Summary
A new Morpho wstETH/USDC market was recently deployed on Base, featuring a Chainlink market price oracle. Block Analitica & B.Protocol, as Curator and Allocator of the Moonwell Flagship USDC Vault, have decided to transition from the wstETH/USDC market using an exchange rate oracle, to the new wstETH/USDC market, utilizing a market price oracle. The new market listing is intended to strengthen the risk management of the Moonwell Flagship USDC Vault. Apart from the oracle change, all other parameters remain exactly the same as the old wstETH/USDC market using the exchange rate oracle.
Rationale
In our previous research, we have covered the differences between exchange rate and market price oracles for LST pairs. Our analysis indicates that exchange rate oracles are generally more beneficial for LST/ETH pairs, while other markets, including LST/Non-ETH pairs, should ideally use market price oracles.
To learn more about our views on market price oracles for LST/Non-ETH pairs, refer to Block Analitica & B.Protocol: Moonwell Flagship USDC - cbETH/USDC Market Listing with Market Price Oracle, where we explained the reasoning for changing to a cbETH/USDC market with a market price oracle, from a cbETH/USDC market with an exchange rate oracle. Now that a Chainlink market price oracle is available for wstETH on Base, we believe that a similar change should be made for the wstETH/USDC pair.
New wstETH/USDC Market Parameters
Loan token: USDC - 0x833589fCD6eDb6E08f4c7C32D4f71b54bdA02913
Collateral token: wstETH - 0xc1CBa3fCea344f92D9239c08C0568f6F2F0ee452
Oracle: Morpho Chainlink - 0xD7A1abA119a236Fea5BBC5cAC6836465cbe9289A
IRM: Adaptive Curve IRM - 0x46415998764C29aB2a25CbeA6254146D50D22687
LLTV: 86%
SupplyCap: 20M USDC
Listing and Veto
The new wstETH/USDC market listing was executed on Jul-30-2024 01:25:37 PM +UTC. The market will go live once the 4 day (96h) timelock ends.
As a reminder, and as previously mentioned in Introducing Moonwell MetaMorpho Vaults: Next-Gen DeFi Lending, the Moonwell Security Council is the Guardian of the Moonwell Flagship Vaults. If they, for whatever reason, oppose the market listing, they have the ability to veto pending actions in timelock.