Conflict of Interest Mitigation

Conflict of interest mitigation involves implementing policies and technical safeguards to prevent delegates or governance participants from prioritizing personal gain over the health of the protocol. This includes mandatory disclosure of financial interests, the use of time-locks for sensitive changes, and the creation of oversight committees to monitor governance activity.

In the context of derivatives, this is particularly important, as changes to margin requirements or collateral types can directly impact the profitability of specific trading strategies or whale positions. By enforcing transparency and requiring alignment between the delegate's incentives and the protocol's success, these mitigation strategies help preserve the integrity of the decentralized system.

Without such safeguards, governance can quickly become a tool for self-dealing and systemic risk creation.