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@@ -1,2 +1,56 @@
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# Concepts
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# Concepts
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+The governance process is divided in a few steps that are outlined below:
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+
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+* **Propose:** a proposal is submitted to the blockchain.
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+* **Vote:** governance token holdens can vote on the proposal.
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+* **Exec:** if the proposal passes within the time limit then the proposal is
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+ executed.
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+
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+## Propose
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+
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+To prevent spam, proposals must be submitted by holders with a certain number
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+of governance tokens. Several members of the DAO can add inputs separately to
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+a proposal before it is posted on chain so that their combined inputs meet the
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+proposal governance token limit.
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+
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+Once proposals are posted on chain, they are immediately active.
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+
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+### Proposal States
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+
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+* *Active*: the proposal is open to voting.
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+* *Expired*: the proposal passed its duration and can no longer be voted on.
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+* *Accepted*: the proposal gained sufficient votes but is not yet executed.
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+* *Executed*: the proposal was accepted and has been finalized on chain.
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+
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+## Vote
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+
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+### Participants
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+
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+*Participants* are users that have the right to vote on proposals. Participants
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+are holders of governance tokens specified in the DAO.
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+
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+Note that only participants from before the proposal is submitted on chain
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+are eligible to vote. That means receivers of governance tokens after a proposal is
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+submitted will *not* be eligible to vote.
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+
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+There are currently two voting options:
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+
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+* Yes
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+* No
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+
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+### Voting Period
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+
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+Once a proposal passes its duration, which is measured in days, participants can
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+no longer vote on the proposal, and it is considered *expired*.
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+
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+### Quorum
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+
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+Quorum is defined as the minimum absolute number of governance tokens voting
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+yes required for a proposal to become accepted.
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+
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+### Approval Ratio
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+
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+The approval ratio is defined as the minimum proportion of yes votes for the
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+proposal to be accepted.
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+
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