Moonwell

Overview

Moonwell currently utilizes Compound’s GovernorAlpha smart contract, which has been widely used and trusted by many communities over the years for protocol governance. However, its single-chain architecture has limitations that prevent it from offering a seamless, cross-chain experience. As things stand today, WELL tokenholders on Base cannot participate in governance unless they bridge their tokens back to Moonbeam. Following Moonwell’s recent expansion, there have been numerous calls from community members to solve this UX issue and enable voting and staking directly on Base. To meet this need and future-proof our governance architecture, my team at Solidity Labs has developed a new multichain governor that aims to provide a more flexible and scalable solution. This proposal, MIP-M23, is the first of two MIPs required to migrate the protocol to the new governor system contracts. In this proposal, we will deploy the new governor contracts onto Moonbeam mainnet and transfer governance powers from the current governor to the new, multichain governor. Shortly following this proposal, MIP-24 will be submitted, which will accept ownership of the contracts and finalize the new governor’s abilities. By implementing this new multichain governance model, we aim to provide the community with a more accessible and intuitive way to participate in the decision-making process, regardless of preferred network. This upgrade will not only cater to the needs of our growing community, but also solidify Moonwell’s position at the forefront of onchain governance innovation.

System Parameters

To ensure a smooth transition and maintain consistency with the current governance model, the parameters for this new system are set to be as close to the existing governor’s as possible. However, one notable exception is the proposal creation threshold, which has been increased from 400,000 to 1,000,000 WELL. This adjustment was made to account for the increase in the circulating supply of WELL tokens since the inception of Moonwell Governance in 2022.

Starting System Parameters

• Quorum: 100,000,000 WELL
• Voting Period: 3 days
• Maximum Live Proposals per Address: 5
• Pause Duration: 30 days
• Proposal Threshold: 1,000,000
• Cross-Chain Vote Collection Period: 1 day

Constant Values

• Minimum Cross-Chain Vote Collection Period: 1 hours
• Maximum Cross-Chain Vote Collection Period: 14 days
• Minimum Proposal Threshold: 400,000 WELL
• Maximum Proposal Threshold: 50,000,000 WELL
• Minimum Voting Period: 1 hours
• Maximum Voting Period: 14 days
• Maximum User Proposal Count: 20
• Maximum Quorum: 500,000,000
• Minimum Gas Limit = 400,000

Under this new multichain governance model, a proposal becomes executable after a total of four days, with no voting delay. Once a proposal has been created, voting can begin immediately. After the voting period concludes, the cross-chain vote collection period begins, during which vote counts from all other networks, including Base, are tallied. If a proposal reaches the quorum requirement and receives more “yes” votes than "no’’ votes, it becomes executable.

The constant values serve as a floor and ceiling for acceptable system parameters, preventing the governor contract from being incorrectly parameterized in obviously incorrect ways. System parameters can be adjusted by the community through onchain voting, but the values must remain between these boundaries. This safeguard ensures that the governance process remains stable, secure, and aligned with the best interests of the Moonwell community.

Implementation

Once the new contracts have been deployed and initialized, it is necessary to transfer governance powers from the current governor to the new, multichain governor. As part of this proposal, the following onchain actions will be implemented:

• Set pending admin on all mToken contracts
• Set pending admin on the Comptroller
• Set Chainlink price oracle admin
• Set Wormhole Bridge Adapter pending owner
• Set xWELL pending owner
• Set trusted sender in Temporal Governor
• Set the Staked Well emission manager
• Set the Ecosystem Reserve Controller owner
• Set the the Proxy Admin owner

By completing these actions, the new multichain governor will assume governance powers over the Moonwell Protocol, enabling cross-chain governance and user participation from Base.

Security

Multiple security measures were employed to verify the new code and achieve internal confidence in its robustness. The following are the testing methodologies and security measures employed:

• Static analysis with slither
• Extensive unit testing
• Integration testing of the new governor and proposals to ensure ownership of system contracts are handed to the new governor
• Integration testing of the deployment script
• Mutation testing to understand the strength of the test suite
• Formal verification of key governance invariants, ensuring strict minimum and maximum values for parameters are always enforced
• Multiple internal code reviews
• A week-long audit by Kauz Security Services, which found no high or medium issues
• A 3.5-week audit by Halborn, which also found no high or medium issues

Governance Guardians

The Governance Guardian role, previously known as the Break Glass Guardian, serves as a crucial safeguard mechanism within the new multichain governance model. In the event of an emergency or unforeseen circumstance, the Governance Guardian role has the ability to "break glass” and roll back governance ownership to a predetermined address, which will be set to the current governor contract. It is important to note that the break glass function can only be used once and must be restored through an onchain governance vote. The Governance Guardians will sit on a 3 of 4 multisig. I nominate myself to be one of the four Governance Guardians, recognizing the importance of this responsibility and my commitment to the long-term success and health of Moonwell. The complete list of signers is currently being determined, with a focus on selecting individuals and entities who have demonstrated expertise, integrity, and dedication to the Moonwell Protocol and community. An additional signer will be added in the near future to further increase the security of the multisig and ability to respond.

The complete list of signers is as follows:

1. Luke Youngblood (Lunar Labs)
2. X0s0l
3. Coolhorsegirl
4. Elliot Friedman (Solidity Labs)

Mutichain WELL (xWELL)

xERC20 is a token standard that creates a natively multichain ERC20 token. This token enshrines rate limits to bridge providers and has the ability to change, or support multiple bridge providers at will. Through the passage of this proposal, Moonwell will adopt this new token standard, allowing for staking and governance participation on Base, as well as any future network. At launch, the xERC20 version of WELL, which I will call xWELL for the purposes of this proposal, will leverage Wormhole’s General Message Passing (GMP) infrastructure to send information on user transfers between chains. With the creation of xWELL, users will be able to participate in governance and stake their tokens directly on Base, empowering them to actively contribute to the protocol’s security and decision-making process from their network of choice.

Currently, liquidity incentives on Moonwell’s Base markets are paid out in the Wormhole wrapped version of WELL. With the passing of this proposal, xWELL will be introduced as a reward token on all Base markets. Initially, the configurations will provide users with no xWELL rewards; however, Warden Finance, serving as the emissions admin, will have the authority to enable xWELL rewards after the next emission cycle concludes in April. From that point forward, xWELL will replace the original Wormhole Wrapped variant as the primary reward token.

xWELL Security

Throughout the development of xWELL, a multitude of testing methodologies were employed to foster a high level of confidence in its security prior to launch. The following are the testing and security measures employed:

• Unit Testing
• Integration Testing
• Invariant Testing
• Formal Verification of key system properties
• A multi-week long Halborn Audit which reviewed the xWELL token and the Wormhole Bridge Adapter.

xWELL Parameters

The xWELL token will have the following parameters for the Wormhole Bridge Adapters to limit throughput and increase security.

• Buffer Capacity: 100,000,000 xWELL on each chain.
• Buffer Replenish Rate: 1,158 xWELL per second. This rate is equivalent to 100,000,000 xWELL per day and allows the midpoint to be reached within 12 hours if the buffer is fully depleted or replenished.

The buffer depletes on minting, and replenishes on burning. The buffer is designed to limit the creation of xWELL on each chain, ensuring that the rate of minting and burning is controlled and secure. These parameters will likely be lowered in the future once the initial token amounts have been moved across chains.

Conclusion

The migration to a multichain governance model marks a pivotal moment in the evolution of Moonwell. By addressing the growing needs of our community and enabling onchain voting from Base, we are taking a significant step towards building a more inclusive, flexible, and future-proof governance structure.