> For the complete documentation index, see [llms.txt](https://docs.usefarlight.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.usefarlight.com/transparency/governance.md).

# Parameter changes

How a Farlight parameter is proposed, published, delayed and applied, and what governance can never reach.

The core contracts have no upgrade path. What governance can do is adjust parameters, and every adjustment travels the same public route through a timelock before it lands.

## What governance can and cannot reach

| Reachable through governance                                  | Never reachable                                 |
| ------------------------------------------------------------- | ----------------------------------------------- |
| Tier LTVs, haircuts and caps                                  | Upgrading or replacing core contract code       |
| Oracle adapters, staleness bounds and move caps               | Moving escrowed collateral or lender principal  |
| Auction curves and refinance parameters                       | Pausing repayment or post-repayment withdrawal  |
| Fee rates                                                     | Altering the terms of a live loan retroactively |
| Adding or removing attestation issuers and whitelisted vaults | Minting $FARLIGHT (supply is fixed)             |
| Pausing new loans and liquidations in an emergency            | Acting before the timelock delay has elapsed    |

## The procedure

1. **Draft.** A written proposal sets out the change and its rationale, backed where relevant by backtesting or by data taken from Telemetry, the public risk page.
2. **Publish.** The proposal is posted to the governance log: the parameter, its current value, the proposed value and the reasoning. Posting starts the timelock.
3. **Wait.** The published `PolicyController` delay runs its course so that anyone can review and object. Only the guardian pause bypasses the delay, and pausing is all it can do.
4. **Execute.** Once the delay has run, the multisig applies the change, and `PolicyController` records it by emitting `ParamChanged(key, oldValue, newValue, rationaleHash)`.
5. **Archive.** The governance log in the Observatory, the public loan explorer, keeps the proposal, the execution transaction and the rationale on view permanently.

## Effect on loans already open

* Origination and refinance fees are locked at the rate that applied when the loan was originated or refinanced.
* The interest share remains at the rate in force at origination.
* If a tier is demoted, the liquidation LTV on existing loans moves only after a grace period announced with the change, so borrowers have time to respond.
* Oracle adapter changes apply immediately, because they are corrective.

## The emergency pause

The pause reaches new loans and liquidations, nothing more. It exists for oracle incidents, newly discovered vulnerabilities and chain-level events, and it has no effect on repayment. Every use is logged with a rationale and followed by a published incident note.

## Who holds the keys

The timelocked multisig sits with the foundation, and its signers come from both the team and independent parties. A governance module on the roadmap will take over parameter control while preserving the timelock, the public rationale, the absence of any access to funds and the guarantee that repayment cannot be paused. See [Corporate structure](/compliance/corporate-structure.md).


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