How Does a Decentralized Governance System Vote on Adding New Collateral Types?

Adding new collateral types typically involves a multi-step process initiated by a proposal. Token holders of the governance asset vote on the proposal's parameters, such as the collateral's risk profile, stability fee, and liquidation ratio.

Once approved by the majority, the changes are implemented on-chain through a time-locked smart contract, ensuring transparent and community-driven decision-making.