Moonwell enables multichain governance for WELL token holders
In brief
- Moonwell adopted xERC20 standard (xWELL) to unify governance across Base, Optimism, Moonbeam, and Ethereum
- WELL holders stake tokens in Safety Module to earn stkWELL and voting power
- Recent MIP votes connected Ethereum mainnet to xWELL bridge and streamlined governance participation
xWELL: Portable governance across chains
Moonwell's solution hinges on the xERC20 token standard, branded as xWELL, which treats the token as a single, portable asset regardless of which chain it sits on. This eliminates the fragmentation problems that arise when tokens are wrapped differently across networks.
Community proposals leading to the xERC20 upgrade began in early 2024, specifically aimed at eliminating the complications from wrapped token implementations on different chains. The shift represents a structural change to how Moonwell's governance operates at scale.
How governance works on Moonwell
Governance on Moonwell operates through Moonwell Improvement Proposals, or MIPs. These are the formal mechanism through which the community proposes changes, votes on them, and executes results on-chain.
Holders who want voting power can stake their WELL tokens in Moonwell's Safety Module, receiving stkWELL in return. Stakers face slashing risks of up to 30% in shortfall events, meaning if the protocol suffers a significant loss, staked tokens can be partially liquidated to cover protocol deficits.
Recent governance milestones
The most notable recent development is MIP-X55, which was approved following a vote that ran from May 13 to May 16. This vote connected the Ethereum mainnet to the xWELL bridge, expanding the protocol's reach.
Following MIP-X55, the protocol is pursuing MIP-X58, which aims to streamline governance activity directly within the Ethereum ecosystem, reducing steps and friction involved in participating. These incremental improvements reflect Moonwell's focus on making multichain governance more accessible.
