Add cbXRP Market to Moonwell on Base

[coolhorsegirl]

We are pleased to present a proposal for adding Coinbase Wrapped XRP (cbXRP) to Moonwell’s Base Core Markets. cbXRP is a fully‑collateralised, ERC‑20 representation of XRP that is minted and redeemed 1‑for‑1 through Coinbase. The listing would bring a blue‑chip, payments-oriented asset to the protocol, deepen liquidity on Moonwell, and attract new retail and institutional users familiar with XRP.

cbXRP is new, and as a result has a few liquidity concerns, but it shows substantial benefits to the Moonwell community.

Benefits to the Moonwell Community

1. Enhanced Liquidity & Volume: Issuance by Coinbase immediately bootstraps liquidity on Aerodrome and Uniswap v4.
2. Stable Collateral Type: Tight 1‑for‑1 peg to XRP backed by a regulated custodian.
3. New User Acquisition: XRP has one of the largest retail followings (3M+ on X), offering growth potential for Moonwell.
4. Diversification: Adds a non‑USD‑pegged, large‑cap asset that is un‑correlated with ETH/Layer‑2 governance tokens.

Resources and Socials

• XRP Website
• Twitter
• Coinbase Assets Announcement

Benefits to the Moonwell Community

1. Enhanced Liquidity & Volume: Coinbase issuance bootstraps liquidity on Aerodrome and Uniswap v4.
2. Stable Collateral Type: Maintains a tight 1‑for‑1 peg to XRP backed by a regulated custodian.
3. New User Acquisition: XRP boasts over 3M followers on X, offering growth potential.
4. Diversification: Adds a non‑USD‑pegged, large-cap asset uncorrelated with ETH or L2 governance tokens.

Resources and Socials:

• XRP Website
• Twitter
• Coinbase Assets Announcement

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Market Risk Assessment

Market Metrics (Source)

• Market Cap: 5M
• Minimum/Maximum Market Cap (Last 6 months): $0 (December 5th 2024) / $5M (June 5th 2025)
• Circulating Supply: 2.3M cbXRP
• Maximum Supply: 2.3M cbXRP
• 24 Hour Trading Volume: It has only been out for a day, it is currently $341,000 worth of trading volume through Aerodrome

Liquidity on Centralized Exchanges

This does not apply to this token as it stands to be an onchain deployment of XRP.

Herfindahl Index (on Base):

The Herfindahl Index quantifies token concentration among holders. A value of 0.88 reflects significant concentration among wallets for the cbXRP token, indicating that governance risks stemming from concentrated holdings are high. It should be noted however that Ripple and Coinbase are reputable companies, and that cbXRP borrows from Coinbase’s reserve supply on and so this may not be a completely accurate representation and there are some safeguards.

Decentralization

• Top 10 Holders (Majority is concentrated in a Coinbase wallet followed by an Aerodrome LP)
• Token Contract: 0xcb585250f852c6c6bf90434ab21a00f02833a4af

Ownership and Administration:

cbXRP operates as an onchain Ethereum native deployment of XRP, backed by the reserves of Coinbase. The token is only on Base as of now, and all administrative roles and access are through Coinbase or Ripple.

Governance Structure:

• Coinbase Wrapped Assets are held in custody by Coinbase, and thus are subject to rules of Coinbase’s Custody depending on the jurisdiction: see here for asset-specific details.

Blacklist Functionality:

• The cbXRP contract has a blacklisting function, barring an account from transferring, minting, or burning cbXRP. There is also an “unBlacklist” function for removing blacklisting and a blacklist public getter to check the status of the blacklist.

Smart Contract Risks

Codebase and Onchain Activity

• The smart contract for cbXRP can be found here.
• cbXRP has only 264 holders as of right now.

Security Posture

• cbXRP is deployed under the same wrapped framework that was audited by OpenZeppelin. See here for auditing details.

Upgradeability

• It is upgradeable under an Admin role found in the contract. cbXRP can be upgraded at any time by the proxy admin (likely a Coinbase multisig).

Oracle Assessment

• Chainlink oracle price feed address: 0x9f0C1dD78C4CBdF5b9cf923a549A201EdC676D34
• Is the asset a wrapped, staked, or synthetic version of a different underlying asset? If yes, and the Chainlink price feed provides price data for the underlying asset rather than the wrapped, staked, or synthetic version, please provide the following information: How is the asset wrapped, staked, or otherwise created?
  • cbXRP price tracks native XRP by leveraging Coinbase reserves. The supply on Base is capped by Coinbase Custody. This can be found here on its Coinbase Proof of Reserves page.

Swap Size Requirement

cbXRP does not currently fulfill the swap size requirements of the MALF; however, it is very early in the listing process AND cbXRP has only been out for one day.

Liquidity Threshold:

Currently, the liquidity does not meet the $2M threshold Moonwell has under MALF; however, seeing as though liquidity on Aerodrome has already hit 8% of that goal in a day, it is not far fetched to see it hitting this threshold sooner rather than later.

Commercial Viability

Even if cbXRP never rises above cbETH’s historical peak utilisation of ≈ 33 %, it still clears Moonwell’s $ 000‑per‑month bar. Using a hypothetical $2 million liquidity seed, a third being borrowed at typical core‑asset rates (around 10 % APY) would generate roughly $90 000 in annual interest. After Moonwell’s 15 % reserve cut, that’s just over $1100 in protocol revenue every month, which is above the MALF threshold with decent headway for growth.

Proposal Author Information

• Names: Coolhorsegirl & 0xMims
• Twitter: @coolhorsegirl & @0xMims
• Relationship to token:
  • 0xMims: Moonwell governance lead
  • Coolhorsegirl: Moonwell delegate; Tally employee

Conclusion

For all other information, such as risk assessments or lacking information found within this document for commercial viability, we ask @Gauntlet and @AnthiasLabs to make the proper risk assessments and commercial viability assessment needed to continue.

The listing of cbXRP as a core asset on Moonwell unlocks significant potential for protocol growth, liquidity expansion, and user adoption. As a stable and compliance-ready asset, a cbXRP listing would increase lending functionality while aligning with Moonwell’s mission of simple, secure, and accessible DeFi.

While this listing is risky, it is definitely warranted to bring this to discussion immediately to stay ahead in the game. We invite the community to engage in discussion and help shape this listing proposal to best serve the protocol’s long-term vision.

[Gauntlet]

[Gauntlet] - cbXRP Recommendations

Summary

Gauntlet recommends onboarding cbXRP as collateral in Moonwell’s Core lending markets on Base, following a thorough assessment of critical risk factors. This evaluation considered cbXRP’s liquidity profile (both depth and structure), price volatility, and its overall fit within the protocol’s risk parameters.

cbXRP

cbXRP is a wrapped version of XRP, created and maintained by Coinbase. cbXRP is redeemable for native XRP.

Risk Parameter Recommendations

Parameters	Values
CF	70%
Supply Cap	1M cbXRP
Borrow Cap	500K cbXRP
Protocol Seize Share	30%

IR Recommendations

IR Parameters	Recommended
Base	0
Kink	0.45
Multiplier	0.23
Jump Multiplier	5
Reserve Factor	0.3

Supporting Data

DEX TVL

pool_name	pool_type	pool_url	pool_tvl_usd	volume_24h_usd
cbXRP / WETH 1%	aerodrome-slipstream	Link	$620.51K	$34.95K
cbXRP / cbBTC 0.25%	aerodrome-slipstream	Link	$283.50K	$500.36K

Onchain Circulation

• ~2.3M with Coinbase holding ~91% circulation.
• Second and third highest holders are the Aerodrome LPs taking up ~4% total onchain circulation.
  
  
• The Fourth highest holder (~1.3% circulation) holds the following assets no Base:
  
  

Liquidity & Slippage

Selling 500K cbXRP under current market conditions is estimated to incur 40–50% slippage. However, we anticipate a significant improvement in liquidity over the coming days.

Liquidity doubled within 12 hours on June 5.

We also evaluated XRP’s liquidity on other chains to help inform expectations for cbXRP’s liquidity profile over time. For instance, executing a 1 million XRP sell order on Binance Smart Chain (BSC) would result in approximately 10% slippage, indicating relatively deep liquidity. This cross-chain analysis provides a useful reference point for understanding how cbXRP liquidity might evolve as adoption grows on Base.

XRP Price Volatility

Over the last 180 days, XRP’s annualized daily log returns have spanned from a high of +25% to a low of -13%, underscoring the asset’s sensitivity to both upward trends and downward corrections. The current 30-day annualized log volatility is 60%, which is generally closer to other volatile blue chip assets.

XRP’s price is primarily influenced by regulatory developments, most notably the SEC lawsuit, which shape investor confidence and institutional adoption. Broader market sentiment, macroeconomic conditions, and Ripple’s partnerships with financial institutions also play key roles in driving demand. Liquidity, exchange listings, and on-chain activity (like escrow releases) affect short-term volatility. Overall, XRP tends to be less volatile than many other crypto assets due to its established utility and relatively deep liquidity.

Supply and Borrow Caps

We recommend a supply cap of 1M and a borrow cap of 500K, taking into account cbXRP’s on-chain circulation, distribution structure, overall risk profile, and liquidity conditions.

Collateral Factor

We recommend setting the collateral factor at 70%. While cbXRP presents a comparatively strong risk profile, applying a conservative CF allows greater flexibility for future cap increases and helps manage risk prudently during initial onboarding.

IR Parameter Specifications

IR Curves

XRP does not support native staking, but holders can earn yield through centralized platforms, which offer up to 5-12% APY.

Utilization	Borrow APR	Supply APR
0	0	0
45	10.35%	3.26%
100	285.35%	199.74%

We recommend an IR curve with a borrow APR of 10.35% at kink.

Next Steps

We welcome community feedback.

[AnthiasLabs]

We agree with the proposed recommendations and support the approach of starting with conservative parameters that can be scaled up as cbXRP matures on Base.

We’d like to add perspective regarding the DEX liquidity concerns highlighted in the analysis. While the current DEX liquidity shows significant slippage (40-50% for a 500K cbXRP sell), this risk is substantially mitigated by cbXRP’s unique relationship with Coinbase:

• cbXRP is automatically redeemed 1:1 for native XRP when deposited into a Coinbase wallet
• XRP can then be swapped into stables with deep liquidity on Coinbase
• This creates a reliable liquidation pathway that doesn’t depend solely on DEX infrastructure

This same mechanism has enabled lending protocols including Moonwell and Aave to safely maintain high Collateral at Risk positions in cbBTC, despite limited DEX liquidity. The key insight is that liquidators can tap into CEX liquidity rather than being constrained by on-chain liquidity, using Coinbase as a bridge.

Importantly, only one liquidator needs to be present in any geographical location where Coinbase operates to access this CEX liquidity mechanism. Given Coinbase’s broad operational footprint, we can safely assume at least one liquidator will be available to execute this arbitrage, making the liquidation infrastructure highly reliable.

Therefore, while we support the conservative initial parameters, we believe the protocol can confidently scale these parameters over time with less concern about DEX liquidity constraints than would typically apply to other assets.

To evaluate the commercial potential of cbXRP, we examined the usage patterns and market dynamics of cbBTC and cbETH on Base. As demonstrated in the charts below, lending emerges as a primary use case for both cbBTC and cbETH. By observing cbBTC’s supply over time on Base, we see steady growth and increasing user adoption. We anticipate that cbXRP will follow a similar trajectory.

We look forward to seeing cbXRP integrated into Moonwell’s Core markets.

[AnthiasLabs]

On Chain Liquidity Update

We’d like to provide an update on the current state of on-chain DEX liquidity for cbXRP.

Liquidity Data

June 6, 2025

Exchange	Pair	Volume (24 hr)	TVL	link
Aerodrome SlipStream	cbXRP / WETH	$34.95K	$620.51K	cbXRP/WETH - Coinbase Wrapped XRP Price on Aerodrome SlipStream with 1% Fee | GeckoTerminal
Aerodrome SlipStream	cbXRP / cbBTC	$500.36K	$283.50K	cbXRP/cbBTC - Coinbase Wrapped XRP Price on Aerodrome SlipStream with 0.25% Fee | GeckoTerminal

June 11, 2025

Exchange	Pair	Volume (24 hr)	TVL	link
Aerodrome SlipStream	cbXRP / WETH	~$340K	~$605K	cbXRP/WETH - Coinbase Wrapped XRP Price on Aerodrome SlipStream with 1% Fee | GeckoTerminal
Aerodrome SlipStream	cbXRP / cbBTC	~$6M	~$1M	cbXRP/cbBTC - Coinbase Wrapped XRP Price on Aerodrome SlipStream with 0.25% Fee | GeckoTerminal

Proposed Caps

Gauntlet proposed the following caps for cbXRP:

Parameter	Value
Supply Cap	1M cbXRP
Borrow Cap	500K cbXRP

Slippage

Currently you can swap 400K cbXRP for USDC while incurring less than 7% slippage (liquidation bonus). This accounts for roughly 73% of liquidatable collateral if supply and borrow caps are fully utilized at the recommended parameters. This indicates that cbXRP has sufficient DEX liquidity to be safely used as collateral, given the proposed caps. In a worst-case scenario requiring significant collateral liquidation, it can be executed entirely on DEXs.

Bad Debt Scenarios in Lending Protocols

For context, bad debt in a lending protocol can arise in two primary scenarios.

Scenario 1: Unprofitable Liquidations Due to Slippage

In the first scenario, liquidations become unprofitable because the collateral cannot be sold back to stablecoins at a profitable rate, primarily due to slippage caused by limited liquidity on DEXs. As a result, liquidators lack the incentive to liquidate these positions. If the collateral’s value continues to decline below the loan amount, bad debt accumulates as the protocol absorbs the loss.

Scenario 2: Profitable Liquidations with Inaccessible Funds

The second scenario occurs when liquidations are profitable, but liquidators cannot access the necessary funds to execute them. This could happen due to liquidity constraints or delays in acquiring the debt asset. If the collateral’s price drops rapidly during this period, its value may fall below the loan amount before liquidation is completed, leading to bad debt.

For cbXRP, these risks are mitigated by its unique properties:

• Scenario 1: XRP’s high liquidity on CEXs ensures that significant liquidation volumes will generally be profitable. Liquidators can easily redeem cbXRP for XRP on a 1:1 basis through Coinbase, tapping into deeper liquidity compared to that on DEXs.
• Scenario 2: Although the on-chain supply of cbXRP is currently limited due to it being brand new, liquidators can manually bridge XRP to Base via Coinbase when needed. This ensures access to sufficient funds even if on-chain liquidity is constrained.

Conclusion

We will provide necessary updates to risk parameters as cbXRP matures as an asset. In its current state, we’re confident that cbXRP can be used for lending purposes in Moonwell’s Core markets with the recommended parameters.