Block Analitica & B.Protocol: Moonwell Flagship Vaults - Monthly Recap (January 2025)

Summary

January saw a significant increase in ETH borrowing demand which has spiked from 11.5k to 25.5k of ETH borrowed on the largest wstETH/ETH market alone, resulting in Moonwell Flagship ETH vault’s APY increase by 1.75% (currently at 2.1%). Stablecoin borrowing demand, primarily demand for USDC, also more than doubled after the CB integration went live on January 16th allowing Coinbase customers to borrow USDC against cbBTC via Morpho directly.

Month in review - January 2025

January saw a slight net outflows m/m across Moonwell vaults on Morpho’s Base deployment following the reduction in WELL rewards on December 15th, with a decrease in the ETH and EURC vaults while the new cbBTC and USDC vault saw deposits float around 300 cbBTC and 40m USDC.

ETH: 29k → 23k (17% decrease)

USDC: 38.6m → 39m (1% increase)

EURC: 11m → 8.8m (20% decrease)

cbBTC: 301 → 298 (1% decrease)

Increase in borrowing demand

ETH borrowing demand

During January the ETH borrowed across all supported markets on the Moonwell Flagship ETH vault increased from 13k ETH to 27.4k of ETH.

Markets with the most notable borrowing demand increase were wstETH/ETH market which saw an increase of 121% (14k ETH) alone, and cbBTC/ETH market starting the year with 275 ETH borrowed while now having over 4k of ETH borrowed.

This has resulted in ETH vault native APY spiking from 0.25% to 2% (with the peak of 2.8%).

cbBTC borrowing demand

With the newly launched markets (PT-LBTC-MAY2025 and LBTC), the cbBTC quickly attracted new deposits while the borrowing demand started picking up gradually, reaching ~80 cbBTC borrowed at the time of writing.

USDC borrowing demand

Coinbase - Morpho integration (cbBTC/USDC market)

On January 16th Coinbase announced the integration of cbBTC/USDC Morpho market on Base as part of their “TradFi in the front, DeFi in the back” campaign allowing users to borrow up to $100k in USDC.

Little over 2 weeks after the option to borrow against cbBTC on Coinbase app went live, the amount of USDC borrowed on the aforementioned market on Morpho Base deployment saw a ~150% increase and is expected to grow significantly.

Market-driven Reallocations

In January, over 3000 reallocation transactions were executed, aiming to maximize yield for all Moonwell vaults on Base according to the upgraded reallocation model.

At the time of writing, there are 3 markets on Base seeing seeing impactful borrowing demand:

As of now, the Moonwell vaults represent 70%, 38.5%, 100% of supply share in those markets respectively, and will continue to provide liquidity to a DeFi blue-chip collateral in a yield-optimized way, respecting the established conservative approach to risk curation.

Parameter Changes and Proposals

During January, the following parameter adjustments were made on Moonwell vaults on Morpho’s Base deployment:

  • Increased PT-LBTC-29MAY2025/cbBTC supply cap to 200 cbBTC to allow for sizable borrowing positions, alongside the 100 cbBTC flow caps.
  • Increased LBTC/cbBTC supply cap to 200 cbBTC to allow for sizable borrowing positions, alongside the 100 cbBTC flow caps.

Next Steps

Please feel free to comment or ask any question you may have regarding the reallocation model, parameter changes in this thread or via DMs, we’d be happy to hear and address them in a timely manner.

For live accurate data on Morpho Blue and MetaMorpho refer to our dashboard.

For any questions or feedback feel free to get in touch with us here or on our social platforms.

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