance framework outlined in this document will be voted on by SNX tokenholders. The following three options will be presented to voters:

• No
  • The proposed framework is rejected, and will be amended and re-proposed if necessary
• Yes – five seats
  • The proposed framework is approved with a five-seat Infinex Council
• Yes – seven seats
  • The proposed framework is approved with a seven-seat Infinex Council

If the sum of the two Yes votes make up a majority, the framework is ultimately approved by the community, the following actions will occur:

1. Build and deploy the smart contracts to facilitate the election of the Infinex Council.
   1. These contracts will be forked from the Synthetix V3 Governance Module
2. Nomination and election of the first Infinex Council
3. Development and ratification of the XIP framework
4. Voting of proposed XIPs by the Infinex Council

Specification

Overview

There are three major components of the new proposed governance system:

1. The Infinex Council
2. Elections
3. Infinex Improvement Proposals (XIPs)

It is proposed that the governance of Infinex will revolve around a single council responsible for overseeing the protocol and its treasury. This elected council, which will be known as the Infinex Council, will vote on community-proposed changes (XIPs) to the Infinex protocol. The council will then allocate resources and engage Core Contributors to execute these changes.

The council will operate on six-month epochs, during which they vote on proposals and modifications. To ensure a fair and democratic process, various stakeholders in Infinex are allocated voting power in the council elections and vote on respective seats to represent them.

The Infinex Council

In this system, an Infinex Council will be elected to govern over six-month epochs, of which there will be four types of seats. Based on community discussion, there are two potential seat structures to vote on:

• Five seats, or
• Seven seats

Council seat (amount)	Option 1: Five seats	Option 2: Seven seats
Core Contributor seat	1 seat	2 seats
Ecosystem seat	2 seats	2 seats
Treasury seat	1 seat	1 seat
Trader seat	1 seat	2 seats

Each type of seat will have specific responsibilities to represent their voters, in addition to general duties:

• Reviewing and overseeing proposals put forth by the community to improve the protocol
• Deploying and managing ratified changes to the protocol
• Facilitating administrative duties in deploying funds from the Infinex treasury

A monthly stipend of 1000 SNX tokens will be paid to each councillor for their engagement.

Nominations and elections for each position will vary, as proposed below:

Council seat	Who can be nominated	Elected by
CC seat	Holders of a CC NFT	SNX Stakers
Ecosystem seat	Anyone	SNX Stakers
Treasury seat	Anyone	Holders of the Investor NFT
Trader seat	Anyone	Governance Farmers

Core Contributor (CC) seat

The CC seat will represent the Core Contributors of Infinex, which seeks to ensure that there is always a voice on the council with a deep understanding of the protocol’s existing implementations.

A councillor in the CC seat will be specifically responsible for:

1. Managing the protocol upgrades and deployments
2. Onboarding and off-boarding CCs
3. Organising and prioritising the tasks of CCs
4. Setting up stipends and other financial incentives with the assistance of the Treasury seat councillor
5. Liaising with the Infinex Council and external collaborators on behalf of the CCs

Nominations for a CC seat are only open to those who hold an Infinex CC NFT, and are subject to voting by Synthetix stakers.

Ecosystem seat

The Ecosystem seat will represent the Synthetix community. A councillor in the Ecosystem seat will advocate for the interests of the broader Synthetix ecosystem, and their place on the council is designed to foster alignment of interests among protocols.

Nominations for an Ecosystem seat will be open to anyone, and are subject to voting exclusively by Synthetix stakers.

Treasury seat

The Treasury seat will be responsible for managing the treasury and will use funds to bootstrap the project and ensure its long-term sustainability.

In each scenario where a five or seven-seat council is voted in, the Treasury seat councillor will hold veto power without unilateral control over assets.

• If a five-seat council is voted in, transactions from the Infinex treasury will require 5/7 signatures, of which the Treasury seat councillor will have three signatures.
• If a seven-seat council is voted in, transactions from the Infinex treasury will require 7/10 signatures, of which the Treasury seat councillor will have four signatures.

The Treasury seat councillor will be primarily responsible for initiating transactions, while the other council members can also propose transactions but are primarily responsible for signing them.

Nominations for a Treasury seat will be open to anyone, and are subject to voting exclusively by Investors and Lenders associated with Infinex.

Trader seat

The Trader seat will be responsible for representing the interests of the broader CeFi and DeFi ecosystem, particularly centralized exchange traders. Their inclusion ensures that the spectrum of opinions within the crypto ecosystem is more fully represented in decisions made by the Infinex Council.

Nominations for a Trader seat will be open to anyone, and are subject to voting by recipients of voting power from the governance farming program, outlined in detail below.

Elections

To initiate the formation of the Infinex Council, individuals will first need to be nominated to fill each seat, using their Ethereum wallet on the Optimism network. Once nominated, elections will promptly begin and last for seven days to determine the exact occupants of the respective seats.

To vote in Infinex elections, members will need to fulfil one of the following three capacities:

1. Have SNX tokens staked
2. Have acquired governance power via governance farming
3. Be an Investor or Lender of Infinex

Staking SNX

To become an SNX staker, community members can use the Synthetix staking interface to stake the SNX token. This process will mint debt in the form of sUSD tokens. This debt will directly converts to voting power in the election of the community and core contributor seats, as is done in Synthetix council elections. The more sUSD debt that a participant has outstanding at the voting snapshot time, the more voting power they will have in the election of the Infinex Council.

Governance Farming

Farming governance points enable the broader trading community outside of the Synthetix ecosystem to acquire voting power in elections, which will be used to elect two councillors to the Trader seats on the Infinex Council.

Any trader from a centralized or decentralized exchange will be able to earn governance points by connecting their wallet to the ‘Infinex Mansion’ and selecting their desired ‘room’ to participate in.

Active traders can farm governance points by connecting their wallet and either:

1. Depositing an exchange native token from another project (centralized or decentralized exchanges)
2. Connecting their read API keys to verify volume traded on centralized exchanges

Governance points (GP) will be determined by the following formula:

where:

Governance points will be distributed across the seven-day farming period according to a function that rewards early farmers. For example, a trader who farms during the first half of the farming period will earn more governance points than a trader who farms during the second half, holding all else constant.

FTX creditor status can be verified by uploading the customer claim form received from claims.ftx.com. A guide on how to do this will be released with the launch of the governance farms.

After researching scenarios and discussing the priorities of governance farming with the Infinex community, the proposed parameters are:

The parameters have been chosen such that higher historical volume, earliness of farming, and longer duration of farming will yield a high allocation of governance points. $d$ is chosen such that having FTX creditor status produces the equivalent effect of depositing $10,000 in an exchange native token.

Consider Bob, a Binance user. He has:

• $10,000 worth of BNB
• $1,000,000 of historical trading volume on Binance
• Verifiable creditor status on FTX
• Farmed for the first half of the farming period

He would be allocated 2,005,539.77 governance points. If Bob had farmed for the second half instead, he would have received 1,517,221.01 governance points, since a higher weight is given to earlier farmers

Compare this to Alice, a BitMEX user, who has not invested as much into the exchange native token (BMEX) as Bob had into BNB, but has traded ten times more volume:

• $5,000 worth of BMEX
• $10,000,000 of historical trading volume on BitMEX
• Verifiable creditor status on FTX
• Staked for first half of the farming period

She would be allocated 8,824,424.22 governance points – far more than Bob, given her higher historical trading volume. If she had instead staked for the second half of the governance farming period, she would have received a lesser allocation of 5,024,660.91 governance points.

Investors and Lenders

‘Investors and Lenders’ are financial contributors of Infinex, and may encompass Venture Capital funds, KOLs, angel investors, or ecosystem partners of Infinex. This selection of individuals will be minted an NFT that represents their financial contribution, which will then be used as voting power in Infinex governance for voting on the Treasury seat.

Infinex Improvement Proposals (XIPs)

Infinex Improvement Proposals (XIPs) are an adaptation from EIP (Ethereum Improvement Proposal), which will be a design document providing information to the Infinex community about a proposed improvement, update, or change to the system.

XIP Rationale

Once the first Infinex Council is established, XIPs are proposed as the primary mechanism for suggesting new features, collecting community input on an issue, and documenting design decisions for changes to Infinex.

XIP Work Flow Summary

Parties involved in the process include the author, the XIP Editors, the Infinex CC, the Infinex Council, and the Infinex Community. The XIP workflow comprises three stages:

1. Creation

Anyone will be able to submit an XIP, and it will begin as a Draft. It must then meet specific formatting criteria (largely, correct metadata in the header), and be manually approved by an editor for initial community discussion and consideration.

The author of the XIP proposal is responsible for building consensus within the community, and documenting dissenting opinions.

1. Voting

Once a Draft is believed to be mature enough and ready to progress, it must be Approved to be executed. Approval of an XIP will be granted through:

• Consultation with at least one member of the Infinex council, found through the Infinex Discord when elections conclude. They will assess whether the proposal needs a ‘Feasibility study’.
• If it does need a ‘Feasibility Study’, the XIP will progress to the Feasibility stage. It will then be assigned a CC who will work with the author to conduct a ‘Feasibility study’. Once all parties are satisfied, the XIP is moved to IC Review Pending where it will be discussed and then voted upon.
• If it does not need a ‘Feasibility Study’, the XIP will progress straight to IC Review Pending where it will be discussed and then voted upon.

1. Approval

XIPs will be voted on by the Infinex Council, and proposals are passed under a majority decision. Approved XIPs are moved to Approved, and then Implemented by the Infinex Council, protocol CCs, or community members. Otherwise, it is Rejected.

Authors of the XIP that are implemented are then entitled to a reward from the Infinex protocol.

Meta-Governance

Meta-Governance within Infinex would signify a higher-order governance mechanism, which would allow changes to any existing governance framework at any point in time. This approach will necessitate the participation and voting by SNX token-holders, who play a pivotal role in the decision-making process by voting ‘Yes’ or ‘No’ with voting power based on their Synthetix debt shares.

The process may involve forking, whereby the prevailing governance framework undergoes the desired modifications. For these changes to be acknowledged and validated, there must be a collective agreement or social consensus among the community, in addition to the approval from SNX token-holders. This consensus will be crucial for adopting and recognizing the new fork as the authoritative and accepted governance structure in a decentralized manner.

Through Meta-Governance, Infinex ensures a dynamic and adaptable governance model, responsive to the evolving needs and preferences of the community.

Core Contributors

Core Contributors are individuals who hold a CC NFT, which are minted to individuals who are recognised for providing continual value to Infinex through their speciality. Infinex engages these individuals under the guidance of the councillor(s) in a Core Contributor seat.

Copyright

Copyright and related rights waived via CC0.