The iFi DEX offers an unprecedented level of configurability—including features like modifying the fee tiers of an active pool, a capability not possible in a Uniswap v3-based DEX.

Beyond configurability, the iFi DEX is also upgradeable, allowing for functionality expansions and bug fixes. Typically, such admin functions are managed by multisigs controlled by a handful of voters.

For the iFi DEX, we’ve taken a different approach. We’ve built a native governance bridge that makes all admin functions fully accessible through on-chain governance.

How Does Althea L1 Governance Work?

Althea L1 uses the Cosmos-SDK governance framework, which integrates governance with delegated proof-of-stake (DPOS) voting and staking. In other words, anyone who has staked/delegated tokens to a validator can vote on governance proposals, including proposals that are critical to DEX maintenance, management and growth.

This means that multitudes of stakers can now actively participate in iFi DEX governance decisions! This is a great improvement, but also one that presents a new problem: Enabling stakeholders to truly understand the proposals they are voting on.

Easily Readable Custom Proposal Types for iFi DEX Governance

The ability to see what bytecode a proposal passes to the iFi DEX does not make it inherently transparent, for not all users will be able to correctly interpret what they are looking at. To that end, we have integrated easily readable proposal types for the most important DEX functions.

High risk proposals, such as pausing DEX operation and adding or removing addresses that can change specific parameters, now have their own easily readable proposal types. Initially less critical functions, like simple pool fee changes, will still use standard proposal types, but can be upgraded to easily readable proposal functions in the future.

When a proposal passes on-chain natively, it calls the iFi DEX and applies the changes directly and automatically. There is no second step, or trusted party, required to carry out the voted upon changes.

What Are These Configuration Options, Anyway?

The iFi DEX is a fork of Ambient DEX, with several modifications. One of Ambient’s best properties is its stupendous configurability. For example, unlike Uniswap, it is possible to change many properties of pools after creation and overlay Uniswap v2 and v3 style liquidity positions in a single pool. This means that governance can fine-tune fee tiers or tick sizes in active pools, eliminating the painful need to create new pools and migrate liquidity between them to accommodate changing needs over the lifetime of a pool.

Conclusion

Decentralized governance is essential to making a DEX “canonical.” Since the iFi DEX is part of the chain itself, it needs to be held to the same governance structure and standards as Althea L1.

In addition to this alignment of standards and principles, distributed governance enables more advanced configurability options, which can be used with confidence by all stakers, eliminating reliance on a small, centralized group of decision makers.