Tezos Bakers, You Are In Charge! An Overview of Etherlink's Decentralized Governance

TL;DR We propose a decentralized governance framework for Etherlink’s Layer 2 blockchain inspired by Tezos Layer 1 governance, ensuring fairness and transparency. Community consensus is at the heart of this framework, which empowers Tezos bakers to govern Etherlink’s kernel upgrades and sequencer operators. This post outlines the proposed governance mechanisms and instructions for participation.

The Etherlink Layer 2 Rollup comprises a number of governance mechanisms that are inspired from and built upon Tezos Layer 1 governance. Through this framework, Etherlink’s governance and upgrades will be transparent, agile, efficient, and community-driven.

We have incorporated the best practices and lessons learned from Tezos governance, which has a track record of 15 successful protocol upgrades, all endorsed by a supermajority of Tezos bakers.

To ensure fair and secure distribution of control over Etherlink’s kernel, sequencer, and security, the team proposes the following governance mechanisms:

Kernel Governance

Kernel governance for Etherlink is established and maintained via a Tezos Layer 1 smart contract, ensuring a decentralized approach to managing upgrades. Once deployed on Tezos Mainnet, this smart contract empowers bakers to actively engage in governance by voting on and proposing kernel upgrades.

We are proud that the community will be in control of this decision-making process and we encourage all active bakers to participate in shaping Etherlink’s evolution.

The weight of each vote is determined by the voting power associated with the participating baker’s account. Should a proposal garner sufficient support, the Etherlink rollup kernel will seamlessly upgrade on-chain, reflecting the result of the governance process without the need for manual intervention.

Stages of Etherlink Kernel Governance

The stages for Etherlink kernel governance closely resemble the governance model of Tezos but with a streamlined voting process. It consists of three periods: a Proposal and a Promotion period, supervised by the governance contract, and a Cooldown period, enforced by the Etherlink kernel.

Proposal Period

During this period, proposals are submitted and upvoted. The winning proposal is determined by the highest total voting power. Throughout the Proposal Period, which spans one week, multiple kernel proposals can be submitted. At the end of the period, the proposal that receives the most backing will prevail – when the aggregated voting power of all upvotes exceeds or equals a parameterized percentage of the total voting power. If no proposal gathers adequate support, a new Proposal period begins.

Promotion Period

Once a proposal moves to the Promotion Period, Tezos bakers determine whether to adopt the proposed kernel by casting their votes. This period ensures substantial support for the selected kernel, necessitating both a quorum and a super-majority of votes in favor (we will share these threshold values soon). If either of these parameters are not met, the network reverts to the Proposal Period.

Cooldown Period

The Cooldown Period is a delay before activating the chosen kernel, which lasts about 24 hours. This period happens kernel-side, and it is not controlled by the governance contract. Its purpose is to give the Etherlink community time to make final adjustments to code and infrastructure impacted by the upgrade, before activating the chosen kernel. Upon the period’s conclusion, the new kernel is activated. Subsequent transactions submitted to Etherlink are processed according to the business logic of the newly activated kernel.

Due to the Cooldown Period being enforced by the currently running kernel, it might overlap with the Proposal period for a successor kernel.

Alignment with Layer 1 Governance

Etherlink’s Proposal and Promotion periods require careful synchronization with Layer 1 governance:

  • Proposal and Promotion Periods need to be circumscribed within a Layer 1 governance period – they cannot overlap with two different Layer 1 governance periods. This is to ensure that the delegate’s voting power is the same throughout the period.
  • The beginning of any Proposal or Promotion Period must be aligned with the beginning of a Layer 1 governance period.

Security Governance

Etherlink’s Security Governance mechanism prioritizes swift responses to incidents while safeguarding community consensus. The kernel security governance contract mirrors the conventional mechanism but with higher quorum and supermajority requirements, alongside shorter timeframes. This strategic adjustment ensures expedited resolution of urgent issues while upholding integrity by demanding higher quorum to prevent potential nefarious actions.

Sequencer Committee Governance

In this contract, Tezos bakers propose and participate in the selection process for Etherlink’s Sequencer Committee. Sequencer operators play an important role in Etherlink’s architecture, enabling very low latency and providing a comfortable end-user experience.

With Etherlink being a community rollup, it is only fitting that bakers determine who oversees the operation of Etherlink’s sequencer nodes, in the same way they are entrusted with Tezos Layer 1 governance.

Similar to the kernel and security governance models, the voting process plays out over Proposal and Promotion periods. In contrast to kernel governance, where bakers propose and upvote changes to the kernel, this mechanism involves bakers proposing and participating in the operator selection process.

Ensuring a Strong Majority

To ensure that decisions accurately reflect the majority consensus of the Etherlink community, all three governance contracts mentioned are designed with the same robust safeguards. Similarly to Tezos’ governance, the mechanism proposed for Etherlink promotes transparency and fairness in decision-making.

Through this on-chain governance framework, Etherlink can evolve in accordance with community needs and priorities. However, to achieve this vision, we need your help.

Join Us in Shaping Etherlink’s Future

Governance processes like this work best when all stakeholders are involved, both in reviewing and voting for the changes. Tezos bakers play a central role in governing Etherlink’s future direction.

Preliminary versions of these governance smart contracts are already being deployed on Ghostnet and tested with Etherlink’s testnet. For instance, we have recently used this contract to propose and promote Etherlink weekly kernel upgrades.

To make the envisioned mechanism as inclusive and successful as Layer 1, we would like to hear your thoughts on it.


How long is the promotion period? Also 1 week?


Will I need to come up with 10,000 more XTZ?

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Interesting… Thank you Nomadic Labs.

  • This period seems similar to the Adoption Period of L1 Governance.
    Why not name it the same way?
  • 24 hours? This looks a bit short to me.

It’s true that 24h is a short time frame to react. How was it defined?
I’m not questionning the need for such a cooldown period though, I think it’s very useful.

1 Like

Yes, same period for the proposal and promotion. Only the cooldown period is different for now.


Thankfully no! The bond is only required if you want to participate as a rollup node and post commitments (that can be refuted, hence the need to deposit assets that can be slashed).

Participating in Etherlink’s governance is only a matter of a regular transaction to a smart contract.

  • Indeed, “Adoption” would probably better reflect the intent of this period. The name can still change.
  • Yes, 24 hours is not a long delay, but it’s only for the Beta rollout and will probably change afterwards depending on community feedback.

EDIT: actually, we consider extending it to 30 days for instance, so that participants have time to exit the rollup if the new version does not suit their needs anymore.