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:

1. Amount Staked: The number of $MBASE tokens locked for governance.

2. 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:

1. Proposal Submission: Any $MBASE holder can submit a proposal, provided they meet a minimum token holding threshold (e.g., 1% of total supply).

2. Discussion Period: Each proposal undergoes a 7-day discussion period where the community can debate and suggest modifications.

3. Voting Period: After the discussion, a 5-day voting period begins. Voters can choose to support, oppose, or abstain from each proposal.

4. 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.

5. Timelock: Approved proposals enter a 2-day timelock period before implementation, allowing for emergency cancellation if critical issues are discovered.

6. 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:

1. Voting Rewards: Participants receive additional $MBASE tokens for voting, with rewards scaled based on their voting power and consistency of participation.

2. Proposal Bonuses: Successfully implemented proposals earn their creators a bonus in $MBASE tokens, encouraging high-quality suggestions.

3. 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.

4. 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.

5. Reputation System: An on-chain reputation system tracks governance participation, with high-reputation accounts gaining additional benefits and visibility within the community.