Oct 11, 2022

10 min read

Moonwell Developer Grants Are Now Available!

Moonwell is an open lending and DeFi protocol built on Moonbeam and Moonriver, and is the largest DeFi protocol by TVL in the Dotsama ecosystem. The Lunar Technology Foundation is responsible for fostering the development of the Moonwell protocol and its ecosystem, similar to the role that the Moonbeam Foundation plays in the broader Moonbeam ecosystem.

In support of this goal, the Lunar Technology Foundation has allocated 10% of the total WELL supply, or 500M WELL tokens, to long-term protocol and ecosystem development. This allocation is now available to high-quality developers, builders, and other Moonbeam and Dotsama ecosystem projects that would like to contribute to the Moonwell protocol and its broader ecosystem.

Governance and Grants

One overarching goal of the Moonwell community has been to create infrastructure that will stand the test of time and outlive any contributing team or individual. With the recent launch of Moonwell Artemis Governance, the Moonwell community now has a robust, decentralized process that allows WELL token holders to vote on the merits of a given grant proposal, and if the proposal receives enough affirming votes, the grant funding can be automatically distributed to the proposal author or any team of contributors.

The Grant Application Process

The process to receive a grant or implement improvements to the Moonwell protocol starts with a proposal, known as a Moonwell Improvement Proposal, or MIP. In general, proposals should start with a post in the Moonwell Governance Forum. Anyone can register for an account on the forum, and all discussions are publicly available. The community welcomes thoughtful proposals and discourse about those proposals from everyone, whether or not they are a WELL token holder.

Snapshot Voting

For grant proposals that will require a sizable budget, or implement substantial changes to the Moonwell protocol, it is recommended that the proposal author first gauges community interest by capturing a “signaling vote.” Signaling votes are non-binding, since they don’t have the ability to directly transfer funds; however, they are a valuable means of measuring sentiment on substantive issues as well as garnering feedback to iterate and refine grant proposal ideas.

A snapshot voting portal is now live, where signaling proposals can be created by any WELL holder or delegate that meets the threshold of 200,000 votes (i.e., 200,000 WELL tokens). Signaling proposals will be considered to have passed if they receive a majority of Yay votes and reach a minimum quorum of 10,000,000 votes (i.e., 10,000,000 WELL tokens). These thresholds can be modified in the future by means of a community vote.

While this is not required, it is recommended that any proposal requesting a grant of 1 million or more WELL tokens start with a signaling vote. This can be a valuable way of gathering community feedback to help improve the grant proposal and give it a stronger likelihood of passing when it is put up for an on-chain vote.

Creating a Grant Proposal

Moonwell Improvement Proposals possess both a description and code that will be executed on the Moonbeam network following its passage. For grants, there is a proposal creation tool that will make this easier, so proposal authors won’t need to generate the code themselves. The Governance Portal aims to make it easy to create, browse and vote upon MIPs that are currently undergoing active voting. You must have at least 400,000 votes delegated to your wallet in order to create a proposal. When you connect your wallet to the governance portal, if you have at least 400,000 voting power, a button will be visible that enables you to submit a new proposal:

Click the button to Submit a New Proposal, then select “Request a Grant:”

Next, add one or more Grant Beneficiaries and click the “Next: Proposal Details” button:

The Grant Details page allows you to write the text of the grant proposal in a human-readable format known as Markdown. The “Pop Out Editor” link in the top right corner will enable you to use your entire browser window to edit the proposal in a more user-friendly way.

After finalizing the text of your proposal, click the “Next: Preview & Submit” button:

You’ll notice that the actual smart contract calls that will transfer WELL from the Moonwell DAO to grant beneficiaries are at the top of your proposal, with your proposal text/Markdown below. This is your last chance to review your proposal before submitting it on-chain. Please be aware that you will need a small amount of GLMR in your wallet to pay the fees to submit your proposal on-chain.

Voting on Grant Proposals

At this point, once the proposal is created, the Moonwell community can then vote on the grant proposal. The full proposal process is illustrated in the diagram below. Note that this is different from Snapshot Voting mentioned above, and has a higher proposal creation threshold, as the vote is binding on-chain.

Voting Period

The initial voting period is 3 days, during which any wallet with voting privileges (i.e., any wallet with WELL tokens (either vested or unvested) or stkWELL) can register a vote of Yay, Nay, or Abstain. At the end of the voting period, a proposal will be considered to have succeeded if it meets the following criteria: it has received a majority of Yay votes (i.e., the number of Yay votes is greater than the number of Nay votes), and a quorum of at least 100,000,000 total votes (i.e., 100,000,000 WELL tokens). The quorum threshold includes all Yay, Nay, and Abstain votes, but Abstain votes will not be counted when determining whether the proposal has passed. Therefore it is possible for Abstain votes to assist a proposal in reaching quorum and passing successfully, even if the total proportion of Yay votes does not make up the majority of all votes cast. If a proposal does not reach both the quorum and Yay votes greater than Nay votes requirements during the 3 day voting period, it will be considered defeated and will not be executed.

Timelock

After a grant proposal succeeds, it will be queued in the Timelock, which introduces a mandatory 24 hour delay before the proposal will be executed, at which point the WELL will be transferred to grant beneficiaries.

Execution

Once the Timelock delay has elapsed the proposal can now be executed by any account on the Moonbeam network, at which point all of the operations included in the proposal will be performed.

What Makes a Good Proposal?

While this is hard to quantify and is quite subjective, there are some general guidelines that can help grant proposal authors create more meaningful and substantial proposals that have a higher likelihood of successfully passing through governance and being awarded to grant beneficiaries. Here are some general guidelines that can help you to create grant proposals that may have a higher likelihood of success:

Clearly Articulate the Value to the Moonwell Ecosystem

Grant proposals should clearly and plainly state the value to the Moonwell ecosystem. Good proposals should plainly state what they will accomplish, and how that will benefit the Moonwell protocol and help bring value to the broader ecosystem. Building infrastructure and public goods can drive value to the greater Moonwell and Moonbeam ecosystem, and the proposal should clearly lay out the reasoning so that voters can decide whether the grant proposal is a net benefit to the Moonwell community.

Have Milestones and Clear Deliverables

Quality proposals generally have milestones that are realistic and clearly spell out what will be delivered to the community on these milestones. If your grant proposal isn’t clear about what exactly will be delivered to the community, it will likely have a high probability of being defeated during voting. WELL token holders will want to know exactly what will be delivered, and how long it will take to be developed.

Do You Have a Working Prototype or Demo?

The strongest grant proposals have a working prototype or demo accompanying them. If you’ve already developed a similar project in another ecosystem, include a link to the project so that the Moonwell community can see the quality of your work. A working prototype can help the community to understand that you have a high likelihood of successfully delivering the improvements in your proposal, where proposals that come from previously unknown authors without a prototype or demo may have a lower likelihood of success. Even if you haven’t developed a similar prototype yet, include a link to other similar projects in your portfolio that demonstrate your expertise and ability to deliver results.

Consider Splitting Larger Grant Proposals into Multiple Proposals

If your grant proposal is significant in size or will take multiple months to complete, consider splitting it into multiple parts. For example, a 6 month grant proposal could be split into 3 separate proposals, with the first proposal providing enough grant funding to deliver the first part of the project in 60–90 days, and clear communication about what milestones will be delivered before the next grant proposal will be submitted and progress towards the next milestone or deliverable will begin. This allows the community to feel more confident that they will see tangible results before allocating the remaining grant budget, and presents less risk of non-delivery.

Use the Governance Forum and Signal Votes to Gauge Interest

The Moonwell community strongly recommends that grant proposal authors use the governance forum to gauge community interest in your project before submitting a formal grant proposal. This will allow you to get direct feedback from the Moonwell community and, assuming such feedback is incorporated, will likely give your proposal a stronger likelihood of successfully passing.

Projects and Areas of Interest

The Moonwell community is interested in seeing grant proposals that improve the following areas of the Moonwell protocol. Although this is not intended to be an exhaustive list, this may give the community some ideas about what might be broadly useful to help the Moonwell ecosystem improve:

Projects that integrate with Moonwell collateral tokens — mTokens, or Moonwell collateral tokens, represent supplied assets to the Moonwell protocol, and accrue interest from lenders. They can be used in place of an underlying asset in other DeFi protocols, which allows users of your application to earn lending interest while using the collateral for other purposes.
Tooling and infrastructure for institutional liquidity providers — Many institutional LPs would potentially benefit from infrastructure and tooling that makes it easier for them to safely and securely manage their Moonwell positions. This could include Safe apps and plugins (that integrate with Gnosis Safe).
“Deposit from anywhere” — XCM and other messaging technologies like Wormhole, Axelar, and LayerZero create the potential to dramatically reduce friction for users that have assets on other parachains or Ethereum, Solana and Cosmos ecosystem networks, but the bridging experience is far from user friendly. Do you have a creative solution for this problem? The Moonwell community is very interested in making the supply and borrow experience seamless no matter which L1 you are on or wallet you use.
Improvements to the Safety Module — The Safety Module could be improved in many ways, including the ability to support multiple staking reward tokens.
Improvements to Moonwell Governance that would encourage greater participation.
Tools to help visualize positions, risk, or other neat data.
Better integrations with native wallets within the ecosystem (Talisman, Subwallet, etc).
Discord bots to monitor governance proposals/votes or large position movements.
An “Autonomous Proposal” system which would allow decentralized/uncoordinated proposals to garnish support and stand by themselves.
A delegate portal similar to https://sybil.org/#/delegates/compound, which would allow people to pitch delegations and show a history of their votes (bonus points for email alerts).
Uplifts/tools that result in the Moonwell protocol being a better DeFi “lego”.
The creation of isolated Money Markets for riskier long tail assets. Users would have the ability to lend and borrow these lower-tiered tokens but would be unable to collateralize them. This would allow the protocol to quickly expand its support for additional tokens, without putting the entire protocol at risk.
Updates to the current liquidation model. Currently, there is a 50% Close Factor implemented, signifying that liquidators are able to pay off 50% of an underwater loan. A change to a dynamic close factor would allow liquidators to only pay back the percentage of a borrow needed to bring the borrower back up to a target health factor. The fixed liquidation incentive of 7% could also be updated to a dynamic rate. Large borrows require a smaller liquidation fee to incentivize liquidators. A dynamic rate would increase capital efficiency and create a better experience for the end user.
The creation of a liquidation protection mechanism that could alert the user and auto-supply assets from their wallet / auto-repay active borrows upon their health factor falling to a designated level.

Note: This is not intended to be an exhaustive list. Please propose your own unique idea!

About Moonwell Artemis

Moonwell Artemis is an open lending and borrowing DeFi protocol built on Moonbeam, and is supported by the Lunar Technology Foundation, which is responsible for fostering the development of the Moonwell protocol and its ecosystem.