# Veto System

Nuon uses a veto system similar to Frankencoin’s, where a minority quorum of voters can veto a vault proposal. A veto-based voting system confers several advantages over a traditional majority vote method. It mitigates the ability to acquire a stake large enough to force through malicious proposals by requiring broader consensus for changes, as it is much easier for actors to block proposals than a majority vote system. It is more efficient while also encouraging collaboration, fostering stability, and ensuring only well-considered proposals are implemented.

Proposals are made on-chain by users, who suggest a token contract address and provide a veto bounty for their submission. The veto bounty acts as an anti-spam mechanism to prevent the submission of frivolous or malicious proposals. This mechanism ensures that users have a financial stake in the quality and validity of their proposals.

Once a proposal is submitted, there is a predefined veto period during which other users can challenge the proposal. 2% of the total amount of staked MaxCap is required to veto a proposal. MaxCap stakers who disagree with the proposal can submit a veto by staking a higher bounty than the original proposer.


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