The most significant change in this phase is the introduction of democracy. Changes to the network such as validator set changes, approving source code upgrades, etc. that were done by the Master in PoA-1 will now be implemented via ever-increasing democratic governance during this phase. Both token holders and Council members can propose changes and the Council members will vote. A token holder who is not a member of the Council must lock at least 1000 tokens to make a proposal. The purpose of the lockup is to prevent spam proposals and does not impact the acceptance or rejection of the proposal. The locked tokens are returned to the proposer once the proposal has been considered.
There is only one proposal queue in PoA-2 (this increases to two in the PoS phase), and every 20 days a proposal is considered and the Council will vote on the proposal. The voting lasts for 15 days and the members can vote aye (yes), nay (no) or abstain from voting. All votes carry equal weighting. If a proposal is accepted, it is enacted, meaning it takes effect in 2 days. However, the technical committee can fast-track the enactment in urgent cases. In addition, the Master can cancel any accepted proposal and can unilaterally make changes to the network like in PoA-1 but the association will limit this as much as possible as the democratic process is clearly the favored approach.
Another thing to note about the proposal process is that it happens in 2 steps for reducing on-chain storage and then also making it cheaper for proposers to propose. First, the proposal hash is submitted on-chain and then the expectation is that the proposer will share the actual proposal with the community off-chain like on forums. People can then compare the proposal with its on-chain hash and then express their opinion and may decide to back it with tokens as well, this backing is called
seconding. People might not like the proposal and thus the proposer will understand that his proposal does not stand a chance to be approved and he will not publish the full proposal and thus take chain-storage and pay fees.