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.
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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.
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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.
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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.
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