Distribution of Interests

Since governance rights are represented by digital assets, their distribution across various stakeholder groups such as investors, the management team, network validators, and end users is critical to aligning interests for the collective benefit of the Zetrix blockchain.

To achieve effective and equitable governance outcomes, a discretionary distribution policy is necessary. This helps prevent scenarios where:

• Concentrated token holdings create undue trading pressure that distorts governance influence.

• Valuable perspectives are excluded from the decision-making process due to insufficient token holdings.

One effective mechanism is the introduction of vesting cliffs, which serve to filter out short-term speculators interested solely in profiting from digital asset appreciation. Under this model, token holders must retain their assets for a minimum duration or meet certain time , performance , or milestone- based criteria before becoming eligible to vote. This ensures that voting rights are reserved for participants genuinely committed to the long-term success of the Zetrix ecosystem.

Conversely, to discourage passive concentration of influence, the model may incorporate reverse vesting. In this case, holders with significant token balances who remain inactive over extended periods may have their voting rights reduced or forfeited, thereby maintaining an active and representative governance base.

In parallel to stakeholder governance, members of the global, decentralized developer community who actively contribute to the security and progress of the Zetrix blockchain through activities such as debugging, smart contract auditing, ethical hacking, community education, and other bountied tasks may be granted governance rights or digital assets under a linear vesting schedule. This earn-as-you-go incentive model is designed to attract and retain committed contributors, with allocations sourced from the Community Building reserve.

The purpose of this approach is to diffuse concentrated voting power held by large token holders and empower minority stakeholders, fostering a more equitable and balanced governance structure.

Looking ahead, as the Zetrix ecosystem matures into a vibrant and self-sustaining network, advanced governance mechanisms may be explored, such as:

• Quadratic voting for public goods, as advocated by Ethereum co-founder Vitalik Buterin, which amplifies the influence of smaller holders;

• Convertible allocations, where voting rights are decoupled from token holdings to ensure broader and more democratic participation.

It is also important to recognize that while consensus occurs on-chain, governance will remain a hybrid process, encompassing both on-chain and off-chain components. This hybrid model acknowledges the practical limitations of purely on-chain governance while leveraging the strengths of transparent, community-driven dialogue.

Ultimately, effective decentralized governance depends not only on system design but also on active participation and quorum. In practice, this makes shared governance—a structured blend of decentralization, delegation, and practical coordination—the most accurate and viable model for Zetrix at this stage of its evolution.