Governance and Pool Creation
What is governance and what it can do on the protocol
Apart from lenders and borrowers who are the main actors when it comes to token lending on the protocol, governance also plays an important part on Atlendis.
Governance in a role that can be given to an address on the protocol. It gives the right to trigger the following actions:
- Pool creation: governance can create new pools, and choose all its parameters (i.e asset, maturity, liquidity rewards, protocol fees, min rate, max rate, rate spacing etc.). Typically, pool creation will be the last stage of a borrower onboarding request, the beginning of the process being held off chain.
- Borrower address allowing: right after the creation of a pool, the borrower cannot yet borrow from the pool. Borrowers will have to propose addresses to the governance, which will have the right to borrow and repay loans. A borrower can seamlessly use multiple addresses to do these actions.
- Borrower address disallowing: the same way governance can allow addresses, it can also remove the rights from an authorised address.
- Close pool: closing a pool prevents borrowers from taking further loans from it, as well as lenders from depositing in it. It will typically be used to signal the end of a pool support after multiple or a single loan has been taken. Closing pools still allows the borrower to repay the loans, and lenders to withdraw their funds.
- Default pool: governance can flag a pool as defaulted if a borrower fails to repay its loan after a certain amount of time. Defaulting process will be handled off chain, while the on chain action will serve as a security measure while the mitigation process is ongoing. Defaulting a pool only lets lenders withdraw their unmatched funds, while the funds they borrowed will typically not be repaid through the protocol.
- Set max borrowable amount: governance can allow a borrower to have a higher borrowing ceiling on a pool. This will allow borrowers to start slow, and ramp up a pool capacity over time.
- Set liquidity rewards distribution rate: governance can change the rate at which liquidity rewards are distributed to lenders that provide liquidity. This allows borrowers to propose a change in incentives structure during the life of a pool.
- Set platform fees rate: governance can modify the amount of fees paid to the protocol. This will be done with borrowers agreements, and leaves flexibility on how fees are paid to the protocol.
At first, governance will consist in a single multisignature wallet, owned by the founders of Atlendis Labs. All governance actions will be announced ahead of time to maximise transparency on the protocol. We will notify the community and open debate on decisions that will impact the protocol, to be as inclusive as possible for all decisions.
The goal of having a multisignature wallet acting as governance at the beginning is of course not to keep control of the protocol, but rather to securize its development over time. Setting up governance processes is not an easy task, we chose to focus first on the protocol core and decentralise the decision processes later on.
Governance is meant to evolve over time, while its final form is not decided yet, decentralisation of governance will be one of the next major steps of the protocol improvement.