# Governance

### How will this be managed?

AI Trader Collective employs an experimental and agile governance approach (opens new window) to relentlessly iterate to build a system that will stand the test of time. Initially, the Collective's digital democratic governance model will be governed by token houses.

### Token House <a href="#token-house" id="token-house"></a>

Governance of the AI Trader Collective began with the launch of the AI token and the Token House. AI Trader was distributed to hundreds of thousands of addresses that engaged in positive-sum, community-oriented behavior with Airdrop You can read more about the distribution criteria here.

As Token House members, AIT holders are responsible for submitting, deliberating, and voting on various types of governance proposals. In carrying out these functions, AIT holders may either vote directly, or delegate their AI Trader voting power to an eligible third party.

The Token House votes on these proposal types:

* Governance fund grants
* Protocol upgrades
* Inflation adjustment
* Director removal
* Treasury appropriations
* Rights protection

The AI Trader on-chain governance is a process by which the AI Trader community members can create and vote on proposals that minimize the cost of blockchain upgrades. The following describes the scope of these proposals for the AI Trader on-chain governance:

* Changes to the blockchain parameters, for example, the epoch duration, and the minimum required and maximum allowed validator stake.
* Changes to the core blockchain code.
* Upgrades to the AI Trader Framework modules for fixing bugs or for adding or enhancing the AI Trader blockchain functionality.
* Deploying new framework modules (at the address `0x1` - `0xa`).

If you are thinking about creating a DAO on AI Trader, you can refer to AI Trader`_governance`'s usage of the `voting` module as an example. In AI Trader`_governance`, we rely on the `voting` module to create, vote on, and resolve a proposal.

* AI Trader`_governance::create_proposal` calls `voting::create_proposal` to create a proposal on-chain, when an off-chain AIP acquires sufficient importance.
* AI Trader`_governance::vote` calls `voting::vote` to record the vote on a proposal on-chain;
* AI Trader`_governance::resolve` can be called by anyone. It calls `voting::resolve` to resolve the proposal on-chain.