Moonwell DAO Constitution
This Constitution outlines the framework for governing the "Moonwell Protocol” (as defined below) by holders of the WELL Token (each, a “Tokenholder”, and collectively, the “Moonwell DAO”). Defined terms in this Constitution have the meaning ascribed to those terms in the Bylaws of the Foundation (as defined below), as amended from time to time, unless otherwise defined in this Constitution.
Some of the rules and procedures in this Constitution will be enforced directly onchain, and some will not. Actions taken under this Constitution may be onchain or off-chain actions. Onchain actions are those that are actuated directly by the governance parameters of the DAO as transactions on a blockchain network. Off-chain actions are those that are actuated by other means. This Constitution also includes some "recommended guidelines'' which are non-binding but strongly recommended as governance best practices.
This Constitution is a living document, established as the foundational framework for the self-governance of the Moonwell Protocol. Amendments to this Constitution can be proposed and ratified through the Moonwell Improvement Proposal (MIP) Process, ensuring that changes reflect the consensus of the WELL token holders. This first edition has been crafted in collaboration with the Moonwell Foundation, active contributors to the Moonwell Protocol and delegates of the Moonwell DAO. The adaptability of this Constitution is not just a feature but a commitment to progressive decentralization and continuous improvement, embodying the innovative and inclusive spirit of the Moonwell DAO and community.
1. The Protocol
The Moonwell Protocol is an open and decentralized lending and borrowing protocol, currently deployed on the Base and Moonbeam networks, that enables users to easily lend and borrow digital assets in a permissionless and trustless manner. The Moonwell DAO can direct changes and updates to the Moonwell Protocol smart contract codebase through the MIP Process (as defined below). Nearly anyone can access the Moonwell Protocol. The Foundation (defined below) maintains a browser-based GUI facilitating easy access to the protocol’s smart contracts at https://moonwell.fi.
2. The Foundation
The Moonwell Foundation, a Cayman Islands foundation company (the "Foundation"), has been formed to serve the Moonwell DAO. The Foundation aims to facilitate the growth and development of the Moonwell Protocol and its ecosystem. The Foundation has adopted Bylaws and other required formation documents, necessary to establish the Foundation’s initial governance structure.
2.1 Bylaws
The Foundation’s Bylaws detailing the underlying governance structure for the Foundation can be found at https://docs.moonwell.fi/.
2.2 Formation Documents
The Foundation’s formation documents, including the Amended and Restated Memorandum of Association and Articles of Association (the "A&R M&A') can be found at https://docs.moonwell.fi/.
3. Code of Conduct
All Moonwell DAO members are expected to adhere to the following Code of Conduct:
Respect: Treat all individuals with respect, dignity, and empathy, regardless of their background, identity, beliefs, or role in the Moonwell DAO. Foster a welcoming and inclusive environment that encourages diverse participation and perspectives. Harassment, discrimination, hate speech, and personal attacks will not be tolerated.
Integrity: Act with honesty, transparency, and accountability in all interactions and transactions related to Moonwell. Do not engage in fraud, deceit, misrepresentation, or other unethical behavior. Disclose any potential conflicts of interest and prioritize the interests of the Moonwell DAO above personal gain.
Collaboration: Foster a spirit of open collaboration, knowledge-sharing, and mutual support within the Moonwell DAO. Contribute constructively to discussions and decision-making processes, and respect the outcomes of community governance. Offer assistance and mentorship to others where possible, and avoid actions that undermine the community's collective success.
Compliance: Adhere to all Applicable Laws and regulations in your participation in the Moonwell DAO. Do not engage in illegal activities or enable others to do so through the Moonwell DAO.
Privacy: Respect the privacy and confidentiality of others' personal information, intellectual property, and sensitive data shared within the Moonwell community. Do not disclose such information without explicit permission, except as required by law. Use appropriate security measures to protect the confidentiality and integrity of data entrusted to you.
By participating in the Moonwell DAO, you agree to uphold this Code of Conduct in letter and spirit. It is the responsibility of all community members to create a culture of integrity, respect, and innovation that embodies the best of onchain finance. The Code of Conduct may be amended from time to time through the established MIP process as the community evolves.
4. Community Values
As the guiding values of the Moonwell DAO and community, we strive to embody:
Safety and Security: Moonwell prioritizes user safety and security, instilling trust by adhering to the highest security standards. We believe that doing things the right way leads to long-term success and credibility.
All in on Onchain: The Moonwell community shares Base's vision of blockchain technology being the most important developer platform since the Internet. We believe in the power of open-source, globally available, and free-to-use onchain protocols and the public goods that power them.
Decentralization: Moonwell contributors are committed to building decentralized solutions that empower individuals, promote transparency, and reduce reliance on third parties. Decentralization lies at the heart of our mission to create a more equitable, resilient, and secure financial ecosystem.
User-centric Design: Moonwell prioritizes user experience by designing products with an intuitive UI/UX, meeting people where they are, and offering layers of abstraction that cater to different levels of expertise. Our goal is to build products that spark joy and inspire users to explore onchain.
Collaboration: Moonwell values partnerships and collaborations that align with our community’s core values, working together to create a more inclusive and connected onchain economy. Broader collaboration enables us to reach more users, accelerate innovation, and enhance our product offerings.
Innovation: Moonwell encourages experimentation, creative problem-solving, and the pursuit of new ideas. We cultivate a culture of innovation, where contributors are empowered to explore and develop cutting-edge solutions that drive the industry forward.
Education: Moonwell develops educational materials for diverse audiences, breaking down complex concepts into digestible content. By empowering users with knowledge, we enable them to make informed decisions and harness the full potential of our products.
Inclusivity: Moonwell strives to make the onchain economy available to users across the globe, regardless of their location, language, or level of expertise. We actively work on translations and community outreach to foster a diverse and welcoming environment.
Community-Driven Development: Moonwell believes in the power of community-driven development. Moonwell contributors actively engage with ecosystem neighbors and the broader community, incorporating their feedback and insights into the product development process. This approach helps the Moonwell community build products that resonate with users and address their most pressing needs.
Transparency: Moonwell values open communication and transparency, fostering a community where information is readily available, and honest discussions can take place. We believe that this approach encourages trust, collaboration, and continuous improvement.
With these guiding principles at the forefront of our endeavors, the Moonwell DAO is devoted to creating a brighter and more equitable financial future for everyone.
5. DAO Governance
WELL Tokenholders govern the authorization and management of the Moonwell Protocol. The Moonwell DAO may authorize the activation of additional deployments of the Moonwell Protocol through onchain voting. Governance over these deployments includes administrative actions, protocol and code updates, new market activations, and upgrades to associated Moonwell Protocol smart contracts.
6. Moonwell Improvement Proposals (MIPs)
Moonwell Improvement Proposals ("MIPs") are the primary mechanism for enacting changes to the Moonwell Protocol and the Moonwell DAO’s governance procedures. MIPs serve as a means of fostering community discourse and collective decision-making within the Moonwell DAO.
The MIP Process consists of the following stages (the “MIP Process”):
6.1 Ideation
Ideas for protocol improvements, new features, integrations, governance changes, and asset listings are initially discussed on the Moonwell Governance Forum (as designated by the Foundation from time to time which currently is the website located at the following link: https://forum.moonwell.fi). The author(s) are encouraged to engage in active dialogue with the community to refine their ideas and gauge early feedback. Well-developed ideas with strong community support should proceed to the proposal drafting stage.
6.2 Proposal Drafting
Proposers prepare a detailed MIP draft using the template provided below (the “MIP Framework”). Key components of an MIP draft include:
Title and Category:
Title should begin with “MIP-XYY”
MIP signifies Moonwell Improvement Proposal
X represents the network name
B for Base, M for Moonbeam
MIPs for future deployments should also adopt this standard
YY represents the proposal number, in chronological order
Example: MIP-M40
This MIP would be the 40th MIP for the Moonbeam Network deployment of the Moonwell Protocol.
Summary: A brief overview of the proposal, no more than a single paragraph.
Key Terms: Definitions of terms specific to the proposal or industry related jargon.
Motivation: Explanation of the motivation behind the proposal. Highlight key points on how the proposal will improve the Moonwell Protocol and benefit the Moonwell DAO.
Implementation: Present the implementation of the proposal and specify the exact changes you are proposing. If you are proposing a change to Moonwell Protocol smart contracts, present the code here.
Voting: Define what a “Yay” and “Nay” vote entails. If there are any Snapshot votes or forum polls associated with this proposal, please attach the corresponding links.
Drafts should be posted to the Moonwell Governance Forum for further discussion and iteration. The author should consider incorporating feedback received from the community and may alter the above template if necessary to communicate effectively.
6.3 Proposal Discussion
Once proposals have been posted to the forum, they should initially stay open for community discussion for a recommended period of seven (7) days (the “Discussion Period”). While proposal authors can submit an MIP directly onchain without prior forum discussion, it is recommended that token holders consider voting against such proposals to enforce a more democratic Discussion Period. Some types of proposals that are published at regular intervals, such as risk parameter updates, may have a shorter discussion period, in order to balance the length of discussion against the need to update risk parameters in a timely manner to reduce risk.
The Moonwell Foundation will appoint a service provider that will be responsible for tracking when an MIP Discussion Period has started and determining when a proposal is ready to move to onchain MIP voting (the "MIP Editor"). The MIP Editor will monitor the discussion thread, ensure that the proposal meets the required standards, and assess whether the community has had sufficient time to provide feedback and suggestions.
Once the Discussion Period has concluded and the MIP Editor has stated that the proposal is ready for onchain voting, they will post an update on the governance forum, indicating that the proposal is now eligible for submission. This post will serve as a signal to the proposal author and the wider community that the MIP can proceed to the next stage of the governance process.
The MIP Editor will also be responsible for providing guidance and support to proposal authors, helping them refine their ideas, and ensuring that MIPs are properly formatted and contain all the necessary information. They will act as a liaison between the community and the Moonwell Foundation, facilitating effective communication and collaboration throughout the MIP process.
6.4 Signal Voting
As a supplement during the “Discussion Period” and prior to onchain MIP submission, proposal authors are encouraged to conduct off-chain signal voting to gauge community sentiment and gather preliminary feedback. This non-binding voting process allows for early insights into the proposal’s potential acceptance and may highlight potential areas for improvement.
Objective: Off-chain signal voting aims to provide a lightweight method for community members to express their opinions and preferences regarding ideas, proposals, or new initiatives within the Moonwell Ecosystem.
Platforms: Off-chain signal voting may be facilitated through platforms designated by the Foundation, including but not limited to the Moonwell Snapshot Portal at https://snapshot.moonwell.fi.
Guidelines: Proposal authors should outline the specifics of the vote, including options, duration, and how the results will influence the proposal’s progression. Clear communication regarding the non-binding nature of these votes is crucial.
Incorporating Feedback: While off-chain signal voting outcomes are non-binding, a strong positive response is an encouraging indicator for proceeding to the "Onchain MIP Submission'' stage. Conversely, if the signal vote reveals substantial opposition or concerns, authors should consider revisiting and revising their proposal in consultation with the community before moving forward.
6.5 Onchain MIP Submission
Proposals should be submitted for onchain voting (as defined below) once the Discussion Period is complete. The Moonwell DAO currently has a 1,000,000 WELL token requirement for proposal submission by the community. Any token holder who meets this proposal threshold may submit their proposal for onchain voting. If a token holder does not meet the minimum token threshold for submitting proposals, they may work with someone who does to submit the proposal on their behalf or ask the DAO for WELL delegations.
6.6 MIP Resubmission
If an MIP fails to pass the onchain voting process, it can be resubmitted for another round of voting after incorporating feedback from the community and making necessary changes. When resubmitting an MIP, the following guidelines should be followed:
Include a link to the original MIP and a summary of the changes made in the resubmitted version.
Clearly state the reasons why the original MIP was not approved and how the resubmitted version addresses those concerns.
Highlight any additional information or updates that have been added to the proposal to make it more compelling or feasible.
Follow the same MIP template and submission process as outlined in sections 6.2 to 6.5.
As a general recommendation, resubmitted MIPs should demonstrate meaningful improvements and address the key feedback points raised during the previous voting round. This will help build community support and increase the chances of the proposal being approved in the subsequent vote.
6.7 Voting
Tokenholders will be allowed to vote on MIPs for three (3) days (the “Voting Period”). MIPs can be voted upon via the Moonwell Governor smart contract on Moonbeam or from the Governance section of the Moonwell Application: https://moonwell.fi/governance.
6.8 Proposal Requirements
By submitting your MIP to vote in accordance with the MIP Process, you agree to certain conditions, including any requirements under Applicable Laws and regulations and AML/KYC/sanctions processes deemed necessary or advisable by the Foundation.
6.9 Proposal Guidelines
Proposals should not break any of the governing principles of the Foundation (as set out in the Bylaws and this Constitution) and all proposals must strictly adhere to all Applicable Laws and regulations. Furthermore, any actions or initiatives proposed must be within the permissible bounds as set forth by the laws of the Cayman Islands, under which the Foundation operates. Non-compliance or contravention of these legal parameters may result in the immediate rejection or invalidation of the proposal.
Proposals that do not adhere to these guidelines may not be considered or may be vetoed by the Security Council. It is essential to review and ensure alignment with the Foundation's governing principles and legal constraints before submission. The MIP Editor may assist proposal creators in adhering to these guidelines.
6.10 Voting Parameters
The voting parameters for Tokenholders are as follows, which may be subject to further changes in accordance with an MIP related to the governance process (the “Voting Parameters”):
Voting Period: 3 days. The Voting Period is the time period during which people can cast “Yes”, “No”, or “Abstain” votes.
Vote Collection Period: 24 hours. The Vote Collection Period takes place after the Voting Period has ended and before the proposal is executed onchain. This Vote Collection Period ensures that all votes from external networks have been collected and counted toward the final voting totals. It also serves as a 24-hour delay before proposal execution, to give the community time to adjust to any changes introduced by a successful proposal.
Cross-chain Timelock Period: 24 hours. MIPs destined for execution on Base or other networks besides Moonbeam need to be executed remotely using Temporal Governance. For these “Cross-chain MIPs”, an additional 24 hour “Cross-chain Timelock Period” follows the Vote Collection Period and must be observed before proposal execution on the destination network.
Proposal Threshold: 1,000,000 WELL. The Proposal Threshold is the minimum number of tokens a holder must have, or be delegated by third parties, to submit an MIP for an onchain vote of the Moonwell DAO).
Quorum: 100,000,000 WELL. Quorum is the minimum number of total votes cast on an MIP required for it to pass successfully.
Note: The above values, time periods, and thresholds may be modified by token holders through the governance process itself.
6.11 Implementation Period
Onchain Actions
Onchain proposals may be queued and later executed in Temporal Governance, or executed on Moonbeam by anyone immediately following the conclusion of the Vote Collection Period and/or Timelock Period(s).
In rare circumstances, Foundation Directors may exercise veto authority in accordance with Applicable Law or for other reasons including inconsistencies with the Foundation’s purpose as set out in the Foundation’s Bylaws and Memorandum and Articles of Association. If any Foundation Director exercises their veto authority, disclosure and explanation for the veto shall be posted on the relevant MIP forum post within two (2) weeks of the proposal passing.
Signal Votes
Due to the nature of Signal Votes, which are non-binding, a successful proposal should be considered a recommendation, rather than a mandatory requirement to take action. Any actions or requests contained in such a proposal will only be taken under advisement by Foundation Directors, who have sole discretion to undertake such requests, or take no action. Signal Votes, by their very nature, are non-binding and in almost all cases should be followed by an onchain proposal.
6.12 Voting Power
One (1) WELL token or one (1) stkWELL token equals one (1) vote over any proposals submitted to the Moonwell DAO (the “Voting Power”). This will allow token holders to participate in the governance process proportionally to their holdings.
Token holders have governance power over components of the Moonwell Protocol such as WELL Treasury management to allocate WELL Tokens for protocol development and community growth, Protocol Reserve management and utilization, and other onchain updates including the ability to adjust protocol and governance parameters outlined on https://docs.moonwell.fi/moonwell/protocol-information/protocol-information/asset-risk-parameters and https://docs.moonwell.fi/moonwell/governance/governance/parameters.
6.13 Amendments to Governance
The MIP Process, Voting Parameters, Voting Power and all other governance mechanisms can be amended or modified through the MIP process. The above describes only the current state of governance mechanics. The community is encouraged to decide the future state of governance, the Moonwell DAO and the Moonwell Protocol.
7. Grants and Funding
The Moonwell DAO and Foundation are committed to fostering innovation, development, and community engagement through two distinct funding mechanisms:
Community Grants: The Moonwell WELL Treasury provides a decentralized, community-driven funding source for projects and initiatives proposed by anyone in the community with sufficient WELL voting power. These are governed by the WELL token holders through the MIP process.
Discretionary Foundation Grants: The Moonwell Foundation offers targeted grants to support strategic projects, partnerships, and initiatives that align with its mission. These grants are awarded at the Foundation's discretion based on their potential impact.
Together, these complementary funding mechanisms support a broad spectrum of contributions to the Moonwell ecosystem, from grassroots community projects to strategic growth initiatives.
7.1 Community Grants
Objective: Empower the Moonwell DAO to propose and fund projects, improvements, and initiatives that directly contribute to the growth and enhancement of the Moonwell Protocol and ecosystem.
Funds:
The Foundation’s WELL Token treasury (the “WELL Treasury”)
Grant Proposal Process:
Ideation - Proposers discuss and refine their grant ideas with the community in the Moonwell Governance Forum to gather initial feedback.
Drafting - Proposers create a detailed Moonwell Improvement Proposal (MIP) using the template in Section 6.2, specifying the project's goals, scope, timeline, budget, payment terms, and key milestones.
Feedback - Proposers share their draft MIPs in the forum for additional community input and refinement before submitting for voting.
Signal Vote - Before proceeding to the onchain MIP voting process, proposers must conduct a non-binding "signal vote" vote using the Moonwell Snapshot portal (https://snapshot.moonwell.fi). This step gauges community sentiment and support for the proposal, and allows for further refinement based on feedback.
Signal Votes should be structured as a single-choice vote with two options:
"Yes" - In favor of the grant proposal moving forward to onchain voting.
"No" - Against the grant proposal proceeding to onchain voting in its current form.
Submission - Once the signal vote passes, proposers submit their finalized MIPs to the Moonwell DAO for formal review and voting, as outlined in Sections 6.6 through 6.10.
Onchain Voting - WELL Tokenholders, via the Moonwell Application, utilize the MIP Process to vote on whether to approve and fund the grant proposal.
Security Council Review - If the onchain vote passes, indicating strong community support, the Security Council will review the grant proposal to ensure that it does not violate Cayman Islands law or involve the transfer of funds to sanctioned nations or entities. If the Security Council determines that the proposal is compliant, it will proceed to the next step. If the Security Council identifies any issues, the proposer(s) should address them before proceeding to resubmit their grant proposal.
KYC/AML - If the grant proposal passes both an onchain vote and Security Council review, the proposer(s) must complete a Know Your Customer (KYC) and Anti-Money Laundering (AML) verification process administered by the Moonwell Foundation. This step ensures compliance with relevant regulations and protects the Moonwell DAO from potential abuse and fraud. The Foundation will review the KYC/AML information and notify the proposer(s) of their eligibility.
Implementation - After successful KYC/AML verification, funds are disbursed to the grant recipient from the WELL Treasury according to the MIP's specified timeline and milestones.
Reporting - Grant recipients should provide regular progress updates to the Moonwell DAO and a final report upon completion on the Moonwell Governance Forum.
7.2 Foundation Grants
Objective: Support strategic initiatives, contributions, and partnerships that accelerate ecosystem growth, infrastructure development, and adoption of the Moonwell Protocol and its ecosystem.
Funds:
USDC and ETH from the Foundation's Administrative Budget Wallets
WELL Tokens from The WELL Treasury
Proposal Process:
Inquiry: Potential grantees submit a brief summary of their project to the Foundation via the designated Moonwell Foundation email address.
foundation@moonwell.fi
Invitation: The Foundation reviews inquiries and invites select applicants to submit a full proposal.
Submission: Invited applicants submit detailed proposals, including scope, impact analysis, team qualifications, milestones, and funding requested.
Evaluation: The Foundation evaluates proposals based on their strategic fit, feasibility, cost/benefit, and potential to drive ecosystem growth. The Foundation may request additional information (which may include KYC/KYB information) or interviews with applicants. The Foundation may also require each grantee to execute an agreement outlining the goals and objectives of the grant to such grantee.
Approval: For grants paid in WELL, the Foundation Directors may engage a service provider or employee of the Foundation to approve and disburse funds. For grants paid in USDC or ETH, the Foundation follows its internal approval process and may engage a service provider or employee of the Foundation to disburse funds.
Announcement: Approved grants are announced to the community on the Moonwell Governance Forum.
7.3 Considerations for Grant Proposals
All grants, whether Community or Foundation Grants, should aim to benefit the long-term health and growth of the Moonwell ecosystem. Grant proposals that include large-scale redistribution of the treasury for non-strategic purposes, such as airdrops to tokenholders without clear ecosystem benefits, are discouraged. Strong proposals will have the following characteristics:
Alignment with the Moonwell DAO and Foundation’s mission and values
Clear and realistic objectives
Detailed execution plans with measurable milestones and deliverables
Reasonable budgets and timelines relative to the proposed scope of work
Qualified individuals or teams with relevant expertise and track records
Sustainable models for maintenance and growth beyond the initial grant period
Open-source, auditable, and reusable outputs that other builders can leverage
Willingness to engage with the community and incorporate feedback
Proposals that do not meet these criteria, or that primarily benefit the proposing individuals or organizations rather than the broader ecosystem, are unlikely to be approved.
The Moonwell DAO and Foundation are particularly interested in funding proposals related to:
Core protocol and smart contract enhancements
Integrations with Moonwell collateral tokens (mTokens)
Tooling and infrastructure for institutional liquidity providers
Usability and UX enhancements for the Moonwell Application
Innovative use cases that expand Moonwell's user base and market share
Educational content and onboarding materials for new users
Community growth and engagement initiatives
However, any proposal that credibly aims to advance the Moonwell Protocol, its ecosystem, and its users will be seriously considered. Prospective grantees are encouraged to discuss their ideas with the community early and often to gather feedback and build support.
8. The Security Council
The Security Council is a committee of the Foundation Company comprising of 5 committee members who are signers on specific Foundation multi-sig wallets, which have powers to perform certain Emergency Actions, as delegated to it by the Moonwell DAO and The Moonwell Foundation, and is responsible for upholding this Moonwell DAO Constitution. Through the submission, approval and implementation of MIP(s), the Moonwell DAO is able to modify the Security Council's composition, powers, or to eliminate the Security Council entirely.
8.1 Emergency Actions
The Security Council has the power to execute any pause functionality, or perform other required actions with no delay in order to respond to a security emergency, should one arise (such actions, "Emergency Actions"). Performing any Emergency Action requires a 3-of-5 approval from the Security Council. The Security Council must not use its power to perform Emergency Actions except in a true security emergency, such as a critical vulnerability that could significantly compromise the integrity, security, or availability of the WELL token, the Moonwell Protocol and the digital assets held within its smart contracts.
After performing any Emergency Action, the Security Council must issue a full transparency report on the forum (at an appropriate time after the security emergency has passed) to explain what was done and why such Emergency Action was justified.
8.2 Security Council Elections
The Security Council has 5 members. The initial Security Council Members have been selected due to one or more of the following qualifications: experience in risk management, experience in blockchain security, smart contract expertise, knowledge of the Moonwell Protocol, and reputation within the Moonwell DAO. The composition of the initial Security Council can be found here. A Snapshot vote will take place May 6th 2024 to ratify the initial Security Council composition.
The first Security Council election is scheduled to begin one year after the release of the Moonwell DAO Constitution (insert date). The date chosen for the first election will form the basis for all future elections. Every election should begin 12 months after the previous election has started.
The DAO may approve and implement an MIP to change the rules governing future Security Council elections, but the MIP Process may not be used to intervene in an ongoing election.
The following timeline governs a Security Council election:
Nominee selection (14 days): Any Moonwell DAO member may declare their candidacy for the Security Council. Nominations should be submitted as a reply to the corresponding Governance Forum post.
Member Election (3 days): Each Moonwell DAO member or delegate may vote for any declared candidate. Each token may be cast for one candidate.
Compliance process (14 days): Newly elected Members will cooperate with the Moonwell Foundation and complete the compliance process. The Moonwell Foundation is responsible for removing any candidates that fail the compliance process. Removed candidates will have their position.
Transition (7 days): The process for electing new Security Council Members from the 5 candidates who received the most votes will be activated. Departing Security Council Members will be rotated off of Security Council multi-sigs, and new Members will be added.
The Moonwell Foundation is allocated 14 days for the Compliance process and it should be executed between the Nominee selection and Member election. The Moonwell Foundation has the flexibility to update its compliance policy for every new election. This is required to allow The Moonwell Foundation to comply with Cayman Island Laws. Furthermore, The Moonwell Foundation maintains the right to issue new procedures and guidelines for off-chain components of the Security Council election. All efforts should be made by The Moonwell Foundation to ensure an orderly, fair, and transparent election.
As a matter of best practice for maintaining an independent Security Council, no single organization should be overly represented in the Security Council. In particular, there should not be more than 2 candidates associated with a single entity being elected to the Security Council, thereby ensuring that there will be no single entity able to control or even veto a Security Council vote.
Furthermore, candidates for the Security Council should demonstrate a strong commitment to the success and integrity of the Moonwell DAO and Foundation. They should be individuals who have a proven track record for contributing positively to the ecosystem, possess the necessary skills and expertise to fulfill their responsibilities, and are willing to prioritize the best interests of Moonwell. Candidates should also be transparent about any potential conflicts of interest and be prepared to address them in a manner that maintains the trust and confidence of the community.
Upon their appointment, each new Security Council Member will be required to sign a formal agreement with the Moonwell Foundation, outlining their roles, responsibilities, and obligations.
All Security Council Members are expected to serve their term until the election is complete and the new Security Council Members are installed. In the event that a Security Council member resigns before the end of their term, or an elected nominee fails their compliance check, the following process will be followed:
The remaining Security Council Members will nominate a replacement candidate within 14 days of the vacancy occurring.
The nominated candidate will be put forward for onchain vote by WELL token holders and MFAM Tokenholders, using the standard MIP voting process.
If the nominated candidate receives a majority vote in favor in both Moonwell DAO governance and Moonwell Apollo DAO governance, they will serve the remainder of the term of the Security Council member they are replacing.
If the nominated candidate does not receive a majority vote, the nomination and voting process will be repeated until a replacement is elected.
Security Council Members may only be removed prior to the end of their terms if either of two conditions are met:
MIPs are passed in accordance with the MIP Process pursuant to which a majority of WELL Tokenholders and a majority of MFAM Tokenholders vote in favor of removing a Security Council Member;
At least three (3) of the Security Council Members vote in favor of removal.
The seats of any Security Council Members who have been removed prior to the end of their respective terms shall remain unfilled until the next election that such seats are up for appointment, unless otherwise replaced prior to such next election by a vote of at least three (3) of the Security Council Members, in which case such seat shall be up for appointment at the next such election. The Security Council may not re-appoint a removed member and they can only be re-elected via the election voting system. There must always be at least three (3) active Security Council Members. In the event that more than two (2) Security Council Members are removed, resulting in the total number of active Members falling below the minimum requirement of three (3), the following emergency procedures shall be followed to ensure that the position(s) can be filled immediately:
Emergency nomination and appointment (24 hours): The remaining Security Council member(s) shall nominate and appoint a temporary replacement(s) within 24 hours of removal. The nominated candidate(s) must meet all the eligibility criteria and undergo an expedited compliance process.
Ratification vote (72 hours): The temporary appointment(s) shall be put to Moonwell DAO and Moonwell Apollo DAO Snapshot ratification votes within 48 hours of the initial nomination. Each Moonwell DAO member and Moonwell Apollo DAO member or delegate may vote to either confirm or reject the temporary appointment(s).
Confirmation or replacement: If the temporary appointment is ratified by a majority vote in both the Moonwell DAO and Moonwell Apollo DAO, the newly appointed member(s) shall serve on the Security Council until the next scheduled election. If the temporary appointments are rejected, the remaining Security Council member(s) shall nominate and appoint new a candidate(s), and the ratification vote process shall be repeated until the appointments are confirmed.
Transition (24 hours): The newly appointed Security Council member(s) shall be added to the Security Council multi-sigs within 24 hours of their confirmation, ensuring a smooth transition and maintaining the minimum requirement of 3 active Members.
By implementing these emergency procedures, the Moonwell DAO can ensure that the Security Council remains operational and responsive, even in the face of unexpected member removals. The expedited nomination, appointment, and ratification processes allow for quick action to fill vacant positions, while still maintaining the democratic principles of the Moonwell community. This approach balances the need for swift decision-making with the importance of maintaining the integrity and accountability of the Security Council.
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