# B6. Governance

#### What Governance Means

Governance empowers EDM holders to shape how the Trade rail operates day-to-day. Through voting, you can influence how milestones function, how evidence is checked, the timing of fund releases after proof, and how the non-burned portion of protocol fees is distributed. However, the foundational rules that ensure system safety and integrity remain out of scope for governance.

#### What EDM Holders Can Change

Governance allows EDM holders to tune operational parameters and templates, all within clearly defined boundaries. Changes are transparent, visible on the Explorer, and time-delayed for security.

* **Milestones & Timing:**
  * Default milestone sets per trade lane (e.g., adding/removing Customs, splitting Arrival into Receipt/QA)
  * Buyer review window length (0–4 hours) and top-up deadlines before On-Board, all within safe limits
  * Payout schedules (e.g., 20/60/20 vs 20/10/70), always totaling 100% and within published bands
* **Evidence & Quality:**
  * Plain-language evidence checklists for each gate
  * Tolerance bands and variance formulas for shipment, damage, shelf-life, and cold chain (platform applies the math approved by governance)
* **Funded-on-Proof Scope:** Define which whitelisted partner types (carrier, SGS/Intertek/BV, warehouse, OEM) can receive funded-on-proof EDSD, by lane.
* **Attestors & Disputes:** Adjust SLA thresholds, reward weights, rotation cadence, penalties, dispute SLA clocks, and name the neutral dispute resolver for each route.
* **Treasury & Transparency:** Set the split of the non-burn half of protocol fees across attestors, network ops, builders, and ecosystem (within defined bands). Adjust treasury handling parameters for Locked EDSD (e.g., T-bill allocation), reporting cadence, and proof-of-reserves detail.

**Fee Policy Note:** The protocol fee for trade remains fixed at 0.5% per paid stage with strict per-tranche caps (≤ $1M → $5k; $1–5M → $25k; > $5M → $50k). Governance can adjust payout schedules, not the protocol fee rate.

#### What EDM Holders Cannot Change

Certain rules are immutable to protect safety, trust, and economic integrity:

* No EMT, no funds – payment only occurs when a gate passes.
* One-Claim – the same evidence cannot be reused on EDMA.
* Must-fund before shipping – after Pre-Ship EMT, buyer must fund remaining milestones before any shipping action.
* Locked EDSD only unlocks on proof – off-platform cash-out only after schedule completion.
* 50% of each stage’s protocol fee is always burned at release, posted with a hash.
* Legal, AML/KYC, sanctions, and jurisdictional restrictions.

#### Who Gets a Voice

Only EDM holders have voting power. You may vote directly or delegate your voting power to a representative (such as a builder, attestor, or logistics lead) without transferring your tokens. Voting power can be increased by staking or locking EDM, with optional time-weighting for long-term alignment. Proposals are made through short, public EDIP-B drafts that clearly state what changes, why, and how core rules remain intact.

#### How a Vote Works

* Draft → Temp check → On-chain vote → 72h timelock → Execute
* All changes are rate-limited and bounded, with min/max steps per vote
* The Explorer transparently shows the proposal text, quorum/yes rates, parameter changes, and the block of effect

Safeguards ensure that if a passed change violates a bound or law, it does not execute, and the Explorer explains why. In rare cases, a narrowly scoped pause (≤72h) can be applied to a specific module, followed by a public post-mortem and return to governance for unpausing.

#### Why This Model Works

You shape the aspects you interact with daily—milestone templates, evidence checklists, operational clocks, and how the non-burn half of protocol fees supports those who maintain the rail. The core foundation, however, remains untouchable. This balance ensures users have a real voice, EDSD remains secure until proof, burns stay tied to actual work, and the marketplace remains fair, predictable, and efficient.

**Governance = your EDM, your vote, your rail.**