Standard Path (Signaling)

Because sequencers stake AZTEC tokens to secure the L2 network, they are also the primary governors of the system. Any governance proposal must be encoded and deployed as a smart contract payload on Ethereum. While core contracts are immutable, the onchain Governance system can designate a new ‘canonical’ rollup with a 2d delay and has access to critical configuration permissions that can freeze or compromise the Rollup system. These permissions can only be accessed through the process described below.

1. The Signaling Phase (GovernanceProposer)

Aztec uses an onchain “Empire” signaling system. Active sequencers operating on the ‘canonical rollup’ (as defined by the Registry) call signal(payloadAddress) on the L1 GovernanceProposer contract during their designated L2 slots to support a specific upgrade payload. A voting round consists of 1,000 slots. To win a round and become a formal proposal, a payload must receive signals from at least 600 slots. Once quorum is reached, the payload is submitted to the L1 Governance contract.

2. The Voting Phase (Governance)

Once submitted, the proposal enters a delay and voting flow:

• Pending (3d): At the end of this delay, voting power is snapshotted.
• Active (7d): AZTEC token holders can vote. To pass, a proposal must reach a 20% Quorum of all staked power, and the yea votes must exceed a required margin of 33%.
• Queued (2d): If successful, the proposal enters an execution delay. This acts as an exit window, allowing dissenting sequencers to initiate a withdrawal of their staked tokens before the malicious/disagreed-upon code is executed.
• Executable (7d): The proposal enters a grace period where anyone can call execute(). If not executed, it expires.

Total standard delay from proposal to execution: 12d.

Emergency Path (Circumvent Signaling)

If the L2 sequencer set is offline, censoring, or acting maliciously, the GovernanceProposer cannot be used. To ensure liveness, anyone can bypass the Sequencer signaling phase using the proposeWithLock() function directly on the Governance contract.

• An actor must lock 258 M AZTEC, roughly 2.5% of total supply
• These funds are locked for an extended 3mo.
• Once proposed, the payload enters the exact same 12d Voting Phase (Pending -> Active -> Queued -> Executable) as the standard path.

Rollup Immutability

The smart contract code of Rollup, its verifier and its canonical messaging contracts cannot be changed. For feature upgrades, users need to migrate to a new Rollup. Migrating Rollups involves a Governance action that designates a new Rollup contract address as canonical. The GSE (Governance Staking Escrow) automatically migrates the voting power and stake of all active sequencers to the new rollup version if they staked to the default magic address 0x9064Fb41156D300196d5Eb95E0B3c1f08eBc39a8 instead of a specific immutable rollup. Importantly, Governance has revoked ownership and access to all critical config options of the current core Rollup contract, which makes it fully autonomous via the Escape Hatch. Governance can only remove staking incentives by creating a new ‘canonical’ Rollup and brick the sequencer queue via GSE.setProofOfPossessionGasLimit(0), leaving the Escape Hatch as the fully immutable option to progress the L2 in the worst case.

Slashing and the SlashVeto Council

Aztec features onchain slashing for equivocation or missing attestations, managed by Slasher and TallySlashingProposer.

There is a protective Vetoer role held by the SlashVeto Council. The Council cannot upgrade the protocol, alter governance, or steal funds. Instead it is limited to two permissions:

• call vetoPayload() to stop a specific slashing event.
• call setSlashingEnabled(false), which pauses all slashing in the protocol for a period of 3d.

Economics & Treasury

• Coin Issuer: The CoinIssuer contract is owned by Governance and is authorized to mint new AZTEC tokens up to a cap of 20% of the current total supply per year.
• Protocol Treasury: Funds owned by the DAO sit in the ProtocolTreasury. The Treasury has a hardcoded timestamp (approx. Nov 2026). Before this date, the DAO cannot spend Treasury funds. After this date, Treasury funds and token ownership can be moved with a Governance Proposal.

Joining the sequencer set is permissionless and requires staking 200 K AZTEC. For each epoch, the rollup samples a 48-member committee from the active sequencer set of 3415 and selects one proposer from the current committee per slot. More than 2/3 of the sequencers in the committee need to attest to each proposed block in an epoch for it to be valid.

The chart models live-chain selective censorship only. It does not model the escape hatch, validator-set changes, validator-set lag, and blanket-censorship resistance gadgets.