Governance
Lendscape's governance system is designed to ensure decentralized decision-making and community participation in the platform's development and management. The governance mechanisms are built around the $MBASE token, which serves as both a utility and governance token.
Governance Mechanisms
Voting with $MBASE
$MBASE token holders can participate in the platform's governance by staking their tokens to gain voting power. The voting power is determined by two factors:
Amount Staked: The number of $MBASE tokens locked for governance.
Lock Duration: Longer lock periods grant more voting power, encouraging long-term commitment to the platform.
The voting power calculation follows a time-weighted formula:
textVoting Power = Tokens Staked * (1 + Lock Duration in Months / 24)This formula ensures that long-term stakeholders have a stronger voice in governance decisions while still allowing newer participants to contribute.
Proposal & Voting Process
The governance process follows these steps:
Proposal Submission: Any $MBASE holder can submit a proposal, provided they meet a minimum token holding threshold (e.g., 1% of total supply).
Discussion Period: Each proposal undergoes a 7-day discussion period where the community can debate and suggest modifications.
Voting Period: After the discussion, a 5-day voting period begins. Voters can choose to support, oppose, or abstain from each proposal.
Quorum and Approval Thresholds:
Quorum: At least 10% of total voting power must participate for a vote to be valid.
Approval: A proposal passes if it receives more than 50% support from participating votes.
Timelock: Approved proposals enter a 2-day timelock period before implementation, allowing for emergency cancellation if critical issues are discovered.
Implementation: After the timelock, approved changes are implemented by the protocol's smart contracts.
Key governance decisions may include:
Adjusting interest rate models
Modifying collateralization ratios
Approving new asset types for lending
Allocating platform revenues
Upgrading smart contracts
Governance Participation Incentives
To encourage active participation in governance, Lendscape implements several incentive mechanisms:
Voting Rewards: Participants receive additional $MBASE tokens for voting, with rewards scaled based on their voting power and consistency of participation.
Proposal Bonuses: Successfully implemented proposals earn their creators a bonus in $MBASE tokens, encouraging high-quality suggestions.
Loyalty Tiers: Consistent governance participants unlock higher tiers in the platform's loyalty program, granting benefits such as reduced fees and priority access to new features.
Delegation: Token holders can delegate their voting power to other addresses, allowing for the emergence of specialized governance participants who can earn rewards for representing others.
Reputation System: An on-chain reputation system tracks governance participation, with high-reputation accounts gaining additional benefits and visibility within the community.
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