Moonwell, the decentralized lending and borrowing protocol, has rolled out multichain governance capabilities for WELL token holders. The upgrade means users can now propose, vote on, and execute governance decisions across multiple networks, either by staking WELL or transferring it between chains.

When a protocol lives on multiple different networks, its token holders end up scattered across those chains, each with a different version of the same token and no unified way to make their voices heard. Moonwell’s solution hinges on the xERC20 token standard, branded as xWELL, which treats the token as a single, portable asset regardless of which chain it sits on.

How the xERC20 standard changes the game

For Moonwell, supported networks include Base, Optimism, Moonbeam, and now Ethereum. Community proposals leading to the xERC20 upgrade began in early 2024, specifically aimed at eliminating the complications that came with wrapped token implementations on different chains.

Governance on Moonwell operates through Moonwell Improvement Proposals, or MIPs. These are the formal mechanism through which the community proposes changes, votes on them, and executes the results on-chain.

Ethereum integration and recent milestones

The most notable recent development is MIP-X55, which was approved following a vote that ran from May 13 to May 16. This proposal connected the Ethereum mainnet to the xWELL bridge.

Following MIP-X55, the protocol is pursuing MIP-X58, which aims to streamline governance activity directly within the Ethereum ecosystem, reducing the steps and friction involved in participating.

Holders who want voting power can stake their WELL tokens in Moonwell’s Safety Module, receiving stkWELL in return. Stakers face slashing risks of up to 30% in shortfall events, meaning if the protocol suffers a significant loss, staked tokens can be partially liquidated to cover the deficit.