Weekly Governance Recaps

Boardroom is providing weekly recaps on the Moonwell’s governance activity. This thread is meant to be a one-stop shop for users who would like to obtain a 360-degree view of the forums in a single location.

On each Monday, beginning February 12th, 2024, you can come to this thread to recap the previous week’s activity. Within our weekly recap, we’ll provide a look back at the following items for the past week:

  • Proposals
  • Critical Discussions
  • Governance Changes
  • Contributor Activity

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Weekly Governance Update: Week of February 5, 2024

The first week of February included a mix of controversial forum activity and proactive initiatives from contributors. Here, we highlight them in brief:

Contributor Updates

Proposal: Gauntlet Guardian - wstETH cap recommendations

Author: Gauntlet

Forum Link: Gauntlet Guardian - wstETH cap recommendations

Summary: This forum post on February 5, 2024 suggested that Gauntlet use Cap Guardian to increase borrowing caps and supply caps for wstETH from 1000 to 1300, and 350 to 500, respectively. The use of the Cap Guardians on Base was voted in by the community here in early August, 2023. In that process, Gauntlet assumed a role which allows the team to promptly modify borrow and supply caps in response to market risk events, onchain DEX liquidity fluctuations, and changes in liquidity pool usage. As such, there was no proposal to pass.

Outcome: The transactions were executed on Base and can be reviewed here and here.

Proposal: Gauntlet’s BASE/Moonbeam/Moonriver Recommendations (2024-01-30)

Author: Gauntlet

Forum Link: Gauntlet’s BASE/Moonbeam/Moonriver Recommendations (2024-01-30)

Summary: This proposal, originally introduced at the end of January, recommended adjustments to five risk parameters and two IR curves on Base. These included the wstETH, rETH, and cbETH collateral factors and the wstETH supply and borrow caps. The IR curve adjustments included cbETH and USDC. Moonbeam recommendations included adjustments to two risk parameters (xcDOT and WGLMR collateral factors) and three IR curves (xcUSDT, xcUSDT, and USDC.wh). There were no risk parameter nor IR curve recommendations for Moonriver. As a part of these recommendations, Gauntlet also proposed to become Cap Guardian on Moonriver and Moonbeam, just as they had done for Base. Transactions were then executed to increase wstETH borrow and supply caps on Base. On February 5, Warden Finance reviewed the Gauntlet recommendations and were in favor of the changes. They further recommended decreasing DAI supply and borrow caps to 4m and 3.5m, respectively. On February 6, Gauntlet replied, suggesting a staggered, risk-off approach for DAI following changes in DAI supply on BASE.

Outcome: The Base component of the proposal (MIP-B13) was put up for vote on Snapshot vote where it passed with 100% consensus before going on to an onchain vote. The cross-chain proposal was executed on February 10, 2024. The Moonriver component (MIP-R12) passed a Snapshot vote with 100% consensus and the onchain vote passed with 99.9% consensus. The timelock was executed on February 9, 2024. The final Moonbeam component (MIP-M17) passed a Snapshot vote with 99% consensus before passing an onchain vote with 99.7% consensus. The timelock was executed on February 9, 2024.

Proposal: Weekly Update from Gauntlet

Author: Gauntlet

Forum Link: Gauntlet’s Weekly Market Update (2024-02-02)

Summary: In the most recent market update from Gauntlet, no parameter changes were recommended. DAI was the only asset found to have an average supply cap usage of over 75%, landing at 79.8% in the past week. mWETH and mUSDC had $676.56 and $213.74 in liquidations, respectively.

Delegate Activity

Proposal: MFAM Token Reallocation for Liquidity Incentives

Author: coolhorsegirl

Forum Link: MFAM Token Reallocation for Liquidity Incentives

Summary: A proposal from January 29 continued to see engagement until February 9. This largely came from a point of contention between two delegates. Coolhorsegirl brought up the exhaustion of 50% of MFAM incentives; the delegate proposed reallocating 20% of the MFAM token supply from Developer Grants and Incentives to be used as liquidity incentives for the MFAM markets. Another delegate, Curly, stepped in to offer two main notes: the discussion should have been had on the forums before going to Snapshot for a vote, and there may be better options for how to reallocate the funds (e.g. 3 different “yes” vote options with different timelines). The Snapshot was taken down and re-submitted. The whole process highlighted general voting processes in Moonwell governance, including having more forum discourse on proposals before elevating them to Snapshot votes and directing Telegram discussions on proposals to the forum post.

Outcome: The Snapshot vote was re-submitted on February 5, 2024. The community voted on “Reallocate + 2 year emissions” with 68.55% consensus.

Upcoming Events in Governance

Monthly Governance Call

Feb 15th at 5 PM UTC

Make sure you attend the newly created Monthly Governance Call hosted in Discord.

Sign up here: Discord

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Weekly Governance Update: Week of February 12, 2024

The second week of February included continued risk parameter changes from contributors, new integrations, and the rebalancing of token liquidity incentives. Here are the highlights:

Contributor Updates

Risk Service Update: Gauntlet Guardian - Increase wstETH caps on Base

Author: Gauntlet

Summary: This post notified the community that Gauntlet would be utilizing their role as a Cap Guardian for Base to increase the borrow and supply caps for wstETH from 1300 to 1600 and 500 to 700, respectively. With Gauntlet’s role as a Cap Guardian, the risk service provider can make necessary alterations to supply and borrow caps quickly and efficiently. Accordingly, there were no active proposals that went live to enact these changes.

Outcome: Guardian transactions were executed on-chain here and here on February 14, 2024.

Borrow Cap Updates: Gauntlet Guardian - cbETH Borrow Cap Recommendations on BASE

Author: Gauntlet

Summary: Gauntlet notified the community that it would use Cap Guardian for Base to increase the borrow cap for cbETH from 1000 to 1800. There were no active proposals that went live to enact these changes.

Outcome: The Guardian transaction was executed on-chain here on February 17, 2024.

Recommendations: Gauntlet’s Weekly Market Update (2024-02-02)

Author: Gauntlet

Summary: In the most recent market update from Gauntlet, no parameter changes were recommended for Base. DAI was the only asset found to have an average supply cap usage of over 75%, landing at 79.8% in the past week. mWETH and mUSDC had $676.56 and $213.74 in liquidations, respectively.

Forum Posts: Who is Boardroom and Why Are We Here?; Monthly Governance Reports; Weekly Governance Recaps; Monthly Governance Calls

Author: Boardroom

Forum Links:

Summary: To kick off Boardroom’s partnership with Moonwell, the governance facilitator established three ongoing forum threads and an introduction post. On Monday, the first Weekly Governance Update went live, recapping the week of February 5. On Thursday, Boardroom hosted the first Monthly Governance Community Call, with contributions from Warden Finance, Solidity Labs, Gauntlet, and two delegates (@curly and @coolhorsegirl). You can find a recap and recording of the call in the monthly governance call thread.

Forum Post: Base, Moonbeam, and Moonriver Weekly Market Update - (2024-02-09 through 2024-02-15)

Author: Gauntlet

Summary: Gauntlet provided risk parameter information for the three network deployments. For Base, DAI and rETH were the only assets with over 75% average supply cap usage, at 79.4% and 86.25%, respectively. There were no liquidations on Base. On Moonbeam, three assets had an average utilization of greater than 75%: FRAX (106.35%), USDC.wh (80.82%), and xcUSDT (81.09%). The network did have a few liquidations: $4.11k mFRAX, $262.41 mGLMR, and $42.18 mDOT. On Moonriver, no assets had an average utilization of greater than 75%. There was $1.68k of mMOVR liquidated.

Delegate Activity

Proposal: MIP-R13 Rebalancing of Moonriver Token Liquidity Incentives

Author: Curly

Forum Link: MIP-R13 Rebalancing of Moonriver Token Liquidity Incentives

Summary: In the first of two proposals by Curly on February 13, MIP-R13 was automated and generated by the Moonwell Market Reward Adjustment Tool. If passed, this proposal would adjust the rewards on the Safety Module to decrease emissions by -52.70% and emit 2,431,211 MFAM over the next 28 days. Similarly, the rewards on the Dex Rewarder would decrease emissions by -52.70% and emit 2,725,903 MFAM over the next 28 days. It also included adjustments to the supply-side incentives of MFAM/MOVR and xcKSM/FRAX. After the MFAM liquidity incentives Snapshot passed last week, the community began using MFAM originally set aside for grants to provide supply liquidity. This proposal reflects the need to make adjustments to the amount of MFAM released per cycle and to decrease the average reward per pool to extend the runway. Preference was given to MOVR and KSM, lowering the rewards for FRAX.

Outcome: On-chain voting ended on February 16. Although the vote was split, the quorum was met and the proposal passed with 57.7% “For.”

Proposal: MIP-M18 Rebalancing of Moonbeam Liquidity Incentives

Author: Curly

Summary: Curly’s second discussion was also an automated proposal generated by the Moonwell Market Reward Adjustment Tool. If passed, this proposal would keep the rewards on the Safety Module the same and emit 6,778,846 WELL over the next 28 days. Similarly, the rewards on the Dex Rewarder would keep rewards the same and emit 721,154 WELL over the next 28 days. No changes were proposed to the supply side/borrow side of GLMR, xcDOT, xcUSDT, FRAX, ETH.wh, nor BTC.wh APRs. There were changes for the following markets: USDC.wh had a supply side APR adjustment of 15.1% to 12.37%; xcUSDC had a supply side APR adjustment of 7.75% to 280.76%. Curly noted that the large change to USDC APRs is due to increasing the liquidity on Moonbeam, and that preference should be incentivized away from the Wormhole bridged USDC pool to the xcUSDC pool.

Outcome: On-chain voting ended on February 16, with a 100% consensus “For” vote.

Integration Updates

Forum Post: Migrating the Apollo Vault to Aera V2

Author: Aera

Summary: This proposal is from Aera Finance, a non-custodial, autonomous, rebalancing treasury management protocol. It seeks to migrate the existing Apollo Aera vault from Aera V1 to Aera V2, maintaining a 15% volatility target strategy. Aera V2 is live in production and comes with new features, including the ability to generate yield on stablecoins, support for a broader range of assets and strategies, an enhanced security framework, and the elimination of Impermanent Loss. The Aera team is proposing that the community migrate the existing V1 vault with $290k to V2. The team then discussed implementation details for Moonwell Apollo and the proposed benefits of migration. The proposal includes the option to leverage Aave for generating a yield on the USDC holdings in the vault; there will be three options for voting: Yae with Aave USDC, Yae w/o Aave USDC, and Nae don’t upgrade to Aera V2.

Outcome: TBD

Upcoming Events in Governance

Monthly Governance Call

First week of March

Make sure to look out for the next Monthly Governance Call on Thursday, March 7th, 2024 hosted in Discord.

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Weekly Governance Update: Week of February 19, 2024

The third week of February included regular contributor posts, updates on the Nomad recovery efforts, and the passing of a proposal related to a third-party DeFi protocol. Here are the highlights:

Contributor Updates

Forum post: [Gauntlet] Base, Moonbeam, and Moonriver Weekly Market Update

Author: Gauntlet

Summary: Beginning with Base, Gauntlet highlights the assets with an average supply/borrow cap usage over 75%. This week, DAI had an average borrow cap usage of 75.69% and an average supply cap usage of 81.83%. rETH had an average supply cap usage of 88.30%. Liquidated assets included mcbETH and mWETH, at $5.36K and $1.16K, respectively. Next, on Moonbeam, three assets had an average utilization above 75%: FRAX, USDC.wh, and xcUSDT (106.37%, 80.60%, and 80.58%, respectively). Liquidations included $10.28K of mGLMR, $3.88K of mDOT, and $143.24 of mFRAX. Last, Moonbeam had no assets with an average utilization of over 75% and had no liquidations.

Forum post: Rebalancing of Base Liquidity Incentives

Author: Warden Finance

Summary: To help avoid bad debt resulting from critically low DAI circulating supply, Warden Finance recommended the lending market supply to be capped at 50% of the on-chain circulating supply. Other topics discussed included the total supply for the rETH lending market standing at 55% of the circulating supply and rETH and cbETH being underutilized. Changes applied to mitigate these issues included a substantial decrease in DAI rewards to help reduce supply and borrow activity and the shifting of cbETH rewards towards WETH and USDC.

Forum Post: Moonwell Proxy Report - Feb 2024

Author: Boardroom

Summary: As a part of Boardroom’s support for Moonwell, the governance data service provider published a bi-annual “Proxy Report.” The document is intended to capture a 360-degree view of Moonwell DAO Governance. The report covers insights into historical voting patterns, community & delegate survey results, and short- and long-term initiatives to create change for the DAO.

Forum Post: Redemption and Reallocation of Nomad Collateral and Protocol Reserves for FRAX Market Enhancement

Author: Majin

Summary: Originally posted on January 3, 2024, this forum post contains an important update for the Moonwell protocol. Majin, a contributor to Moonwell through Lunar Labs, gave the community an update on the progress of the Nomad Recovery. He highlighted the time delay due to the Nomad KYC process and mentioned that the integration has been tested to ensure that the protocol continues functioning as intended post-upgrade. Essentially, the technical details surrounding the Nomad Recovery are still in progress and the community will stay updated throughout the process. On Wednesday, Majin raised potential mitigation to the issue of bridging Nomad assets from Moonbeam back to Ethereum mainnet: a trusted community member could un-bridge assets using an EOA, redeem the Nomad assets on mainnet for their corresponding underlying tokens, and then send the underlying to the multisig. The multisig on mainnet would then swap all assets into FRAX, and then use Frax Ferry to move assets from Ethereum mainnet back to Moonbeam. Once the assets are back on Moonbeam, they will repay the FRAX bad debt.

He recommended that the community vote on who this community member should be, and he nominated himself for this role. Others who meet certain security criteria were encouraged to nominate themselves as well.

Integration Updates

Forum Post: Migrating the Apollo Vault to Aera V2

Author: Aera

Summary: This discussion went live on February 14 and was included in our last weekly update. Aera Finance sought to migrate the existing Apollo Aera vault from Aera V1 to Aera V2. V2 is live in production and comes with new features, including the ability to generate yield on stablecoins, support for a broader range of assets and strategies, an enhanced security framework, and the elimination of Impermanent Loss. The proposal included the option to leverage Aave for generating a yield on the USDC holdings in the vault; the three options for voting included: “Yae with Aave USDC,” “Yae w/o Aave USDC,” and “Nae don’t upgrade to Aera V2.”

This week, on February 21, the proposal went up for a Snapshot vote.

Outcome: The Snapshot ended on February 24. A quorum was met, with a 100% consensus “Yae, upgrade with Aave USDC” vote.

Upcoming Events in Governance

EthDenver

EthDenver is this week! If you’re showing up at EthDenver, tag @moonwellgov on Twitter/X. Saw a great talk or went to an inspiring meetup? Post a recap and if it’s educational for the Moonwell community, we’ll repost it!

Monthly Governance Call

First week of March

Make sure to look out for the next Monthly Governance Call on Thursday, March 7th, 2024 hosted in Discord.