veFIL Phase I Governance — Case Study

Background

Filecoin's Mining Reserve is a pool of FIL set aside to fund public-goods programs (ProPGF and RetroPGF). Today, allocation decisions within these programs are made by a curated set of badgeholders — trusted community members who signal which projects deserve funding. veFIL (vote-escrow FIL) is a proposed governance token issued to FIL holders who voluntarily lock their FIL via approved staking partners. The longer you lock, the more veFIL you receive. veFIL is non-transferable: it cannot be bought or sold, only earned through commitment. This Phase I pilot tests whether veFIL signals, combined with existing badgeholder judgment, produce better funding outcomes than badgeholders alone.

The Mechanism

How veFIL Works

The pilot is intentionally narrow. Staking partners continue to offer staking and APY exactly as before. veFIL is layered on top as a non-transferable governance weight — no changes to yield, no protocol parameter risk.

Phase I Design Assumptions

Off-chain signaling in Phase I keeps risk low before any on-chain consequences are introduced.

Mining Reserve funds PGF — veFIL holders have skin in the game because their locked FIL backs the treasury.

APYs incentivise locking — staking rewards from partners make voluntary lock-up attractive without governance mandating it.

Security layer persists — badgeholders and multi-sig controls remain in place for all disbursements.

Partner integration is operational — platforms such as GLIF can issue veFIL against locked FIL.

veFIL is non-transferable — prevents vote-market manipulation and maintains long-term commitment as the signal.

Quorum is achievable — based on a 100M+ FIL locked target, 5% participation for budget votes is realistic.

Governance Hub is ready — a front-end for voting must be built and tested before launch.

60/40 weighting accepted — badgeholders carry 60% and veFIL holders 40% in the consensus model.

Scope limited to PGF only — no protocol-parameter governance is in scope for Phase I.

Governance Scope

Three Action Types

Phase I deliberately limits the voting surface to public-goods funding decisions. Each action type has distinct thresholds, quorum requirements, and cadence.

Budget

Annual Public Goods Budget

What should be the Filecoin Annual Public Goods Budget? How should it be divided between ProPGF and RetroPGF?

Input Proposed budget

Output Approved budget

Threshold >50% participating veFIL

Quorum 5% outstanding veFIL

Cadence Annually

Disbursement

Funding Disbursement

Is the proposed tranche of funding in line with the annual budget and approved for disbursement to ProPGF and RetroPGF programs?

Input Amount & wallet addresses

Output Funds moved to program treasuries

Threshold >50% participating veFIL

Quorum 2% outstanding veFIL

Cadence Quarterly

Pulse Check

Community Pulse Check

Are veFIL holders in favour or against a proposed non-binding poll question relevant to the Filecoin ecosystem?

Input Yes/no poll question

Output % in favour or opposed

Threshold None (advisory only)

Quorum TBD

Cadence Ongoing, as needed

Voting & Consensus

How Signals Are Collected and Combined

Badgeholders and veFIL holders vote independently. Their signals are then mechanically combined using a preset weighted formula — no discretionary override at any stage.

Badgeholder Process

1

Round OpensProjects submit applications for funding
2

Review PeriodBadgeholders evaluate projects against criteria
3

Allocation SubmittedEach badgeholder distributes points across projects
4

Signal AggregatedIndividual allocations weighted by badgeholder count
5

Combined with veFILBadgeholder signal carries 60% in final allocation

veFIL Holder Process

1

FIL StakedDeposit FIL with an approved staking partner
2

Lock Duration SelectedMinimum 6 months, maximum 1 year
3

veFIL IssuedBalance captured at the block when voting opens
4

Allocate on Gov HubDistribute veFIL across eligible projects (final, no changes)
5

Signal AggregatedveFIL-weighted allocation carries 40% in final

60/40 Preset Weighted Aggregation

Both signals are published simultaneously after voting closes. Divergences are surfaced clearly in the results — this is intentional learning data for Phase I.

60%

Badgeholder Signal

40%

veFIL Signal

100%

Final Allocation

Worked example
Badgeholders allocate 40% to Project A. veFIL holders allocate 25% to Project A. Final = (0.6 × 40%) + (0.4 × 25%) = 34% to Project A

Why 60/40 for Phase I

Participation-robust: If early veFIL participation is low, dynamic weighting would either over-amplify a small voter base or render their signal irrelevant. Fixed weights avoid both failure modes.
Conservative by design: Badgeholder influence dominates while veFIL signal quality is evaluated. Phase I is about learning whether capital-weighted signals produce coherent outcomes.
No tie-break complexity: The formula applies mechanically with no discretionary override, making outcomes fully predictable and auditable.
Tunable: Weights are a single parameter. If Phase I data supports a different split, it can be adjusted for Phase II without redesigning the system.

Open Questions

Open Research Questions Explored

These items require further definition before Phase I can move to implementation. They are listed here as the active design surface, not as blockers.

veFIL Multiplier How is veFIL modified by lock duration? Economic simulations are required to calibrate the curve.

Snapshot Mechanism How and when is veFIL balance captured for a given vote? Block-level precision needs specification.

Adaptive Quorum After Phase I produces participation data, should quorum shift to a rolling-average model with a 2% floor and 10% ceiling?

On-Chain Representation Is veFIL a token, or is it tracked off-chain by staking partners? Implications differ for auditability and composability.

Delegation Can veFIL be partially or fully delegated in Phase I? If so, what are the constraints?

Storage Provider Collateral Will bonded collateral from storage providers be eligible for veFIL voting? If so, does it map to the owner or beneficiary address?

Budget Committee Should a dedicated committee be created with authority to submit and oversee the annual budget, with multi-sig oversight on disbursements?

Requirements status table: lock-up simulations (To Do), voting power decay (To Determine), staking partner agreements (In Progress), treasury simulations (To Do), SP collateral treatment (To Determine), APY mechanics (Out of Scope)