> For the complete documentation index, see [llms.txt](https://funarchy.gitbook.io/funarchy/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://funarchy.gitbook.io/funarchy/security-for-prediction-market/governance.md).

# Governance

This chapter addresses the economic threats to the governance process responsible for disputing and ultimately adjudicating oracle data. Governance in prediction markets goes beyond mere voting; it involves substantial authority to determine market winners and losers and determine prize distribution.

If the consensus process is economically unsound or has procedural loopholes, attackers can manipulate voting results or intentionally delay settlement for financial gain, even without technical hacking. This results in the market's fairness being undermined by the logic of capital or malicious interference.

Therefore, we must design the system so that the cost of launching an attack always exceeds the potential rewards, thereby preemptively eliminating economic incentives for attacks. This chapter focuses on systematic outcome distortion by large capitalists and settlement delay attacks exploiting institutional vulnerabilities, and proposes measures to protect the integrity of the governance consensus process.

## Governane flow

<figure><img src="https://4210179539-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F2DiVEbUgCTsp2iPassR9%2Fuploads%2FrGwfoDGfQ68fZrY327WL%2Fimage.png?alt=media&amp;token=dc87a6b8-5c68-402f-9fc4-5baf1f034be1" alt=""><figcaption></figcaption></figure>

{% stepper %}
{% step %}

#### Propose Phase

This is the stage where prediction market results are first submitted to the system.\
Typically, after an oracle, operator, or designated proposer submits an observation based on an off-chain data source, formal verification and challenge becomes possible in the next step.
{% endstep %}

{% step %}

#### Dispute Phase

Because submitted results may contain intentional or unintentional errors, this is a stage where anyone can challenge the results for a certain period of time (liveness). Participants are required to pay a deposit, and this process is designed to provide economic incentives for correct results.
{% endstep %}

{% step %}

#### Settle Phase

Once the dispute period ends, the final outcome is reflected on-chain.\
This value is used as a reference value for all subsequent market logic, including settlement logic, collateral return, token burning, and payment.
{% endstep %}
{% endstepper %}


---

# Agent Instructions
This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com.

## Querying This Documentation
If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question.

Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter:

```
GET https://funarchy.gitbook.io/funarchy/security-for-prediction-market/governance.md?ask=<question>&goal=<endgoal>
```

`ask` is the immediate question: it should be specific, self-contained, and written in natural language.
`goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal.

The response will contain a direct answer to the question and relevant excerpts and sources from the documentation.

Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.