Abstract
This proposal introduces three key reforms aimed at improving DAO operations:
(1) Adding enforceable punitive measures to the Code of Conduct;
(2) Requiring transparent conflict of interest (COI) disclosures for all voting delegates.
Specifications
1. Code of Conduct Punitive Measures
The Moonwell DAO Constitution explicitly defines a Code of Conduct to ensure DAO members, including delegates, maintain a high standard of ethical behavior for voting and discussion. Until now, there has never been discussion about punitive measures for violating the Code of Conduct. We want to open this discussion among delegates to explain what we believe could constitute a Code of Conduct violation and possible options for how it should be dealt with.
By their nature, punitive measures are very difficult to enforce among DAOs. However, as we introduce more complicated delegate structures and as the regulatory environment matures for onchain organizations, we should consider including measures to enforce and encourage ethical delegate behavior.
Code of Conduct violations (i.e. attacking and accusatory behavior without substantial evidence, doxxing, failing to disclose conflict of interests, etc.) may be subject to punitive measures by the DAO. For instance, in the case of a Superdelegate, their stake may be revoked and they may be demoted or entirely removed for failing to adhere to the Code of Conduct. Generally, the majority of conflict issues can be resolved by parties responding in good faith. However, if the matter is unable to be resolved and leads to threats or harassment, then please document and provide to Moonwell Foundation leadership (including directors and DAO operators/accountants) who will have the final say on the issue. The following protective measures may be enacted in the case of a Code of Conduct violation:
-
Delegate Rush/Superdelegate Removal
- WELL Stake provided for voting in governance may be removed and compensation will be discontinued in the case of a violation.
-
Contributor Position Removal
- If the contributor is NOT a superdelegate, they may be blacklisted from the superdelegate program or if an existing agreement is in place, it may be terminated.
-
Last-Minute Vote Swaying
- Buying or selling tokens within a 30-day period of a proposal submission may be considered a Code of Conduct violation, or encouraging any affiliated parties, subcontractors, employees, or partners to purchase tokens to increase voting power may also be a violation.
2. Conflict of Interest Transparency Disclosure
The Moonwell DAO Constitution describes integrity as a core value, and states that potential conflicts of interests should be disclosed. We believe that we should strengthen the language of this section.
For those unfamiliar, Conflict of Interest (COI) is a scenario where a contributor, or any entities that a delegate has a direct professional or financial relationship with, stand to directly benefit from the outcome of a proposal or an election.
If a conflict of interest exists, then it is expected that a contributor/delegate should disclose the nature and extent of the conflict in its relation to the proposal and its discussion prior to voting. It is expected that contributors err on the side of overcommunication rather than undercommunication for their COI disclosures.
To clarify, a failure to disclose a conflict of interest may be treated as a violation of the Code of Conduct and subject to the enforcement measures outlined above. A few examples of transparent disclosures are listed:
Service Provider Relationship/Funding Applicants
“COI Disclosure: I am a paid contributor of Lunar Labs, which is currently under contract with Moonwell DAO to perform (insert task here). This proposal includes a budget increase for these services. While I support the work, I will abstain from voting to avoid a direct conflict.”
Tokenholder in Partner Protocol
“COI Disclosure: I hold a significant stake in [Partner Protocol] which would benefit from being added as collateral in this proposal. My views are informed by that interest. I plan to vote, but I am disclosing this relationship in full transparency.”
Advisor to Relevant Team
“COI Disclosure: I have an unpaid advisory engagement with a project team mentioned in this proposal. I receive no compensation but have contributed informal feedback and product suggestions.”
Perceived Pros & Cons
Pros:
-
Clear Boundaries: the addition of enforceable rules to the Code of Conduct, reduces ambiguity and improves professionalism for the DAO.
-
Predictable Governance Cadence: Formalized proposal timing reduces confusion and enables better planning for delegates and community members.
-
Protection Against Bad Actors: by allowing removal and penalties, this proposal discourages harmful behavior and possible governance attacks.
Cons:
-
Enforcement Complexity: The punishment decision may be politicized or overly complicated for the DAO.
-
Emergency Intervention: to be further discussed, there may be instances where, in the interest of the safety of the DAO, the aforementioned procedures must be sidelined.
Future Work & Evaluation
This is the first of a few proposals and discussions intended to mobilize the DAO for greater mobility and idea generation for the success of the protocol. In the coming weeks, we plan to create additional discussions on potential ideas for the DAO: MALF efficiency upgrade proposal, WELL liquidity management, and other experimental ideas for blue ocean pie growth in revenue.
After passing, this proposal will go into a 6-month trial period, wherein it is suggested delegates air their concerns on the performance of these changes within this proposal discussion.
Voting Options
If this discussion and vote are successful, Moonwell documentation will be changed. The following voting options will be:
-
Approve All of the Above
-
Approve only Punitive Enforcement
-
Approve only COI Disclosures
-
Approve None
-
Abstain
For any ideas for future proposals or collaborations, please reach out to Mims0x on Telegram.