The first Governance Referendum: Transition to xExchange and MEX 2.0. Cast your vote between November 28th and December 5th

Today marks an important step forward for Maiar DEX and the entire MultiversX ecosystem. One in which we begin experimenting with the first governance proposal and referendum, in preparation for the transition to the new xExchange and MEX 2.0 economics.

The Maiar DEX transition to xExchange, covering the new economics, utility and mechanics of MEX, has been defined in a paper published on the 17th of November.

https://github.com/ElrondNetwork/elrond-specs/blob/main/xExchange%202.0.pdf

We highly recommend giving it a careful read, and proposing thoughtful improvements. This will be the very first Maiar DEX referendum and governance vote. It will start today (November 28th) at 18:00 UTC and will involve all LKMEX holders.

The excitement around the significant upgrade proposed has rapidly taken a tangible form and turned into productive conversations on all communication channels, outstanding threads, summaries and educational materials with personal takes on the key components, changes and benefits coming.

This is why we have compiled a list of valuable and insightful resources in a Twitter thread, and answered the most important and frequent questions the community had in an FAQ.

Below you can read the executive summary and the heart of the proposal.

The first Governance Referendum: overview on xExchange & MEX 2.0

xExchange (Maiar DEX 2.0) presents a set of significant improvements and benefits, while correcting the most important limitations residing in the previous economics model.

Here is a summary of the key insights xExchange brings:

• The total supply will be capped. The proposed emissions, amenable via governance in 5 years, will decrease year by year and will be zero in 8 years. This will immediately make MEX 3 times less inflationary than in Maiar DEX 1.0.
• LKMEX v2 introduces the powerful concept of energy, which builds on the v1 “time lock” concept to increment utility. In xExchange, users will enjoy many new benefits simultaneously: boosted APRs in Farms and Metastaking, 100% Metabonding rewards, staking rewards received automatically, direct access to preferential xLaunchpad tiers, Governance Power, 50% of energy removal fees and 0.10% from all swaps.
• LKMEX v2 will be a game changer by shifting from a paradigm prioritizing quantity to a paradigm prioritizing quality: 100 LKMEX with 0 energy has no utility and no power, while 1 LKMEX with 100 days of energy has more utility and more power.
• Users who convert all their LKMEX v1 to LKMEX v2 will earn between 2x and 10x more Metabonding rewards during the first 3 months and earn an NFT that can be exchanged with a guaranteed launchpad ticket.
• LKMEX v2 will bring a robust and reinforcing value accrual mechanism by which even exits from the energy paradigm benefit long-term contributors and holders: when users remove energy from their LKMEX, up to 80% of the whole amount is redistributed to long-term contributors and holders.
• LKMEX core principle will be protected by being non-transferable in general, except in trusted setups like xExchange services and protocols whitelisted by governance or between two wallets.

Complementary to LKMEX, the new MEX will be the key entry point for the entire exchange ecosystem, serving as both a payment token and access token, bringing recurring demand from projects and users who want to interact with and access the benefits brought by the exchange. Some of the specific benefits:

• Fully transferable on xExchange (and other exchanges as well)
• Buyable with on-ramp solutions (Moonpay, Transak, Ramp, etc.)
• Usable for payments in xPortal SuperApp, xSpotlight NFT marketplaces, xMoney platform, and soon other places within the community
• Top-up cards, maximizing utility for the users
• Usable as liquidity in xExchange pools to earn trading fees and farm rewards
• Entry point to all xExchange energy based utilities/applications, through which it also brings a generous bonus-pack for those who convert MEX to LKMEX (more details prior launch), so first-time users and existing users bringing more new energy into the system are rewarded

That being said, here are the most important things to know about the current referendum or governance process.

What is governance?

Governance democratizes decision-making, enabling interest alignment for all parties participating by allowing them to have a say in the future directions of the protocol.

Who can vote?

A snapshot of LKMEX holdings was taken on the 16th of November 2022. All users holding LKMEX at the time of the snapshot, be it available in their wallets, staked in Metabonding or in farms are eligible to vote.

IMPORTANT NOTE: Your voting power equals the LKMEX balance recorded during the snapshot. You can check your voting power by connecting your wallet in the governance module on the DEX.

How many days will the vote last?

The voting procedure for this proposal will span over 7 days from the 28th of November to the 5th of December.

How will the votes be cast?

Here are the 3 available voting options:

• Yes - this will register you with your total voting power as PRO/YES the switch from MEX v1 to MEX v2.
  
• No - will register your total voting power as AGAINST/NO the switch from MEX v1 to MEX v2.
  
• Abstain - will register your voting power as NEUTRAL to the switch - but even if it may seem unimportant, these votes actually help the proposal to reach quorum and thus put the power in the hands of the people who vote and care about the network. So we encourage users that don’t have a strong opinion to still vote, so that the decision for the proposal is made based on the governance votes rather than users who don’t bother.

In future governance calls, a fourth option will be enabled: NoWithVeto - for users with a very strong opinion against the change, who think the change is detrimental to the network.

Defining quorum

For this referendum the quorum will be set at 25%. This means that if the sum of all LKMEX holdings (the total voting power - TVP) is 100, for the proposal to pass it requires people with at least 25 summed voting power to vote.

How can the proposal pass?

In order for a proposal to pass it needs to pass 2 checks:

1. To reach quorum - meaning that users with more than 25% of the TVP will actually vote
2. More than 50% of votes should be UpVotes

How can you be sure all votes are correct and the results are not gamed?

• All votes will be made to a smart contract - meaning your vote will be uncensorable.
• The code of that smart contract is public, so you can actually check what logic is being run while sending a vote.
• You can check your voting power by connecting your wallet.
• All votes are public, and you can see in real-time how each vote influences the proposal result

The voting process

To facilitate on-chain voting for the Governance call, the creation of a dedicated Smart Contract is required. Furthermore, based on the November 16th snapshot, voting power has already been allocated.

The Governance vote will be open for 7 days. During this period, all LKMEX holders can cast a vote. Here’s an overview of the voting process:

• Each user needs to connect to the Governance portal with their wallet. The options available for connecting are the Maiar DeFi Wallet, the Maiar App, Ledger and the Elrond Web Wallet.
• To start casting a vote, users will need to open the proposal. Each user will also be able to see their voting power before casting their vote.
• Once the proposal module is opened, users can cast their votes. There are 3 voting options to choose from: Yes, No, Abstain.
• Once the vote has been cast, it will be recorded accordingly and displayed for each user.

It’s time to get involved

The first Governance vote marks the beginning of the transition to xExchange and a definitive step towards achieving unprecedented levels of improvements for the economics model.

Join the conversation. Start casting your vote today!

Short FAQ

Can I see my voting power?

Yes, you can see your voting power as soon as you access the dashboard and log into your wallet.

Can I change my vote?

Once a vote has been cast, it is not possible to change it.

Can I see partial results?

Partial results can be seen once your vote has been cast.

Can my vote be nullified?

Once a vote has been cast, it can’t be nullified.

Can I transfer LKMEX while the vote is in progress?

LKMEX has become non-transferrable on the 24th of November 2022.

Can I add more LKMEX to my vote?

The voting power of each account is determined based on the snapshot taken on the 16th of November and can’t be changed.