Hello everyone, Carl here from Wheelhaus Labs.
As Moonwell prepares to migrate to a simplified governance framework running entirely on Base, I’d like to surface a related idea that could strengthen governance participation and better align incentives across the protocol: shifting governance from the WELL token to the stkWELL token.
Today, the majority of Moonwell DAO’s economic weight and community participation is centered on stkWELL, not WELL. Most users stake WELL to earn rewards, and this has resulted in governance power becoming overwhelmingly concentrated in stkWELL, even though stkWELL holders currently cannot delegate. This leaves the active delegate ecosystem constrained as high-context, engaged delegates simply cannot scale their influence because the primary governance supply is locked in a non-delegatable form. Meanwhile, the WELL supply is very lightly delegated: only 4.77M WELL is delegated to someone other than oneself, while 632.6M stkWELL is held by addresses that have participated in governance at least once.
Here are some relevant figures to illustrate the imbalance:
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Total delegated WELL: 43.85M
• Self-delegated: 39.08M
• Delegated to others: 4.77M
• Non self delegations count with > 0 tokens: 227
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Total stkWELL supply: 1.01B
• stkWELL held by addresses that have ever voted: 632.6M
• stkWELL holders: 10,194
• Number of stkWELL holders who have ever voted: 3,797
These numbers show that the true base of governance power is already stkWELL, not WELL and that only a tiny fraction of delegatable WELL is actually delegated in a meaningful way. As a result, governance participation is structurally flatter than it needs to be, and delegates cannot meaningfully accumulate delegated vote power.
With the DAO already discussing and preparing for a major change to the governance architecture via a new Base-native Governor, this is the most logical moment to line up the governance token with the protocol’s real economic foundation. Moving to stkWELL would strengthen decentralization, empower engaged delegates, and align governance with where users already choose to hold their WELL. We could technically allow delegation for both WELL and stkWELL, but that would introduce unnecessary complexity in my opinion. Concentrating governance at the stkWELL layer is much cleaner and matches where almost all tokens reside.
I’d love to hear thoughts on whether the DAO should explore this transition as part of the upcoming governance upgrade.
— Carl / Wheelhaus Labs
Hey @Wheelhaus,
I don’t agree with migrating governance from WELL to stkWELL. Since the beginning, one of the core utilities of WELL has been to serve as the governance token of Moonwell. Moving governance to stkWELL would change that assumption and could create confusion about the token’s intended role.
Another important factor is multichain support. WELL is an xERC20, which allows it to exist on multiple chains like Base and Optimism, and potentially on new EVM networks if the community chooses to expand. stkWELL, on the other hand, is not multichain. Migrating governance to stkWELL would lock governance and remove flexibility that WELL currently provides. (I’m not sure stkWELL could ever be made multichain, considering that each network maintains a separate Safety Module.)
xWELL standard enables unified governance across bespoke networks, allowing token holders to participate in the Moonwell DAO regardless of their preferred network.
Regarding the delegation challenge: I think you’re absolutely right that the current system makes it difficult for delegates to build voting power, because most users prefer to stake WELL for rewards instead of holding it liquid. And since stkWELL cannot be delegated, this locks governance participation in a structure that doesn’t scale well for delegates.
My view is that enabling delegation for stkWELL would be a better path forward than replacing WELL governance entirely.
If stkWELL holders could delegate their voting power while still earning rewards, and without needing to vote at least once every 30 days to claim, it would make delegation far more attractive. This would increase delegate power naturally, instead of forcing a gov token migration.
Happy to explore this topic further.
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Thanks for the response Fechuky!
I agree that preserving WELL as the canonical governance token makes sense given the xERC20 design and multichain flexibility. I actually did consider a dual-delegation model (both WELL and stkWELL delegatable) originally, but opted for presenting the single-token framing mainly for simplicity and because delegation activity on liquid WELL is extremely low relative to the size of the staked supply. But I think you’re right that enabling delegation for stkWELL while still preserving WELL governance is a cleaner path that avoids changing the token’s role.
The other piece I believe pairs well with this is revisiting parts of MIP-X05. If stkWELL becomes delegatable, then adjusting the incentive so that either voting yourself or delegating to an active delegate qualifies for rewards would put incentives in the right place. It would encourage WELL/stkWELL holders to empower high-context delegates, increase the percentage of vote-active supply used in each proposal, and help form a stronger delegate class without forcing anyone to leave the Safety Module.
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