Proposal: Introduce a 5% Quorum Threshold for On-Chain Votes
Brief Description: Introduce a 5% on-chain quorum based on the relevant circulating supply for all proposals from now on. That way, we’ll set a standard for approving only the proposals that have significant community support and discourage the listing of assets that do not contribute to the ecosystem’s growth. This measure will help ensure that new tokens added have active community involvement and that improvement proposals genuinely reflect the community’s needs and desires.
- Approve
- Disapprove
- Abstain
Motivation
Our community has whitelisted 27 collateral and 51 borrowable assets with the notion that “more assets will bring in more TVL”. While this is conceptually true, it slowly dilutes the value of our on-chain governance without adding much (if any) to the protocol or the community. In most cases, we whitelist tokens from teams that do not actively engage with our community and do not create/manage pools afterward. This results in inefficient and fruitless token additions.
A common phenomenon after listing an asset is to have zero or minimum liquidity, which totally contradicts the reasoning of most LENFI holders who fall for the abovementioned notion. Over time, listing a token on Lenfi has become merely a marketing activity for most newly emerged projects, which don’t even put effort into supplying pools. Setting a minimal on-chain quorum will set some standards for approving new assets and improvement proposals.
While the latter is more critical, it might be more efficient to keep the quorum threshold achievable and possibly increase it in the future. Here’s some simple math to back my claims:
Rationale
I’ve checked the last 10-15 proposals and the total number of voters. Here’s what I found:
| Proposal | Total number of votes | % of circulating supply | Total pooled on app.lenfi.io |
|---|---|---|---|
| STUFF | 458,375 LENFI | 3.01% | 0 |
| TITAN | 1,465,249 LENFI | 9.62% | 200 ADA / 1780 TITAN / 750 IAG |
| STRIKE | 1,234,085 LENFI | 8.10% | 15,800 USDM |
| DEDI | 783,455 LENFI | 5.14% | 0 |
| C4 | 772,473 LENFI | 5.07% | 0 (only borrowable) |
| rsERG | 1,062,591 LENFI | 6.98% | 0 (only borrowable) |
| NIKE | 1,062,591 LENFI | 6.98% | 137,600 NIKE |
Current circulating supply of 15.23m LENFI
The mean percentage of votes for new assets is roughly 6.32% of the current circulating supply.
| Proposal | Total number of votes | % of circulating supply |
|---|---|---|
| Stablecoin interest rate adj | 1,481,480 LENFI | 9.73% |
| increase liquidation fee to 5% | 3,508,998 LENFI | 23.04% |
| increase protocol fees to 20% | 3,511,368 LENFI | 23.06% |
| adjust ADA pool interest rate parameters | 3,492,171 LENFI | 22.93% |
The mean percentage of votes for improvement proposals is roughly 19.7% of the current circulating supply.
TL;DR
This proposal suggests setting a 5% on-chain quorum threshold based on the current circulating supply of LENFI for all future proposals. This aims to ensure that only proposals with significant community support are passed, addressing the issue of inefficient asset listings that do not contribute to protocol growth or community engagement. The data shows that recent asset proposals averaged around 6.32% participation, while improvement proposals had about 19.7%, suggesting that a 5% threshold could be a reasonable starting point to maintain community involvement without being too restrictive.