Governance Risk

◉Canonical

---

Purpose

This document defines key governance risk categories for Axodus.

Scope

It covers governance, treasury, smart contract, trading, tokenomics, reputation, operational, legal, and compliance risks that governance must consider.

Risk Classes

• Governance risk: capture, unclear authority, weak voting process, undocumented execution.
• Treasury risk: capital loss, concentration, liquidity shortfall, counterparty exposure, protocol failure.
• Smart contract risk: contract bugs, upgrade admin risk, malicious plugins, permission errors.
• Trading risk: market volatility, liquidation, exchange failure, API key misuse, strategy drawdown.
• Tokenomics risk: unsustainable rewards, unclear locked rewards, inflation pressure, misleading utility claims.
• Reputation risk: exaggerated claims, unverified partnerships, unverified audits, poor disclosure.
• Operational risk: failed execution, missing monitoring, poor key management, dependency failure.
• Legal or compliance risk: regulated activity uncertainty, jurisdictional uncertainty, investor misrepresentation, consumer protection issues.

Attack Vectors

• Governance capture
• Proposal spam
• Malicious plugin
• Treasury drain
• Vague approval
• Social engineering
• AI output abuse
• Registry spoofing

Review Requirements

Low-risk actions require basic owner review and documentation clarity. Medium-risk actions require responsible nucleus review, risk notes, and governance visibility when policy-related. High-risk actions require ACS analysis, human review, governance review, risk disclosure, execution receipt, and accountability output if material. Critical actions require emergency or high-authority review, security review, treasury or Boardroom review, public post-action report, and rollback or containment plan.

Guardrails

• High-value treasury actions require layered review.
• Governance plugins require security review.
• Financial claims require careful language.
• Accountability reports are required for material actions.
• ACS outputs must be reviewed.
• Execution payloads should match approved scope.
• Product access should follow registry or governance state.
• Emergency actions need post-action accountability.

Risk Considerations

Governance must not document or operate financial systems through vague promises. It must document objectives, risk, execution controls, reporting obligations, and accountability records.