Summary
I propose that the Moonwell community vote to authorise the activation of the Moonwell protocol on Base mainnet with the aims of (1) increasing accessibility to Moonwell and (2) connecting the Polkadot and Kusama ecosystems to the world of decentralised finance.
Base is an Ethereum Layer 2 incubated by Coinbase. Activating Moonwell on Base will broaden the Moonwell community to include users of the world’s second-largest centralised exchange, helping Moonwell expand cross-chain interoperability on a value-aligned chain.
About Base
Base is a Layer 2 (L2) blockchain developed on the Ethereum network, jointly created by Coinbase and Optimism. Since Base operates as an optimistic rollup, it provides substantial enhancements in scalability compared to L1 Ethereum, while maintaining its security from the Ethereum base layer. Following the testnet launch on February 24, 2023, it is expected that Base mainnet will launch in the coming months.
Smart contracts on Base will be deployed and executed on its Ethereum Virtual Machine (EVM) execution layer. Base goes even further than EVM compatibility and achieves EVM equivalence, or full compliance with the Ethereum yellow paper. This means that developers can be confident that any program that runs on Ethereum will be fully compatible with Base.
Built on Bedrock, the first iteration of the OP Stack, Base leverages Optimism’s frameworks for scalability and development. The OP Stack is a set of MIT-licensed open-source software that anyone can use or fork, and represents a vision for Ethereum scalability and modularity. With standardisation and compatibility, comes the potential for interoperable L2s including Base to manifest into a larger “Superchain”. Base will also contribute to Optimism’s RetroPGF model, incentivising the development of the open-source public goods that our digital world relies upon.
Coinbase is a proven leader in the digital asset space. After publicising its on-chain ambitions nearly 7 years ago in their “Secret Master Plan,” Base’s release marks the next milestone towards realising their goal of creating a financial system consisting of decentralised applications on an open and globally accessible network with a user base of one billion people.
Additionally, Coinbase has made significant contributions to Ethereum, particularly in the development of EIP-4844 (sharding), which will dramatically lower fees and gas on Ethereum L2s, with the aim of bringing transaction costs below the “1 cent per transaction” threshold.
Coinbase intends to progressively decentralise Base. In 2023 alone, Coinbase will work towards progressing Base and Optimism mainnet from a Stage 0 rollup to a Stage 1 rollup, with a significant level of decentralisation and trustlessness.
Motivation
Activating Moonwell on Base mainnet offers a number of benefits to the Moonwell community, including opportunities to:
- Expand cross-chain interoperability
- Unlock a massive target audience, Coinbase users
- Build on shared values
Expand cross-chain interoperability
The launch of Base offers an opportunity to connect the entire DotSama ecosystem with Ethereum in a way that wasn’t possible before. The Moonwell protocol now has the capability of going cross-chain and bringing the best assets from the ecosystem to millions of Coinbase users, including GLMR and DOT.
Since the Moonwell community first activated Apollo just over a year ago, we have pursued the goal of connecting the Polkadot and Kusama ecosystems to the world of decentralised finance. The Moonwell community also shares the Moonbeam vision of connected smart contracts with EVM as the base layer.
This vision is supported by the cross-chain integrations and features available on Moonbeam, which will allow Moonwell to integrate and expand to Base, reaching even more people.
Unlock a massive target audience, Coinbase users
Base represents a massive target audience for Moonwell — Coinbase’s 110m verified users (over 8.5m of which remain active during the recent bear market). Coinbase’s retail mobile app now includes a “web3” tab that enables Coinbase users to seamlessly interact with dapps and move assets across the ecosystem. If Moonwell reaches only 10% of active Coinbase users, we can potentially add 850,000 new users to our community, which is equivalent to 2x DeFi’s current unique users per month.
Activating Moonwell on Base means exposing up to 110m users to the world of decentralised finance and familiarising them with our existing activations on Moonbeam and Moonriver.
As one of the first projects to activate on the Base testnet, Moonwell will enjoy early mover benefits (specifically in attracting sufficient liquidity) and join a community of web3 giants like Aave, Sushiswap, and Chainlink on Base mainnet.
Build on shared values
The activation of Moonwell on Base signifies not only considerable expansion possibilities for the community but also the security and trust-centric values of Coinbase, which closely resonate with the fundamental principles of the Moonwell community.
These values attracted now-Moonwell contributors Luke Youngblood and Octavius, each of whom joined Coinbase in 2018-2019. During his 3-year career at Coinbase, Luke helped build Staking Rewards, another example of Coinbase beginning to build directly on L1 protocols. Octavius helped build the cold storage systems that enable Coinbase to protect billions of dollars in crypto.
The Moonwell protocol on Base will be governed by WELL token holders. It is expected that Halborn Security will complete audits of all new functionality enabled. Additionally, Moonwell markets are protected from price manipulation and secured by Chainlink oracle price feeds. Risk management platform Gauntlet Network runs frequent economic simulations to ensure that asset risk parameters are set to safe values.
Implementation
Implementation of MIP-39 will include the following:
- Halborn Security will provide audits of new functionality in the Moonwell protocol, including new cross-chain capabilities.
- When sufficient liquidity and Chainlink price feeds are available, the Moonwell community will have the opportunity to vote for activation of the Moonwell protocol on Base mainnet.
Voting
All Moonwell community members are encouraged to vote on this proposal. Voting options include:
- Yes: Activate the Moonwell protocol on Base mainnet
- No: Make no change
Conclusion
Building on Base will be instrumental to expanding and growing the Moonwell community. I am massively excited about the possibility of the Moonwell community increasing accessibility to Moonwell and connecting the Polkadot and Kusama ecosystems to the world of decentralised finance via entering the Base ecosystem, especially so early in its development.
To summarise, activating Moonwell on Base presents an excellent opportunity to expand cross-chain interoperability. Base will offer Moonwell access to a massive target audience with similar values to our community.
I welcome any questions, comments, or requests for clarification. The arrival of Base has created an opportunity for the Moonwell community to connect Moonbeam and the greater Polkadot ecosystem with Ethereum in a way that wasn’t previously possible before. Let’s bring the power of DeFi to the next billion users!
