Governance

Governance determines whether a system can operate sustainably over the long term. In CICADA Finance’s design, governance is not limited to DAO voting. It is a comprehensive set of management and constraint mechanisms that span the entire asset lifecycle—from onboarding and risk monitoring, to yield settlement and distribution, and to security and compliance controls.

CICADA Finance governance is designed to ensure that the platform does not rely on a small number of “hit assets” or short-term incentive cycles, but can continuously onboard new assets, retain long-term capital participation, and operate across different market regimes with verifiable rules and transparent execution.

Governance Framework Overview

CICADA Finance governance is structured around three pillars:

• Asset Governance: standards, monitoring, and control processes for assets and strategy providers

• Yield Governance: auditable yield sourcing, aggregation, and distribution tied to realised performance

• Security and Compliance Governance: permissioning, custody separation, audits, and monitoring for long-term institutional-grade participation

Together, these mechanisms form a governance system that is both community-influenceable (via governance participation) and protocol-enforced (via predefined rules and onchain execution).

Asset Governance

Asset governance ensures that no single asset, strategy, or service provider can introduce uncontrollable risk to the overall system. It includes, but is not limited to:

Asset Entry Standards and Ongoing Evaluation

CICADA Finance may apply structured onboarding criteria across asset categories (e.g., QuantFi, LoanFi, SupplyChainFi, CorporateFi, ComputeFi). Typical governance-controlled dimensions include:

• eligibility requirements and onboarding due diligence scope

• settlement characteristics and operational feasibility

• transparency and reporting expectations

• risk model requirements and monitoring signals

Performance and Risk Monitoring

Once onboarded, assets and strategies are subject to ongoing evaluation. Governance processes may define:

• key yield performance indicators and variance thresholds

• risk indicators (e.g., liquidity stress, drawdowns, dependency risks)

• reporting cadence and disclosure standards (where applicable)

Abnormal Handling and Adjustment Mechanisms

CICADA Finance governance may define escalation and response actions for abnormal situations, such as:

• temporary parameter adjustments

• distribution pauses under defined conditions

• changes to onboarding status, caps, or exposure limits

• structured offboarding or migration processes, where applicable

The objective is to protect system integrity and ensure asset-level issues do not propagate into systemic risk.

Yield Governance

Yield governance ensures that yield distribution is transparent, auditable, and tied to actual asset performance—rather than manual intervention or black-box discretion.

Clear Yield Sources and Allocation Paths

CICADA Finance aims to provide clear definitions of:

• yield sources (strategy returns, RWA cash flows, ecosystem overlays where applicable)

• how yields are aggregated and allocated

• how operational costs and protocol fees (if any) are applied prior to distribution

Protocolized Distribution, Minimising Human Intervention

CICADA Finance emphasises protocol-based settlement and distribution mechanisms, with execution performed via smart contracts wherever feasible. This design aims to:

• reduce discretionary interventions

• improve predictability and verifiability

• allow users and partners to audit distribution logic onchain

Performance-Linked Distribution Principles

A core governance principle is that yield distribution should be linked to realised outcomes. Parameters governing distribution logic, suspension conditions, and catch-up mechanisms (where applicable) should be disclosed and controlled through predefined rules.

Security and Compliance Governance

CICADA Finance governance also includes security and compliance-oriented controls required for long-term system operation, especially where institutional-grade assets and capital are involved.Key components include:

Compliant Custody and Asset Segregation

Where offchain or real-world components exist, CICADA Finance integrates compliant custody systems with structural separation between:

• protocol-owned onchain assets (e.g., liquidity modules, distribution pools)

• custodied offchain assets and strategy capital

This separation is designed to reduce cross-domain contamination risk and strengthen operational robustness.

Multi-Signature and Permission Controls

Security-critical administrative functions (e.g., parameter updates, upgrades, operational controls) may be governed through multi-signature and role-based permission systems to prevent unilateral execution and reduce governance capture risk.

Third-Party Audits and Ongoing Monitoring

CICADA Finance governance supports the use of third-party audits and ongoing monitoring programs to strengthen contract security and operational integrity, and to provide a clearer trust foundation for users and partners.

Governance Participation and Decision Scope

CICADA Finance implements a decentralized governance framework intended to empower holders of rtCIC tokens to influence the protocol’s strategic direction. Governance participation may include:

• protocol upgrades and mechanism improvements

• parameter optimization (e.g., yield distribution settings, liquidity reserves, risk thresholds)

• approval and lifecycle decisions for new assets (RYA / RWA)

• strategic proposals affecting platform development priorities

The governance process is designed to promote transparency and inclusivity by enabling proposals and voting within a DAO-aligned structure, while ensuring that security-critical execution remains protected by robust permissioning and multi-signature controls.

Long-Term Significance of CICADA Finance Governance

Through the combined layers of connection, transformation, and governance, CICADA Finance is designed as infrastructure—not a single-asset product.

• Connect: bridge professional asset originators and onchain capital with standardized processes

• Transform: convert non-standard assets and strategies into composable onchain yield units

• Govern: enforce auditable lifecycle management, risk monitoring, and transparent distribution

This governance structure enables CICADA Finance to continuously onboard assets, retain long-term capital participation, and maintain stable operations across market cycles—forming a durable foundation that differentiates it from single DeFi products or single RWA projects.