# Governance

## Why are Priviledged Functions Needed?

The [USDN protocol](https://docs.smardex.io/ultimate-synthetic-delta-neutral/glossary#usdn-protocol) is a complex system. We want to be able to patch any vulnerability found after deployment or simply update settings to better accommodate users once we have data on the usage of the protocol.

There are also great strides made in the blockchain industry every day. Having the ability to update the protocol with any potential improvement allows us to adapt to new challenges.

With great power comes great responsibility. Therefore, to ensure the safety of the protocol, multi-signature wallets are used to prevent access to privileged functions by malicious actors. Additionally, every setting has maximum values that cannot be exceeded, to avoid mistakes or unsafe parameters.

<mark style="color:green;">**100% OF GOVERNANCE PRIVILEGES WILL BE TRANSFERRED TO A DAO.**</mark>

## What can Privileged Functions Do?

### 1. USDN Protocol

* Change the [Imbalance Limits](https://docs.smardex.io/ultimate-synthetic-delta-neutral/the-usdn-protocol/protocol-balance/imbalance-protections)
* Change the [Minimum Position Size](https://docs.smardex.io/ultimate-synthetic-delta-neutral/long-side/liquidations-and-minimum-position#minimum-position-size)
* Change the [leverage](https://docs.smardex.io/ultimate-synthetic-delta-neutral/glossary#leverage) limits
* Change the amount required as a [Security Deposit](https://docs.smardex.io/ultimate-synthetic-delta-neutral/faq#what-is-the-purpose-of-the-security-deposit)
* Change the [Liquidation Penalty](https://docs.smardex.io/ultimate-synthetic-delta-neutral/the-usdn-protocol/fees/liquidation-fee)
* Change the number of ticks that can be liquidated in one transaction
* Change the [funding settings](https://docs.smardex.io/ultimate-synthetic-delta-neutral/the-usdn-protocol/inside-the-protocol/3.-applying-the-funding-rate)
* Change the [funding fee](https://docs.smardex.io/ultimate-synthetic-delta-neutral/fees/protocol-fees#fee-on-the-funding-rate)
* Change the [Long Position fee](https://docs.smardex.io/ultimate-synthetic-delta-neutral/fees/protocol-fees#fee-on-actions)
* Change the [Vault deposit fee](https://docs.smardex.io/ultimate-synthetic-delta-neutral/fees/protocol-fees#fee-on-actions)
* Change the [SDEX burn fee](https://docs.smardex.io/ultimate-synthetic-delta-neutral/fees/protocol-fees#fee-on-usdn-minting)
* Change the reward given when burning SDEX fees
* Change the address of the middleware managing [Oracle price validation](#id-3.-oracles)
* Change the length of the [exclusivity period ](https://docs.smardex.io/ultimate-synthetic-delta-neutral/inside-the-protocol/1.-providing-a-price#recovery-of-the-security-deposit)for initiate validation
* Change the address of the middleware managing [Liquidator Rewards ](https://docs.smardex.io/ultimate-synthetic-delta-neutral/long-side/liquidations-and-minimum-position#liquidations)calculation
* Change the address of the [Dip Accumulator](https://docs.smardex.io/ultimate-synthetic-delta-neutral/the-usdn-protocol/long-side/dip-accumulator)
* Change the bonus given to the [Dip Accumulator ](https://docs.smardex.io/ultimate-synthetic-delta-neutral/the-usdn-protocol/long-side/dip-accumulator)on trigger
* Change the address of the fee collector
* Upgrade the Protocol's [proxy ](https://medium.com/@social_42205/proxy-contracts-in-solidity-f6f5ffe999bd)implementation
* Unblock a stuck pending action
* Pause/Unpause the protocol
* Change the price threshold at which the [USDN token](https://docs.smardex.io/ultimate-synthetic-delta-neutral/glossary#the-usdn-token) will [rebase](https://docs.smardex.io/ultimate-synthetic-delta-neutral/glossary#rebase), as well as the target price

### 2. USDN Token

* Change the callback to execute after a [rebase](https://docs.smardex.io/ultimate-synthetic-delta-neutral/the-usdn-protocol/vault-side/rebase-mechanism)

## 3. Oracles

* Change the time to wait before an action can be validated
* Change the amount of time a Chainlink price is considered valid
* Change the amount of time a Pyth price is considered recent
* Change the confidence ratio
* Change the amount of time an action can be validated using Pyth
* Withdraw any Ether stuck in the contract
  * This smart contract is not meant to hold any asset. Any Ether sent to this contract by mistake can be recovered.

## 4. Liquidation Rewards Manager

* Change the parameters to calculate the rewards given to the user that liquidates positions.

## 5. Dip Accumulator

* Change the maximum leverage of the position
* Change the minimum amount that can be deposited