Summary
Proposals require a minimum amount of participation to be considered valid by the DAO’s voting contract, this is referred to as the “quorum”. This proposal seeks to update the quorum calculations used for Moonwell Apollo MIPs (Moonwell Improvement Proposals) from a dynamic, “floating” quorum to a static quorum set to 40 million (MFAM), meaning that 40 million MFAM is the minimum amount of participation on a proposal for it to be considered valid. The current quorum’s rapid growth via the floating mechanism has hindered Gauntlet’s ability to manage risk due to multiple failed risk parameter adjustment proposals. The inability to reliably pass governance proposals that adjust risk parameters has the potential to introduce additional risk to the protocol. By updating to a static quorum model, like the one used in Moonwell Artemis Governance, Compound governance, and most other DAOs that exist, we can ensure that quorum requirements promote proposal credibility and sufficient community involvement without negatively affecting the security and continued growth of the protocol.
Definitions
- Quorum: The minimum number of votes required for a governance proposal to pass.
- Moonwell Apollo: The deployment of the Moonwell protocol on the Moonriver Network.
- Moonwell Improvement Proposal: Binding, on-chain governance proposals with the capability of updating the protocol’s codebase.
- Gauntlet Network: Specialists in risk management and economic simulations that contribute their expertise and knowledge to the Moonwell protocol and community.
- Risk Parameter Update Proposals: Moonwell Improvement Proposals submitted by Gauntlet on a bi-monthly basis that update market parameters in order to mitigate risk to the protocol and increase capital efficiency.
Overview
Moonwell Apollo governance currently utilizes a dynamic, “floating” quorum model, where the quorum increases after each successful vote and decreases when a vote doesn’t reach the required quorum. This differs from the static quorum of 100 million WELL tokens used in Moonwell Artemis Governance. As Moonwell Apollo and the broader Moonriver and Kusama ecosystems can act as a testing ground for new features and updates, the choice of a novel floating quorum model would theoretically allow the protocol to be safer as MFAM tokens enter circulation. However, after the recent failure of two Gauntlet proposals, including the recently submitted MIP-40, it seems that the dynamic model hasn’t achieved the intended goals and is introducing additional unnecessary risk to the community. As a result, this proposal would effectively change Apollo governance from a dynamic quorum to a static quorum, similar to the one used in Moonwell Artemis Governance, by adjusting the “quorum caps” to be a very narrow (1 MFAM) band.
^ MIP-40 Vote Results ^
Quorum in Moonwell Apollo governance has rapidly increased from 20 million to approximately 56 million votes over the past 5 months. This proposal would update the quorum caps to a very narrow band around 40 million MFAM, striking a balance between relative ease of reaching quorum and minimizing risks to the protocol. Put simply, this adjustment aims to prevent essential proposals from failing due to a lack of participation, while also maintaining a high enough quorum to prevent low quality proposals from passing without adequate community involvement.
Motivation
Moonwell Apollo’s floating quorum is preventing Gauntlet from effectively managing risk within the protocol. Two of their risk parameter adjustment proposals have been defeated, despite most votes being in favor, as they didn’t meet the required quorum threshold. Quorum should ideally serve as a minimum participation requirement rather than a gating mechanism. Its primary purpose in governance is to ensure proposal credibility and sufficient community engagement, which helps prevent harmful or low-quality proposals from passing. By adopting a static quorum model set at 40 million votes, Gauntlet and other trusted contributors submitting important proposals can more easily achieve approval, without putting the protocol at undue risk and reducing governance fatigue.
Implementation
The implementation of MIP-4x will involve simply calling the _setQuorumCaps function on the governor with the lower cap being 40M MFAM and the upper cap being 40M + 1 MFAM, effectively changing the quorum from a floating model which adjusts after every proposal, to a fixed quorum set at 40 million votes. I have collaborated with other Moonwell contributors to source and validate the proposed smart contract calls and their effects, ensuring that the proposed changes will work as intended.
Voting
All MFAM holders are encouraged to vote on this proposal. Voting options include:
- For: Update the quorum used in Moonwell Apollo governance to a static 40 million votes
- Against: Make no change
- Abstain: Neither for nor against the change