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It requires the tech, Colonial Centralisation, and that you're not a machine empire, hivemind or necrophage.
It imidiately grants a bunch of negative and positive modifiers, mainly gaining less resources, but less cost and upkeeps, less encryption security, increased morale, and more admin cap.
Other than that, if you're the precident of a federation, after a month, everyone in the federation will share a % income at a bonus of everyone being granted unity.
The upgrade requires the tech living state.
It imidiately increases the modifiers of the last.
It also allows the sharing of income to happen when you're not the president and gives you casus belli against people with low happiness.
The war goal for the casus belli will stealLiberate all the pops that was unhappy at the moment of declaring war. This can however not be done to someone already in a war.
Furthermore it unlocks a new type of federation, which is a mix of the non-hegemony federations with a specilisation law.
At highest centralisation it also allows for 50% of naval capacity to be the federation fleet.
However due to PDX not allowing triggers in laws, and not allowing more than 1 trigger in each perk, I could not make it fully like I wanted, so instead we have a generalised with a small bit of specilisation.
Note: for compatibility's sake I decided NOT to touch vanilla laws, and therefore there's an extra federation contribution law which you can safely ignore.