Hey everyone, thank you for being a part of the Moonwell community. I'm so proud of how much we've all accomplished this year and all the success our hard work as a community is bringing to Moonwell.
Proposal
As we continue to progressively decentralize Moonwell, one of our north stars is to increase voter participation in governance. It’s often challenging for protocols like Moonwell to have healthy participation in governance, but it’s critical for the long term resilience and safety of Moonwell that we all do our part by voting. To that end, I’m very excited about the delegate rush that Boardroom is currently helping with.
We can see the outcome of protocols that haven’t been able to sustain an active voting base. The worst case outcome is that the protocol might get taken over by bad actors who simply want to extract value at the expense of the Moonwell protocol and the users who have entrusted Moonwell with their assets. Recently, the “Golden Boys,” a group of activist investors, took over Compound in a successful governance attack.
I have an idea that I wanted to share and hear everyone’s feedback before we implement it in the Moonwell app:
What if you had to have voted at least once in the last 30 days in order to claim your staking rewards from the Safety Module?
The general idea would be not to punish anyone or take away their staking rewards. The staking rewards would still be claimable, but if you hadn’t voted recently, you might have to wait for some time and vote before you could claim.
Would this be desirable, or undesirable to people that are staking in the safety module?
Our goal is not to introduce unnecessary friction - it only takes a few minutes to vote, and gas is sponsored if you use the Coinbase Smart Wallet, so it could even be free.
Questions
Would I still be able to stake or unstake?
Yes, you’d still be able to stake or unstake even if you haven’t voted, subject to the normal restrictions (cooldown).
What if I haven’t voted but I have rewards to claim?
If there is a live proposal, you could vote on it and immediately claim your rewards. If not, you would need to wait until the next governance proposal goes live and vote on it first.
Will my rewards still continue to accrue even if I haven’t voted?
Yes, your rewards will continue to accrue regardless of your voting status.
How can I be made aware of new governance proposals so I can remember to vote?
Boardroom, the Moonwell governance facilitator, posts all new proposals on the @MoonwellGov X/Twitter handle (be sure to follow them), and you can also find them in the Moonwell Discord announcements channel.
Are there any other penalties or downsides to not voting?
There are no other downsides to not voting, other than your voice won’t be heard in governance. Again, we don’t want this to be punitive or impact your financial situation in any way, our goal is to increase governance participation.
Conclusion
I hope this idea could dramatically increase voter participation by engaging the most active and committed WELL holders that are helping to secure the protocol through staking in the Safety module, but I know this is a change and I'd love to hear your feedback, whether you love it or hate it, or maybe you have a better idea. I'm all ears! Please reply and let us know what you think.
Thank you for your support. The goal is to keep a very lively and engaged governance community so if the Golden Boys or any similar activist investors try to take over the protocol through governance we’ll have a lot of active voters to vote in the best interests of Moonwell.
I like that idea! But what if we just made it so as part of this change we also reduced the cooldown for staking from 10 days to 7 days? Since everyone staking will need to vote regularly anyways.
Yes, of course. You could simply vote abstain and that would count as your required vote. It’s a good option for someone that doesn’t want to express an opinion.
It would be nice to have more technical proposals (such as Gauntlet) to include a shortened simplified summary (maybe AI produced). Most people are not going to understand kink and multiplier.
More proposal notification options such as email and text.
Someone mentioned the NFT campaigns. I think recognition incentivises participation. Maybe there could be a weighted benefit to accumulating more proposal participation NFTs. This could act as a deterrent to a group if it required a time investment to push an agenda.
It’s very challenging to give a boost at a protocol level to voters, but this is great feedback so we’ll research it a bit and see what’s possible. Thank you.
These are some really great ideas, thank you! I think the AI summary is something we could add very easily by simply having proposal authors generate it and including it in the proposal text at the top.
As an alternative to Luke’s approach, Boardroom can immediately step in to simplify Gauntlet proposals, as well as other technical or complex submissions. We’ll provide a clear, digestible summary directly in the proposal discussion shortly after they’re posted.
Regarding the second point, we’re in the final stages of developing one-click email sign-ups so delegates can subscribe to email notifications and discussions for Moonwell. These will be ready next week and we’ll circulate a sign up link.
We like this idea a little more. Tieing direct $ penalties with voting might introduce some issues down the road and not sure but seems like something maybe legally challenging as well. Some way of decreasing or increasing delay of funds seems to be more incentivized.
You need to think of the people who view governance as unpaid intellectual labor.
I have a savings account at a credit union, but if I had to serve on a board governance committee or be charged a penalty…that will not fly at all.
My counter suggestion is to offer a monthly “I voted in the Moonwell governance election and got this nifty sticker” NFT and then start stacking benefits based upon how many one earns in a year.
A shorter unstaking period might be nice, and is better than a delay for non voters, but a multiplier rate for rewards token would be better.
For example, Aero distributes veAERO for Flight School shareholders at 1.25x the rate of other shareholders.
I agree with this sentiments shared by @david2115915.
Perhaps we could give small multipliers that can be incrementally compounded based on the number of votes while those who are inactive get penalized with diminishing rates? Of course this would only make sense if the changes in yields are not big as we would still want to welcome stakers that decide to be passive in the governance of the protocol.
Even if the +% were minor ~1-2%, this may increase participation rates and bring a little bit more robustness to the ecosystem rather than just allowing people to unstake by voting.
I think it is extremely desirable to tie staking rewards to active governance participation - whether that be voting yourself or delegating to someone who does.
Because I also work for Tally, I am intimately familiar with the issues tied to lack of gov participation, especially when it comes to governance attacks. Tally recently announced the launch of a protocol to solve this, which shares some of the thoughts in your post and also mine above. The announcement is here - not a shill, but valuable ideas in there!
Arbitrum DAO and RARI DAO will be the first DAOs to use the Tally Protocol, and I think tying staking rewards to active governance participation will eventually be the norm (via the Tally Protocol or otherwise). DUNA also states that one of the ways contributors to DAOs can earn money is for “governance” - which may mean this is a legal path forward for DAOs to return value to their token holders legally (obviously not legal advice).