Monthly Governance Reports

Announcements & Updates Updates
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February 2024 Update

The monthly governance recaps serve as a compendium of key governance updates for the preceding month. This monthly update covers Moonwell governance activities for February 2024.

This update includes:

  1. Proposals and Milestones
  2. Voting Insights and Observations
  3. Community Strengths
  4. Opportunities
  5. Conclusion and Links

Proposals and Milestones

Moonwell’s primary governance initiatives for this period included:

  1. Risk Management and Parameter Adjustments: Gauntlet and Warden Finance continued to provide consistent recommendations on risk parameters and IR curve adjustments. Gauntlet utilized Cap Guardian to adjust borrow and supply caps for assets including wstETH and xcUSDC. Warden Finance worked with Gauntlet to offer risk management support across the Base, Moonbeam, and Moonriver deployments.

  2. Rebalancing Funds to Ensure Protocol Economic Sustainability: Prior to a productive debate among delegates, the Moonriver deployment of Moonwell reached a critical juncture when 50% of the initial MFAM tokens meant for liquidity incentives were exhausted. As a relatively urgent matter, the DAO settled on a strategy to maintain and extend liquidity incentives to users. The suggested solution was to reallocate 20% of the MFAM token supply originally allocated to Developer Grants and Incentives to be used as MFAM liquidity incentives. With multiple options regarding how long to make the distribution period, the community signaled on Snapshot that they’d prefer the shortest period: two years. While the Snapshot passed, there was a substantial number of opposing votes. Rather than being a binding commitment, this proposal was meant to signal where to pull the tokens from and to determine the rate. Utilizing the entire 20% developer grants and incentives pool was not a mandate. Monthly on-chain votes will still be required. As a result of this Snapshot passing, the community decided to pass MIP-R13, which included adjustments to the amount of MFAM released per cycle for the funds to last another two years.

  3. Governance Best-Practices: Throughout early February, Moonwell delegates continued to engage in a debate on managing the MFAM incentives budget and protocol monetary sustainability; in turn, they unearthed:

  • the need to more thoroughly discuss topics in the forums before bringing them up to Snapshot votes,
  • the need to keep all governance discussion on the relevant topic contained in the forum, without letting it spill over into Telegram or other channels, and
  • the need to stay on top of runway issues before they become critical.

  1. New third-party integrations: Boardroom officially kickstarted a partnership with Moonwell as a governance facilitator and data service provider on February 5, 2024. Boardroom began producing recurring governance content, including regular updates and monthly governance calls. The first call was hosted on February 15. On February 20, Boardroom published a proxy report which is meant to give community members a 360-degree view of the Moonwell DAO in its current state.

  2. Development of the Nomad Collateral Redemption and Reallocation Initiative:
    Core contributor Elliot gave the community an update on the progress of the Nomad Recovery. He provided technical details surrounding the recovery process and explained the delays in this effort. He went on to raise potential mitigation to the issue of bridging Nomad assets, volunteering that a trusted community member could un-bridge assets using an externally-owned account (EOA), redeem the Nomad assets on mainnet for their corresponding underlying tokens, and then send the underlying to the multisig. He nominated himself for the role and encouraged others to do so as well.

Major Milestones Achieved:

  • Gauntlet Guardianship: The community voted to extend Gauntlet’s role as the Cap Guardian on both Moonriver and Moonbeam networks.
  • USDC Anywhere: Lunar Labs launched a feature to facilitate cross-chain lending and borrowing of USDC across multiple Ethereum networks, using Circle’s Cross-Chain Transfer Protocol (CCTP) and Socket technology. This removes the need for unofficial, wrapped versions of USDC by minting native USDC on the target network.
  • MIP-M18 Passed: This proposal adjusted the incentives around USDC. With Native USDC (xcUSDC) increasing in liquidity on Moonbeam, the goal was to shift incentives away from the bridged USDC (Wormhole) pool to the xcUSDC pool.

Voting Insights and Observations

Summary of governance participation trends:

February saw:

  • five on-chain proposals
  • four Snapshot proposals
  • 24 forum posts

For the observed period, the number of active voters for on-chain proposals averaged 46, with a maximum of 78 and a minimum of 22.

Proposal On-chain votes
MIP-B13 59
MIP-R12 22
MIP-M17 78
MIP-M18 47
MIP-R13 26

The voter turnout for Snapshot proposals averaged 24, with a maximum of 51 and a minimum of 11.

Proposal Off-chain votes
Gauntlet to Become Cap Guardian on Moonbeam 51
Gauntlet to Become Cap Guardian on Moonriver 11
MFAM Token Reallocation for Liquidity Incentives 19
Migrating the Apollo Vault to Aera V2 15

The previous maximum number of Snapshot voters occurred in January when a proposal for the Moonwell Asset Listing Framework managed to attract 54 voters.

Success Insights

  • On-chain: The on-chain proposals in February witnessed a 100% success rate. All proposals passed with 99.7% consensus or above, with the exception of MIP-R13 which garnered a more divisive 57.7% “For” vote.
  • Off-chain: Snapshot proposals also enjoyed consistent success rates. Of the four proposals submitted on Snapshot, none were defeated. There was a high degree of consensus opinion, with three of the proposals closing with 99-100% agreement. The outlier was again the Snapshot for Rebalancing MFAM Liquidity Incentives, which passed Snapshot with a 68.55% agreement rate.

Browse all of the proposals here.

Community:

Community Strengths

Generally, the Moonwell community can be described as growing and engaged. At this stage in the protocol’s development, the DAO has multiple highly involved members. In the future, as Moonwell continues to scale the size of the DAO while maintaining this quality of engagement, it could become one of the most vibrant DeFi communities. The delegates are well-informed, enabling them to hold meaningful discussions on the future of Moonwell governance from a high level; the proposals that are made are consistently high-quality. The primary service providers also continue to make thoroughly researched and well-presented proposals; their contributions routinely result in the highest voter turnout.

In Boardroom’s first Governance Community call in mid-February, multiple service providers presented details about their past work, current work, and proposal activity during the month. Delegates were also able to share their opinions on an impactful proposal, debating high-level Moonwell governance practices. The recording of the call can be found here. Continuing these conversations in real-time could prove to be net-positive in terms of community dynamics; it maps a “voice” to the names of users in the forums and allows for deeper discussion on critical issues.

Opportunities

As Moonwell matures and scales, challenges understandably arise in communicating every aspect of the DAO’s operations with every community member. For example, this forum post displayed a misunderstanding of MFAM runway before a contributor to the Moonwell protocol was able to clarify the situation. As the DAO continues to grow and add new members, these types of misunderstandings are commonplace. Because no single team member can scale their attention infinitely, it becomes increasingly important to

  1. Create clear, non-technical communications that can answer a wide range of questions.
  2. Make them as easy as possible to find and identify.
  3. Enable community moderators or other active members to easily point newcomers to the relevant resources to help clear up confusion quickly and efficiently.

Boardroom suggests that the community always engage in effective communication. Please reach out if you need support in writing proposals or forum posts.

In the same vein, there is an opportunity to increase productive participation in governance through official rewards programs. The Moonwell could reward the types of user behaviors that most benefit the protocol while avoiding appealing to farmers. We would suggest that the community write a proposal on this if it so desires.

Finally, documentation and education could become a quasi-open source effort by opening the editing of Moonwell Docs. By encouraging community members to help create content for the protocol, Moonwell cannot only benefit from more up-to-date and concise information, but they can also increase the level of understanding of the protocol among the community.

Conclusion

The February 2024 report highlights governance initiatives and high-level discussions on protocol sustainability, milestones achieved by core contributors, a healthy amount of voter turnout, constructive levels of non-consensus voting behavior, and a few immediate opportunities that could improve participation in governance in the short to medium term.

In the future, these monthly updates will include data to track the metrics of the current month compared to the previous month.

Links

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