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 1mo 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 (1mo): 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: 1mo 10d.

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 1mo 10d 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. However, Governance owns critical permissions for configuration parameters that can freeze the L2 indefinitely. ‘Upgrading’ a Rollup contract 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 retains ownership of the old rollup, with the permissions to freeze it in the same or any future governance proposal. In summary and practice, the current Aztec rollup system is not immutable and prone to governance changes with the configured 1mo delay.

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%.
• 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 sequecer 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 0 and selects one proposer per slot. The committe and regular sequencer set can be circumvented via the escape hatch, which designates a bonded proposer (via RANDAO) who can publish checkpoints without committee attestations.