# Add LsETH market to Moonwell on Base

**URL:** <https://forum.moonwell.fi/t/add-lseth-market-to-moonwell-on-base/1679>\
**Category:** Proposals\
**Tags:** base\
**Created:** [April 3, 2025, 9:17pm UTC](https://forum.moonwell.fi/t/add-lseth-market-to-moonwell-on-base/1679 "2025-04-03T21:17:51Z")\
**Posts on this page:** 1\
**Showing post:** 2

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**Author:** ![Gauntlet](https://dub1.discourse-cdn.com/flex017/user_avatar/forum.moonwell.fi/gauntlet/32/780_2.png) [@Gauntlet](https://forum.moonwell.fi/u/Gauntlet)\
**Post date:** [April 17, 2025, 1:01am UTC](https://forum.moonwell.fi/t/add-lseth-market-to-moonwell-on-base/1679/2 "2025-04-17T01:01:46Z")

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# [Gauntlet] - LsETH Recommendations

# Summary

Gauntlet recommends **NOT** listing LsETH as collateral in Moonwell’s Core lending markets on Base. This recommendation is based on a comprehensive evaluation of key risk factors, including liquidity concentration, market depth, volatility, and overall alignment with the protocol’s collateral risk framework.

## Supporting Data

**Top Holders**

 ![Screenshot 2025-04-16 at 8.41.16 PM](https://europe1.discourse-cdn.com/flex017/uploads/moonwell/original/2X/f/fd27fdaf390e43ba7d8b257f8c7e851813c652c4.png)

About **78%** of the lsETH token supply is concentrated in a single address, specifically the Aerodrome Finance CL Pool, while no other individual holder controls more than 6%. Additionally, the token has only ~250 holders, indicating a highly concentrated and illiquid market. This level of centralization presents a significant risk from a collateralization standpoint.

From a [revenue and utilization perspective](https://forum.moonwell.fi/t/moonwell-asset-listing-framework-v2/724/9), the token’s limited distribution and low circulating float constrain organic supply growth. A highly centralized holder base reduces the likelihood of widespread adoption and participation, limiting borrow activity and yield generation. As a result, even if lsETH were listed, it would offer minimal upside in protocol fee generation, while introducing risk exposure due to its liquidity fragility.

In its current form, lsETH is not a viable candidate for collateral listing. To be reconsidered, the token would need to demonstrate broader holder distribution, deeper and more diversified liquidity across venues.

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