diff --git a/src/defi/governance.py b/src/defi/governance.py
new file mode 100644
index 000000000..c71b203bd
--- /dev/null
+++ b/src/defi/governance.py
@@ -0,0 +1,103 @@
+from collections import defaultdict
+import time
+
+class Token:
+    def __init__(self, name, symbol, total_supply):
+        self.name = name
+        self.symbol = symbol
+        self.total_supply = total_supply
+        self.balances = defaultdict(int)
+
+    def transfer(self, from_address, to_address, amount):
+        if self.balances[from_address] < amount:
+            raise ValueError("Insufficient balance")
+        self.balances[from_address] -= amount
+        self.balances[to_address] += amount
+
+    def mint(self, to_address, amount):
+        self.balances[to_address] += amount
+        self.total_supply += amount
+
+class Proposal:
+    def __init__(self, proposal_id, creator, description):
+        self.proposal_id = proposal_id
+        self.creator = creator
+        self.description = description
+        self.votes = defaultdict(int)  # user -> vote (1 for yes, -1 for no)
+        self.created_at = time.time()
+        self.executed = False
+
+class Governance:
+    def __init__(self, token):
+        self.token = token
+        self.proposals = {}
+        self.proposal_id_counter = 0
+        self.quorum = 0.1  # 10% of total supply must vote
+
+    def create_proposal(self, creator, description):
+        proposal = Proposal(self.proposal_id_counter, creator, description)
+        self.proposals[self.proposal_id_counter] = proposal
+        self.proposal_id_counter += 1
+        print(f"Proposal created: {proposal.proposal_id} by {creator} - {description}")
+
+    def vote(self, user, proposal_id, vote_value):
+        if proposal_id not in self.proposals:
+            raise ValueError("Proposal does not exist")
+        if vote_value not in [1, -1]:
+            raise ValueError("Vote must be 1 (yes) or -1 (no)")
+
+        proposal = self.proposals[proposal_id]
+        if user in proposal.votes:
+            print(f"{user} has already voted on proposal {proposal_id}.")
+            return
+
+        proposal.votes[user] = vote_value
+        print(f"{user} voted {'yes' if vote_value == 1 else 'no'} on proposal {proposal_id}")
+
+    def execute_proposal(self, proposal_id):
+        if proposal_id not in self.proposals:
+            raise ValueError("Proposal does not exist")
+        proposal = self.proposals[proposal_id]
+
+        if proposal.executed:
+            print(f"Proposal {proposal_id} has already been executed.")
+            return
+
+        total_votes = sum(proposal.votes.values())
+        total_supply = self.token.total_supply
+        yes_votes = sum(vote for vote in proposal.votes.values() if vote == 1)
+        no_votes = sum(vote for vote in proposal.votes.values() if vote == -1)
+
+        if len(proposal.votes) / total_supply < self.quorum:
+            print(f"Proposal {proposal_id} did not meet quorum requirements.")
+            return
+
+        if yes_votes > no_votes:
+            print(f"Proposal {proposal_id} passed with {yes_votes} yes votes and {no_votes} no votes.")
+            # Execute the proposal logic here (e.g., upgrade contract, change parameters)
+        else:
+            print(f"Proposal {proposal_id} failed with {yes_votes} yes votes and {no_votes} no votes.")
+
+        proposal.executed = True
+
+# Example usage
+if __name__ == "__main__":
+    # Create a governance token
+    governance_token = Token("GovernanceToken", "GOV", 1000000)
+
+    # Mint some tokens for users
+    governance_token.mint("user1", 10000)
+    governance_token.mint("user2", 20000)
+
+    # Create a governance contract
+    governance = Governance(governance_token)
+
+    # User creates a proposal
+    governance.create_proposal("user1", "Increase the reward rate for yield farming.")
+
+    # Users vote on the proposal
+    governance.vote("user1", 0, 1)  # User1 votes yes
+    governance.vote("user2", 0, - 1)  # User2 votes no
+
+    # Execute the proposal
+    governance.execute_proposal(0)  # Attempt to execute the proposal