Summary
As the combined TVL of ETH, USDC, and EURC vaults saw significant growth surpassing $120m in October, the allocation model for Moonwell Flagship vaults saw an important update introduced by the Block Analitica team, ensuring yield maximization based on current borrowing demand.
Month in review - October 2024
October saw a notable growth of Moonwell Flagship vaults on Morpho’s Base deployment, with the average TVL increase being 224%.
ETH: 10.9k → 24.8k (227% increase)
USDC: 31.1m → 53.6m (172% increase)
EURC: 4.5m → 12.4m (275% increase)
At the moment of writing, a total TVL of Moonwell Flagship vaults is $135.5m.
Updated Reallocation Model
The Block Analitica team is excited to share that we’re released an update on our allocation model for Moonwell Flagship vaults. The model is now optimized for yield, alongside making sure looping strategies such as leveraged staking strategy on Morpho are profitable, all while accounting for external borrow rate benchmarks across DeFi.
In October, a total of 16 reallocation transactions were sent by Allocator multisig, aiming to maximize yield for all Moonwell Flagship vaults on Base (ETH, USDC, and EURC) according to the new allocation model.
As Block Analitica’s Morpho Dashboard shows, as far as Moonwell Flagship vaults are concerned, there is currently 68% of ETH, 32% of USDC, and 83% of EURC in the idle market, representing a significant amount of idle liquidity to be put in use as soon as borrowing demand spikes.
At the time of writing, there are three markets on Base seeing seeing impactful borrowing demand:
-
wstETH/ETH (Exchange rate) market with ~$20m borrowed
-
cbBTC/USDC market with ~9.5m borrowed
-
wstETH/USDC market with ~$10m borrowed
As of now, the Moonwell Flagship vaults represent 93%, 80%, and 98% 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
During October, there were few parameter adjustments made on Moonwell Flagship vaults on Morpho’s Base deployment:
- Setting maxIn flow cap for PA for cbETH/USDC (exchange rate) market on Base to zero due to market deprecation. This is to incentivize migration to a new (market rate) cbETH/USDC market.
- Idle market was added to the supply queue of the Moonwell Flagship USDC vault, to align with the setup of other BA-curated vaults.
- Increasing supply cap of EURC vault to all listed markets (wstETH, cbETH, rETH, WETH, and cbBTC) to 10m EURC to enable meeting future borrowing demand.
- Public Allocator was enabled for the newest Moonwell Flagship EURC vault, to bring just-in-time liquidity for EURC borrowers. This was done via an onchain Moonwell DAO vote, executed here.
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.