The section below further dissects the impact of the Gamma Strategies Exploit on Moonwell, using quantitative analysis.
Historical Flashloan Liquidations on Moonwell Moonbeam
StellaSwap, a leading liquidity provider on Moonbeam, is also a significant source of liquidity for Flashloan Liquidators on Moonwell. A high-level examination of the data reveals the importance of Flashloan liquidations in comparison to total liquidations on Moonwell historically from Dec 2022 to Jan 5th 2024.
| index | Liquidations | Amount ($) | Percentage (Count) | Percentage (Volume) |
|---|---|---|---|---|
| Flash loans | 837 | 297,412.24 | 85.8% | 86.9% |
| All liquidations | 975 | 342,270.19 | 100.0% | 100.0% |
It should be noted that the above data only considers Flashloans where StellaSwap was used as a source for swap liquidity. The percentage count and volume of Flash loans could be even higher if other sources of liquidity were considered (e.g., BeamSwap).
Impact on Moonwell
The previous table highlighted the significance of flashloan liquidations on Moonwell and the importance of StellaSwap’s liquidity. We now examine scenarios had the StellaSwap v3 pool been paused, and its impact on Moonwell.
The chart above shows that Flashloan liquidations are far more prominent than non-flashloan liquidations.
The largest Flashloan liquidations that have ever occurred on Moonwell Moonbeam are illustrated below.
| Date | Flashloan Liquidation Volume ($) [1] |
|---|---|
| 2023-06-10 | 70,716.23 |
| 2022-12-18 | 33,692.92 |
| 2023-09-25 | 24,881.40 |
| 2023-09-11 | 13,449.41 |
| 2023-06-18 | 8,741.90 |
| 2023-03-03 | 8,040.33 |
| 2023-12-23 | 6,807.76 |
| 2023-08-17 | 6,427.39 |
| 2024-01-03 | 6,324.70 |
| 2023-03-11 | 5,942.11 |
Considering the maximum liquidation drawdown of $70,716 as the worst-case scenario of insolvency had StellaSwap v3 been disabled, Moonwell’s reserves on Moonbeam would have still managed to absorb this, with total reserves standing at approximately $690k. The maximum insolvency caused via flashloans would have remained at only 10% (around $70k) of the total reserves on Moonwell Moonbeam.
Liquidation by Asset
We see mGLMR, mDOT, mUSDC.wh as the top assets which were liquidated via flashloans on Moonwell Moonbeam.
| Collateral | Total Liquidation Volume ($) [1:1] |
|---|---|
| mGLMR | 130948.83 |
| mDOT | 89237.50 |
| mUSDC.wh | 42073.55 |
| mFRAX | 13582.60 |
| mETH.wh | 18430.29 |
| mxcUSDT | 2696.74 |
| mWBTC.wh | 433.16 |
| mUSDC | 7.19 |
| mBUSD.wh | 1.41 |
| mWBTC | 0.98 |
Although the amounts mentioned above are all historical liquidations, when we delve deeper into the assets liquidated by flash loans on a daily basis, we observe the following:
| Asset | Max Liquidation Volume ($) in a single day |
|---|---|
| mGLMR | 56,000 |
| mDOT | 38,880 |
| mUSDC.wh | 16,884 |
Again, referring to the table above, when considering the maximum liquidation drawdown for assets in the event of a pause on Stellaswap v3, it is evident that there is ample liquidity on Stellaswap v2 and Beamswap to facilitate liquidations through both flashloan and non-flashloan methods. See the details below:
- Liquidity for wGLMR: $56k for flashloan liquidation versus over $1 million in liquidity. Stellaswap v2 contributes $698k and Beamswap adds $394k.
- Liquidity for mDOT: $39k for flashloan liquidation versus over $430k in liquidity. Stellaswap v2 provides $142k, while Beamswap offers $282k.
- Liquidity for mUSDC.wh: $17k for flashloan liquidation versus over $357k in liquidity. Here, Stellaswap v2 accounts for $253k and Beamswap for $104k
Source - Stellaswap, Beamswap