> For the complete documentation index, see [llms.txt](https://docs.matrix.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.matrix.io/hong-kong-stablecoin-25-26/real-world-asset/reports/matrix-ai-network-driving-hong-kongs-stablecoin-infrastructure-and-real-world-asset-tokenization/chapter-6-community-governance-and-economic-model/6.1-decentralized-governance-structure.md).

# 6.1 Decentralized Governance Structure

Matrix employs DAO-based governance to ensure RWA asset management decisions are made democratically by stakeholders, not centralized authorities. For each tokenized asset on Matrix, a dedicated DAO is automatically created, featuring the following components:

#### Governance Components

<table data-header-hidden><thead><tr><th valign="top"></th><th valign="top"></th></tr></thead><tbody><tr><td valign="top"><strong>Component</strong></td><td valign="top"><strong>Functionality</strong></td></tr><tr><td valign="top">Proposal System</td><td valign="top">Token holders can propose changes in asset strategy, sales, or operations</td></tr><tr><td valign="top">Weighted Voting</td><td valign="top">Vote power determined by token holdings, with optional staking incentives</td></tr><tr><td valign="top">Execution Engine</td><td valign="top">Approved proposals executed automatically via intelligent contracts</td></tr><tr><td valign="top">Transparent Logs</td><td valign="top">All governance actions permanently recorded on-chain</td></tr><tr><td valign="top">Multi-tier Access</td><td valign="top">Role-based permissions (Observers, Proposers, Core Governors)</td></tr></tbody></table>

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#### Technical Compliance

<table data-header-hidden><thead><tr><th valign="top"></th><th valign="top"></th><th valign="top"></th></tr></thead><tbody><tr><td valign="top"><strong>Component</strong></td><td valign="top"><strong>Implementation</strong></td><td valign="top"><strong>Regulatory Alignment</strong></td></tr><tr><td valign="top">Weighted Voting</td><td valign="top">Dynamic vote weight calculation based on holdings</td><td valign="top">Complies with Hong Kong’s Virtual Asset Guidelines, Chapter 8</td></tr><tr><td valign="top">Execution Engine</td><td valign="top">Smart contract-triggered execution</td><td valign="top">GDPR-compliant data privacy controls</td></tr><tr><td valign="top">Access Layers</td><td valign="top">Three roles mapped to SPV governance structure</td><td valign="top">Mirrors board composition of legal entities</td></tr></tbody></table>