As the Euler protocol amplifies the process of decentralisation, the governance forum has launched as a place where users are able to discuss ideas, comment on governance proposals and get involved in the building of the Euler protocol.
Even though users are not able to vote on proposals as the EUL token has not been distributed yet, this will be the blueprint for the discussion of important changes to the Euler protocol.
The governance forum can be found here: https://forum.euler.finance/
eIP: Euler Improvement Proposal
The improvements to the Euler Protocol will be mainly done through passing eIPs: Euler Improvement Proposals. These proposals include issues pertaining to:
- Amending risk factors of a given asset (collateral factors, borrow factors, interest rate models, cross tier, TWAP length etc)
- Updates to the Euler smart contract
- Deploying on rollups and other chains
eIP 1 and eIP 2
The governance process starts by unveiling two governance proposals:
eIP 1: Promote WBTC to collateral tier
Proposal includes a batch of changes to the Wrapped Bitcoin (WBTC) asset on Euler. These include: promotion of WBTC to the collateral tier. Increase of WBTC collateral factor to 0.88. Increase of WBTC borrow factor to 0.91. Change in interest rate model.
A thorough risk assessment has concluded that promoting WBTC to collateral tier and improving the rest of risk factors related to WBTC is appropriate.
Users can check out and comment on the proposal here: https://forum.euler.finance/t/eip-1-promote-wbtc-to-collateral-tier/27
eIP 2: Amend Interest Rate models
This is a proposal to amend the interest model on the following assets: USDC, DAI, WETH, USDT, UNI and LINK. Currently, all assets on Euler are following the default interest rate model, which was originally created for the riskier, default isolated assets. However, given the high quality nature of those assets, it is appropriate to bring the interest rates in line with the market as the current rates are too high.
Users can check out and comment on the proposal here: https://forum.euler.finance/t/eip-2-amend-interest-rate-models/30
The Governance Process
Here’s an outline of how to effectively use the forum to influence governance decisions:
A great place to start a discussion on a potential governance proposal is the idea section. If a user feels confident that their idea is relevant to the community and is well-formulated, ping one of the mods and he’ll move the idea to the [RFC] category.
[RFC] Request for Comment
If the idea is well-formulated and is relevant to the project and community, a moderator will approve the [RFC] for debate.
The [RFC] is the first step in creating a governance proposal. Make sure it’s well-formulated, be proactive with the community and be open to suggestions. It typically takes a week for the [RFC] to mature before it becomes an eIP.
If the [RFC] is well-formulated and the community has a clear understanding of the proposal and supports the [RFC], it will be moved by a mod to the governance category as an eIP: Euler Improvement Proposal.
It typically takes at least 4 days for the eIP to mature before an official Snapshot vote can be submitted.
A snapshot vote does not always need to be posted by the original eIP author, it can be posted by someone else or by the core team in case the minimum threshold of EUL is not being met.
When starting a Snapshot, it is important to set the duration to at least 3 days to give the community enough time to cast their vote.
A Snapshot should always have the link to the eIP attached. The parameters of the poll (Yes, No, different options for values) need to mirror the options discussed in the eIP.
Euler is a capital-efficient permissionless lending protocol that helps users to earn interest on their crypto assets or hedge against volatile markets without the need for a trusted third-party. Euler features a number of innovations not seen before in DeFi, including permissionless lending markets, reactive interest rates, protected collateral, MEV-resistant liquidations, multi-collateral stability pools, sub-accounts, risk-adjusted loans and much more. For more information, visit euler.finance.