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 the 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 sdk.Msg array, which is executed automatically if the proposal passes. 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 does not perform a full validity check.


To prevent spam, proposals must be submitted with a deposit in the cryptocurrency 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 33.4% of the votes, 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:

  • The participant bonded or unbonded CANTO to said validator after the proposal entered voting period.

  • The participant became a validator after the proposal entered voting period.

This does not prevent participants from voting with CANTO bonded to other validators. For example, if a participant bonds some CANTO to Validator A before a proposal entered voting period, and bonds more CANTO to Validator B after a proposal entered voting period, only the vote bonded to 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 participants can choose from when casting their votes.

The initial option set includes the following options:

  • Yes

  • No

  • NoWithVeto

  • Abstain

NoWithVeto counts as No but also adds a Veto vote. The Abstain option allows voters to signal that they do not intend to vote for or against the proposal but will 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 33.4%.


Threshold is the minimum proportion of Yes votes to total votes (excluding Abstain votes) required for a proposal to be accepted.

Initially, the threshold is set at 50%. A possibility to veto exists if more than 33.4% of all votes are NoWithVeto votes. Both of these values are derived from the TallyParams on-chain parameter, which is modifiable by governance. This means that proposals are accepted if:

  • There exist bonded tokens.

  • Quorum has been achieved.

  • The proportion of Abstain votes is inferior to 100%, i.e. at least one Yes, No, or NoWithVeto vote was submitted one.

  • The proportion of NoWithVeto votes to total votes (includingAbstain votes) is inferior to 33.4%.

  • The threshold is met.


If a delegator does not vote, they will inherit their validator's vote.

  • If a delegator votes before their validator, they will not inherit their validator's vote.

  • If a delegator votes after thei validator, they will override their validator's vote with their 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 66.6% of the total voting power to pass before the end of the voting period. Because as little as 33.4% + 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 for. This process is divided into two steps, signal and switch.


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: 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 66.6% 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.

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