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EOL Allocation Governance

EOL Allocation Governance follows a three-step process to effectively leverage the collective intelligence of the LPs: the forum discussion, the initiation voting, and the gauge voting.

The Forum Discussion

The forum is an open platform where LPs and protocols freely discuss various subjects. The primary role of the forum is for candidate protocols to kickstart discussions on possible EOL allocation. The link to the forum:

Out of seven categories, the EOL Allocation category is the most crucial for EOL management. In this category, LPs and protocols align their needs through thorough discussion before the votes.

Protocols upload proposals providing details on their service and reward offerings. Proposals contain the following contents:

  • Brief explanation of the protocol
  • Fundraising status of the protocol
  • Audit report and security track record of the protocol
  • The protocol’s offerings for receiving EOL
  • The rationale for addition / removal / allocation ratio change

LPs and protocols discuss based on the proposal:

  • The security risks and prospects of the protocol
  • The appropriateness of the protocol’s offerings in return for the EOL

After the discussions, decision-making votes follow. Through forum discussion, protocols can align their needs with those of LPs, increasing their chances of receiving the desired EOL allocation in the vote. Conversely, if a protocol has security risks or poor reward alignment and these issues remain unsolved in the forum, LPs can make an informed decision to reject the option in the vote.

Other categories include announcements, general, research, asset support, network support, and the Mitosis app. The asset support and network support categories focus on the assets or networks supported by Mitosis. In the Mitosis App category, builders introduce their application ideas for the Mitosis ecosystem and receive community feedback.

The Initiation Vote

The Initiation vote determines whether to deposit liquidity into a specific protocol. Proposals are separated by protocol and miAsset. For instance, one proposal decides on the addition of Curve Finance (referred to as "Curve" hereafter) as the candidate protocol for weETH allocation, a separate proposal for pufETH allocation to Curve, and another for pufETH allocation to Compound.

LPs can only vote on proposals regarding the miAsset they hold. For instance, LPs holding miweETH can vote on adding Curve for weETH allocation. However, they cannot vote for pufETH allocation to Curve if they do not hold pufETH.

If the Initiation vote achieves sufficient quorum and yes votes, the protocol joins the list for EOL allocation.

LPs’ voting power is determined by the following methods:

  • The governance calculates the voting power separately for each type of miAsset.
  • It is proportional to the minimum amount of miAsset each address holds during the voting period.
  • This approach prevents LPs from dominating the vote by holding large amounts of miAssets for a short period.

The Gauge Vote

The Gauge vote determines the allocation ratios for each protocol that passed the Initiation vote. Proposals are separated by network and miAsset. For instance, there will be a proposal for allocating weETH on Ethereum, a separate proposal for pufETH on Ethereum, and another proposal for pufETH on Optimism.

LPs can only vote on the proposals related to the miAssets they hold, regardless of the network they deposited to. For instance, let’s say an LP deposited weETH to Ethereum and received miweETH in return. The LP can vote on weETH allocation on Optimism, but not on pufETH allocation on Ethereum.

The voting power is calculated the same way as for the Initiation vote. LPs can allocate specific percentages of their voting power to different protocols, totaling 100% for each network. For example, a miweETH holder who deposited weETH to Ethereum can cast 100% of their voting power to Prime Protocol on Optimism, while on Ethereum, they can allocate 60% to Ion Protocol and 40% to EtherFi Liquid.

LPs can change the ratio of their voting power at any time. However, after a redistribution, LPs cannot redistribute their voting power for a certain period. The governance periodically takes snapshots of the results and reallocates EOL accordingly.