Simulation-Gated Governance Logic

Binding Policy Activation, Credential Permissions, and DAO Operations to Verifiable Risk Forecasts

7.5.1 What Is Simulation-Gated Logic?

In the NSF protocol, simulation-gated logic means that no policy, clause, credential, or treasury action can activate unless:

• A forecast-backed SimulationRunVC exists

• The required risk thresholds have been crossed

• Governance policies tied to simulation conditions are satisfied

• The simulation was executed with valid models, data, and attestation workflows

This gating applies to all governance operations—from clause execution to DAO restructuring—and ensures that institutional actions reflect validated foresight, not speculation or political fiat.

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7.5.2 Examples of Simulation-Gated Actions

Action	Simulation Condition Required
Trigger Flood Relief Clause	[email protected]_score > 0.85
Disburse Parametric Insurance	[email protected] < 40% baseline yield
Activate Emergency Credential	[email protected] > 0.7 infectious spread index
Initiate Treaty Override	[email protected] > 0.6 + regional trade threshold
Upgrade Simulation Model	BacktestError > 15% for 3 consecutive quarters

Simulation outputs define execution eligibility conditions, replacing outdated threshold guessing with cryptographic verification.

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7.5.3 Clause Execution Controlled by SimDAO-Governed Triggers

All executable clauses contain simulation_validation blocks (see 7.3). If no valid SimulationRunVC exists:

• The clause is not executable

• DAO operations referencing it are suspended

• Proposals depending on it are deprioritized

CAC environments enforce these gates before every workload execution.

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7.5.4 Credential Lifecycle Bound to Simulation Risk Classes

Credential issuance, elevation, expiration, and revocation can all be simulation-gated.

Example policy:

{
  "credential_type": "EmergencyHealthCoordinatorVC",
  "activation_condition": {
    "template": "[email protected]",
    "threshold": "infection_risk > 0.8"
  },
  "revocation_condition": {
    "template": "[email protected]",
    "threshold": "hospital_capacity > 0.85"
  }
}

This transforms the credential layer into a dynamic, risk-aligned access control system.

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7.5.5 Treasury and Financial Logic Bound to Simulation Triggers

NSF defines smart clauses for:

• Parametric finance

• Anticipatory budget releases

• Capital reallocation

• Contingent payouts

These clauses are all simulation-gated. For example:

if drought_risk > 0.9  
then disburse 2M CHF to clause-linked relief pool

All simulation-activated disbursements require:

• Model hash + forecast hash

• DAO finance approval

• Multisig verification

• SimDAO endorsement

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7.5.6 Governance Proposal Eligibility via Risk Forecasts

DAO actions such as:

• Upgrading a clause

• Proposing credential schema changes

• Modifying budget ceilings

• Freezing specific roles or DAOs

…may require risk-based gating.

Proposal DSL includes risk conditions:

{
  "propose_change": "raise public health budget cap",
  "requires": {
    "template": "[email protected]",
    "trigger": "risk_score > 0.7"
  }
}

This enforces evidence-based governance pathways.

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7.5.7 Simulation-Gated DAO Voting Power

DAOs may assign voting weight dynamically based on:

• Risk class exposure

• Forecast-validated credential tier

• Clause activation footprint

• Prior simulation-linked performance (e.g., forecast accuracy for delegated oracles)

Simulation-aware DAOs adapt to real-world risk states without human override.

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7.5.8 Emergency Overrides Based on Simulation Delta

Clauses may include logic to pause or override standard execution if simulation outputs deviate from expectations.

Example:

if forecast_error > 0.15 and risk_score drops below threshold  
then halt disbursement and trigger reforecast

This creates fail-safes based on predictive verification, not administrative backchannels.

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7.5.9 Appeals and Governance Forks Triggered by Simulation Conflict

Disputes over forecasts (e.g., between SimDAOs or clause validators) can trigger:

• Governance forks

• AppealsDAO invocation

• Suspension of dependent clauses

• Rollback to prior clause versions

Simulation conflict becomes a formal governance event logged in the Audit Layer and evaluated through cryptographic consensus.

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7.5.10 Risk-Aware Governance as a Constitutional Pillar

Simulation-gated governance ensures:

• Actions follow evidence

• Policy logic is provable and reproducible

• Credential access is justifiable and dynamic

• Finance flows are risk-tied and auditable

• Institutional decisions are bound to foresight infrastructure

NSF elevates simulations from dashboards to governance primitives, redefining how institutions, DAOs, and treaties act under uncertainty.