🏛️Retaining Governance

As mentioned in the Protocol Mechanics section, you can keep the governance rights of your token when depositing into Fyde. Too often, protocols and DAOs end up sacrificing governance rights in an attempt to diversify, access yield, or to interact with DeFi in general. Unfortunately, this can open oneself up to governance attacks, resulting in things like dissolution, draining of wallets, etc. Through Fyde, you can interact with and experience the benefits of DeFi without having to lose all of your governance rights in the process.

If you wish to keep governance rights on your deposited tokens, you simply need to select the "Retain governance" toggle when depositing (shown below).

The proportional value of $TRSY is still minted, however, it is automatically deposited into a custodial contract— issuing “governance TRSY” ($gTRSY) instead. This enables you to retain the governance power of the deposited tokens by giving you the ability to choose a wallet address or a Snapshot space to delegate to.

To do so, you simply go to the Governance tab and choose which token to redelegate. You then choose whether you'd like to redelegate to an ERC-20 wallet or a Snapshot space, input the wallet address, and click "Delegate" (shown below).

It's important to keep in mind that the amount of governance rights you have will fluctuate based on the relative exchange rate of your deposited token and $TRSY. For example, if your token underperforms $TRSY by 20% then your governance rights increase by 20% given the new exchange rate. And conversely, if your token has outperformed by 20% then your governance rights decrease by 20%.

While this may seem counterintuitive at first, you can think of this as a "trade". If you were to sell your token for $ETH, $ETH outperformed by 20%, and you bought back your original token, then your governance rights would have increased. On the other hand, if your token outperformed $ETH, then your governance rights would have decreased once you bought back your tokens. The key difference is that through Fyde, you still get to keep your governance rights during the course of this trade.

Because of this fluctuation, you will need to rebalance your governance rights whenever you vote to ensure that you have the latest counter.

If you forget to rebalance while your governance allocation is overweight, the protocol may rebalance for you if it needs the tokens to perform pool operations.