This proposal is a proxy governance proposal that mirrors Mento Governance Proposal 14 (MGP-14). As part of the ongoing coordination between the Celo community and the Mento community, Celo token holders have the opportunity to vote in Mento Governance with the Celo Community fund Mento Allocation.
MGP-14 covers the first phase of the Mento V3 deployment, the protocol's largest release to date and its first cross-chain expansion to Monad.
Mento V3 marks the transition from a decentralized stablecoin issuance protocol to a more holistic on-chain FX protocol through two major advancements:
FPMM DEX: A new decentralized pool primitive that combines our oracle circuit breaker architecture with on-chain pool infrastructure to create a hybrid pool that follows off-chain oracle prices for efficient on-chain FX swaps. This pool will be used to swap Mento stables, and will also support 3rd-party stablecoin issuers.
Mento Liquity V2: An evolution of Liquity V2, allowing the protocol to migrate its current experimental local currencies to a Liquity V2 deployment, where assets are collateralized by USDm and the reserve FX risk is mitigated through individual capital provider trove management. This will also allow users to represent long USDm, short XXXm positions.
The V3 rollout will happen in multiple phases. Phase 1 focuses on deploying the new FPMM DEX on Celo and Monad, migrating existing V2 pools to V3 FPMM pools, migrating GBPm from Reserve-backed to CDP-backed via Mento Liquity V2, and bridging USDm, EURm, and GBPm to Monad via Wormhole NTT.
Given this operational complexity, this proposal requests temporary transfer of ownership of a few core contracts (BiPoolManager, SortedOracles, Circuit Breakers, USDm, EURm, GBPm) to a 4/7 Mento Labs Dev multisig for approximately 3 weeks. All actions taken will be limited to those described in the proposal, thoroughly simulated, documented, and audited. Additionally, it requests permission to retain ownership over the to-be-deployed Monad contracts until cross-chain governance is in place.
For more information on the deployment plan, such as technical details, security considerations, and timeline, please see the discussion forum post.