The securities market is a rights market. Governance tokens are not there yet.
Set down once, in plain terms, so that they may be checked against us. They are the terms on which we ask to be read.
The public securities market is already a hyper-efficient market for control. A listed share is not a narrative; it is a bundle of executable claims. Holders can call a special meeting, remove a board, approve or block a merger, tender into a bid, and demand appraisal value in cash. Whoever ascribes a higher value to a company can buy control and act on it — proxy contests, tender offers, take-privates, the whole machinery. That machinery is why mispriced firms get repriced, why entrenched management gets replaced, why conglomerates get broken up and sleepy assets get consolidated. The efficiency is not in the trading screen. It is in the rights underneath.
Every one of those rights exists because it was written down and made enforceable. Disclosure schedules, merger votes, dissenters' rights, poison-pill limits: a century of statute and precedent, each one auditable by any participant and ultimately compellable in court. The market's efficiency was manufactured — by standards, enforced through mechanism. Nothing about it is natural, and nothing about it is mysterious.
Governance tokens today carry almost none of this bundle. The holder may signal in a poll while an upgrade key rests in a wallet and a committee decides spending. There is no callable meeting. No appraisal right. No compellable disclosure. Control transfers are negotiated privately with foundations, not executed against the token. The result: a market of thousands of protocols that cannot be bought, cannot be merged, and cannot be disciplined — a fragmented market where capital cannot act and value cannot clear.
Fragmentation is the tax; consolidation is the fix. Thousands of protocols duplicate infrastructure, fragment liquidity, and run treasuries without accountability, because no mechanism exists to combine them or wind them down. In the securities market this problem solved itself — roll-ups, acquirers, activists — because the rights existed to do it. Governance tokens lack the mechanism, so the industry drifts toward a thousand static fiefdoms. We hold that DeFi needs the same capability: contested control, asset combination, and exit priced at fair value, executing on-chain.
A governance token is worth the actions its holder can execute. Control, recall, distribution, exit: whatever exists as a contract function prices into the token. Whatever lives in forum posts, multisig policies, or foundation discretion does not exist for the market at all. Unenforceable claims are not discounted; they are unpriced.
Every governance action should be a transaction. Installing or removing an operator, capping a treasury spend, claiming a revenue share, exiting a merger: each should be a callable function with a known cost and a bounded time. If an action requires a meeting, a discretionary approval, or a favour, it is not market infrastructure.
Agents are the next marginal trader. The securities market needed a century of intermediaries to make rights exercisable; this market can skip them. Machines that read state, price claims, and execute rights — for allocators, risk engines, treasuries, and funds — are the participants these standards are built for. A right that cannot be verified by a program in one call does not exist in that market. Our determinations are machine-readable by construction: structured, hash-committed, and recorded as on-chain attestations.
Cost of exercise is part of the right. A recall that costs more to use than the harm it prevents, an exit priced below fair value, a vote that never reaches quorum: rights in name only. We measure what a right costs to use, not merely whether it exists. And a token that cannot be acquired at market price — by transfer gates, permanent locks, or untouchable founding weight — has removed the only enforcement that does not require a committee. We grade that as a defect.
No issuer pays, and no issuer is the client. We are funded by those who consume the determinations — capital allocators, risk engines, custodians, agents — never by those scored. A body paid by its subjects eventually sells its silence; we decline that arrangement in advance. The standard is the product, the badge is earned by passing audits against code, contract state, and observed behaviour, and it is lost the same way.
We submit to the same scrutiny we ask to apply. A standards body that exempts itself is a press office. Check our methodology, our funding, and our record against this page. Amendment, if it ever comes, will be dated and reasoned.
Adopted by the Probity Institute, August 2026. Amended September 2026 (twice): first repositioned to market-efficiency framing; then restructured to state the securities-market comparison directly — the executable rights bundle of public equity, its absence in governance tokens, and consolidation as the efficiency mechanism the on-chain market is missing. Amendments are recorded with dates and reasons.