Meteora Town Hall 3 & 4 Summary — Meteora as a community-driven yield layer

We held our 3rd & 4th town hall on 11 Jan & 18 Jan 2023 respectively, where we discussed the snapshot timeline and allocation plan, the role our community can play to make Meteora a community-driven yield layer and key next steps.

Here’s a summary of what was discussed:

New Beginnings: Mercurial to Meteora

• The goal of the Mercurial to Meteora transition is to remove all uncertainty about the ownership of the new platform and tokens, creating a new clear and transparent base for stakeholders. Hence wallet accounts with any association with Alameda and FTX will be excluded. Further decisions about these wallets will be made collectively via the DAO.
• With community feedback regarding the snapshot, we are changing the MER snapshot to coincide with the launch of Meteora at the end of the month. This gives users more time to withdraw their MER liquidity from the AMMs and lending pools, and provides a seamless transition from Mercurial to Meteora.

Meteora as a Capital Allocation Layer for Solana

• A stable, transparent and trusted lending ecosystem is vital for the Solana and DeFi ecosystem, as it forms the backbone for a blockchain’s health.
• Meteora’s mission is to create a system that allocates capital efficiently and safely across the whole lending ecosystem on behalf of protocols and users.
• To build a trustworthy layer for Solana, we must consistently review the set of risk parameters that we use for determining the allocation of capital to the lending protocols that we connect to; protocol audit status, insurance, open source code for example. This set of risk parameters is continuously being refined together with our community.

Decentralized, Community-driven Layer

• To put together a truly robust system, we recognise that our team cannot be the only one to build this layer on our own. Having only the team to curate the risk parameters will create a tunnel vision on things and lead to blindspots.
• Getting the community involved in building this capital allocation layer together is critical to achieving our mission. This would allow us to tap into the collective knowledge and experience base of everyone to create an evaluation system that is transparent, decentralized and trusted.
• Beyond the initial Meteora Allocation, we talked about expanding and diversifying the stakeholders on Meteora through mechanisms like airdrops and interesting ways to partner up with lending platforms to connect with their users. We want to reach out to people interested in participating in our project in meaningful ways and knowledgeable in areas that will help the project in the long run.
• We envision Meteora to be a trusted place for new and existing users to experience Solana and DeFi lending.

Decentralization and Community Involvement for Transparency

• FTX is an excellent example of why decentralization and transparency are critical to the success of a protocol. It is difficult to trust an opaque protocol — you need to know how and where the funds are going.
• By opening up the decisions of essential parameters for capital allocation and safety mechanisms to the community, we make it fully transparent; we believe this is the first step to regaining people’s confidence in the ecosystem.
• However, it is important for the community and us to accept that this process takes much longer than a centralized point of decision-making within the team, but the tradeoff is well worth it.

How can the community get involved?

• Key decisions that the community can participate in:
  - Parameters that affect the maximum allocation of assets to the various lending platforms.
  - Utilization rate thresholds of lending pools beyond which all allocated assets will be withdrawn back to our vaults.
  - The buffer levels between the lending pool reserves and the liquidity allocated by the vault before the keeper withdraws liquidity.
  - New lending platform integrations with the yield layer.
• Meteora will facilitate collaboration with our community on a risk evaluation report for the overall lending landscape about the status of the various lending platforms. This ongoing evaluation will eventually be community-driven, bringing together perspectives and insights from experts beyond what the team alone can provide.

Next: Building up fundamentals and user education

• Focus on getting fundamentals right in our product, and aim to grow our user base incrementally instead of getting too big too fast. This will give us time to iterate and enhance our development alongside the community.
• Explore insurance of the funds deposited into the protocol as a form of added assurance for our users.
• Education and helping people understand how allocations and safety mechanisms work, and kickstart getting the community more involved in decisions around Meteora’s allocations.
• Getting people to understand the tradeoffs between yield, fund safety and fund accessibility is also necessary.

Ending thoughts:

Meteora’s long-term goal is to become the community-led yield layer for Solana and all of DeFi.

With the collective efforts of everyone, we will be able to help regain confidence in the entire lending landscape and build up a fantastic experience for everyone participating in it.