Governance Module

Canto's on-chain governance system leverages the Cosmos SDK x/gov module. In this system, $CANTO stakers can vote on proposals with votes weighted proportionally to their stake.
The module supports the following basic features:
  • Proposal submission: Users submit governance proposals with a deposit. Once the minimum deposit is reached, the proposal enters voting
  • Voting: Participants can vote on proposals that reached MinDeposit
  • Inheritance and penalties: Delegators inherit their validator's vote if they don't vote themselves.
  • Claiming deposit: Users that deposited on proposals can recover their deposits if the proposal was accepted OR if the proposal never entered voting period.

Proposal submission

Every account can submit proposals by sending a MsgSubmitProposal transaction through a Canto node. Once a proposal is submitted, it is identified by its unique proposalID.

Proposal Messages

A proposal includes an array of sdk.Msgs which are executed automatically if the proposal passes. The messages are executed by the governance ModuleAccount itself. Modules such as x/upgrade, that want to allow certain messages to be executed by governance only should add a whitelist within the respective msg server, granting the governance module the right to execute the message once a quorum has been reached. The governance module uses the MsgServiceRouter to check that these messages are correctly constructed and have a respective path to execute on but do not perform a full validity check.


To prevent spam, proposals must be submitted with a deposit in the coins defined by the MinDeposit param.
When a proposal is submitted, it has to be accompanied with a deposit that must be strictly positive, but can be inferior to MinDeposit. The submitter doesn't need to pay for the entire deposit on their own. The newly created proposal is stored in an inactive proposal queue and stays there until its deposit passes the MinDeposit. Other token holders can increase the proposal's deposit by sending a Deposit transaction. If a proposal doesn't pass the MinDeposit before the deposit end time (the time when deposits are no longer accepted), the proposal will be destroyed: the proposal will be removed from state and the deposit will be burned (see x/gov EndBlocker). When a proposal deposit passes the MinDeposit threshold (even during the proposal submission) before the deposit end time, the proposal will be moved into the active proposal queue and the voting period will begin.
The deposit is kept in escrow and held by the governance ModuleAccount until the proposal is finalized (passed or rejected).

Deposit refund and burn

When a proposal is finalized, the coins from the deposit are either refunded or burned according to the final tally of the proposal:
  • If the proposal is approved or rejected but not vetoed, each deposit will be automatically refunded to its respective depositor (transferred from the governance ModuleAccount).
  • When the proposal is vetoed with greater than 1/3, deposits will be burned from the governance ModuleAccount and the proposal information along with its deposit information will be removed from state.
  • All refunded or burned deposits are removed from the state. Events are issued when burning or refunding a deposit.



Participants are users that have the right to vote on proposals. On Canto, participants are bonded $CANTO holders. Unbonded $CANTO holders and other users do not get the right to participate in governance. However, they can submit and deposit on proposals.
Note that some participants can be forbidden to vote on a proposal under a certain validator if:
  • participant bonded or unbonded $CANTO to said validator after proposal entered voting period.
  • participant became validator after proposal entered voting period.
This does not prevent participant to vote with $CANTO bonded to other validators. For example, if a participant bonded some $CANTO to validator A before a proposal entered voting period and other $CANTO to validator B after proposal entered voting period, only the vote under validator B will be forbidden.

Voting period

Once a proposal reaches MinDeposit, it immediately enters Voting period. We define Voting period as the interval between the moment the vote opens and the moment the vote closes. Voting period should always be shorter than Unbonding period to prevent double voting. The initial value of Voting period is 1 hour.

Option set

The option set of a proposal refers to the set of choices a participant can choose from when casting its vote.
The initial option set includes the following options:
  • Yes
  • No
  • NoWithVeto
  • Abstain
NoWithVeto counts as No but also adds a Veto vote. Abstain option allows voters to signal that they do not intend to vote in favor or against the proposal but accept the result of the vote


Quorum is defined as the minimum percentage of voting power that needs to be cast on a proposal for the result to be valid. At launch, quorum is set to 40%.


Threshold is defined as the minimum proportion of Yes votes (excluding Abstain votes) for the proposal to be accepted.
Initially, the threshold is set at 50% of Yes votes, excluding Abstain votes. A possibility to veto exists if more than 1/3rd of all votes are NoWithVeto votes. Note, both of these values are derived from the TallyParams on-chain parameter, which is modifiable by governance. This means that proposals are accepted iff:
  • There exist bonded tokens.
  • Quorum has been achieved.
  • The proportion of Abstain votes is inferior to 1/1.
  • The proportion of NoWithVeto votes is inferior to 1/3, including Abstain votes.
  • The proportion of Yes votes, excluding Abstain votes, at the end of the voting period is superior to 1/2.


If a delegator does not vote, it will inherit its validator vote.
  • If the delegator votes before its validator, it will not inherit from the validator's vote.
  • If the delegator votes after its validator, it will override its validator vote with its own. If the proposal is urgent, it is possible that the vote will close before delegators have a chance to react and override their validator's vote. This is not a problem, as proposals require more than 2/3rd of the total voting power to pass before the end of the voting period. Because as little as 1/3 + 1 validation power could collude to censor transactions, non-collusion is already assumed for ranges exceeding this threshold.

Validator’s punishment for non-voting

At present, validators are not punished for failing to vote.

Governance address

Later, the Canto network may introduce permissioned keys that can only sign txs from certain modules. For the MVP, the Governance address will be the main validator address generated at account creation. This address corresponds to a different PrivKey than the Tendermint PrivKey which is responsible for signing consensus messages. Validators thus do not have to sign governance transactions with the sensitive Tendermint PrivKey.

Software Upgrades

If proposals are of type SoftwareUpgradeProposal, then nodes need to upgrade their software to the new version that was voted. This process is divided into two steps:


After a SoftwareUpgradeProposal is accepted, validators are expected to download and install the new version of the software while continuing to run the previous version. Once a validator has downloaded and installed the upgrade, it will start signaling to the network that it is ready to switch by including the proposal's proposalID in its precommits.(Note: Confirmation that we want it in the precommit?)
Note: There is only one signal slot per precommit. If several SoftwareUpgradeProposals are accepted in a short timeframe, a pipeline will form and they will be implemented one after the other in the order that they were accepted.


Once a block contains more than 2/3rd precommits where a common SoftwareUpgradeProposal is signaled, all the nodes (including validator nodes, non-validating full nodes and light-nodes) are expected to switch to the new version of the software.
More information can be found in the Cosmos SDK documentation.