As a part of our role as a Governance Facilitator, Boardroom will host Monthly Governance Calls with the community. The purpose of these calls is to dive into important initiatives in Moonwell Governance. We will look into recently passed proposals, as well as those that are live or upcoming, providing a time for the community to ask questions and get answers before voting.
These calls will give a voice to the community and open a direct line of communication between contributors, delegates, and other DAO members.
This thread will contain the agendas, recording links, and other important information from past calls. A copy of these calls will live here in the Forum, as well as on Boardroom. You can find The Moonwell project on Boardroom at this link. To find the Governance Calls, navigate to âInsightsâ > âActivities and Meetingsâ.
Everyone is invited and encouraged to participate in these calls.
Overview:
This call is intended for the entire Moonwell Community including community developers, core devs, delegates, contributors, and new community members to discuss matters related to Moonwell.
The call is currently scheduled for 60 minutes monthly, on the first week of the Month.
Notes and recordings from each weekâs meeting are archived and shared publicly here.
Keep scrolling for the agenda and notes from past meetings
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I am really looking forward to these calls. I think they will go a long way to increasing communication and collaboration in the community. Plus itâs always nice to hear a personâs voice instead of just reading text on a screen where the true emotion and sense of humanity can often be lost
Previous work: temporal governance, base deployment
Current work: nomad collateral repayment proposal, xWELL, cross-chain governance.
Delegate platform: what we are trying to bring to the community
Quotes from Delegates
âMFAM reallocation for liquidity incentivesâ brought up a critical discussion on the runway and the Snapshot proposal process. @coolhorsegirl brought up the exhaustion of 50% of the MFAM incentives, saying: âLetâs reallocate 20% of the MFAM token supply from Developer Grants and Incentives to be used as liquidity incentivesâ. There was a bit of debate between different delegates on how this should have been implemented. Read along with the discussion in the above link.
@Curly stepped in with a few notes, including that the discussion should have been had on the forums first before going to snapshot for a vote, and the protocol could implement protocol-owned liquidity (POL)
@elliot brought up that Protocol-Owned Liquidity (POL) is a hard problem â how can we be sure that the Moonwell DAO goal of facilitating access to decentralized lending remains the north star, while also doing this new thing of âhow do we manage liquidity?â He cited OlympusDAO as an example. He also wanted clarification on which part of the voting process was incorrect.
Moderator:@alex. from @Boardroom
Note: No recording this month. Technical difficulties, you understand.
Agenda:
Rebalancing of Base Liquidity Incentives from @WardenFinance
$PINK airdrop application for Moonwell from delegate @curly
Aera Vault migration from Aera V1 to Aera V2 from @Gauntlet
Base/Moonbeam/Moonriver risk parameter and IR curves updates, plus xcUSDC recommendations from @Gauntlet
Meeting Notes:
@Luke from Lunar Labs provided an update regarding adopting a new WELL token standard. Moonwell will be looking towards migrating WELL to the xERC-20 standard, creating the ability to have a multi-chain governor contract that allows users to lend, borrow, and vote on Base. Voters should look for proposals coming at the end of this month to unify the network under this new standard. Additionally, he noted the expected adoption of Coinbaseâs new Smart Wallets, which are set to deploy soon.
Circulating supply for DAI on Base became critically low. Warden Finance recommended that the lending market supply be capped at 50% of on-chain circulating supply to avoid accumulating bad debt.
Hugo noted that rETH circulating supply did not allow for further growth to be sustained. The total supply for rETH lending market was standing at 55% of the circulating supply on Base. Hugo discussed the changes applied by Warden Finance, including drastically decreasing rewards for the DAI market to help reduce supply and borrow activity and shifting cbETH rewards towards WETH and USDC.
WELL and USDC supply reward distribution for cbETH decreased from 20% to 15% and DAI decreased from 10% to 5%. USDC and ETH both gained 5%, up from 20% and 40%, respectively.
An application went live on the Moonbeam forums for projects to get a share of a community redistribution of $PINK. Of the 1.25% total supply of $PINK that was allocated to Moonbeam, 50% was reserved for deployed Moonbeam projects with active users.
Moonwell delegate @Curly discussed the effort he has led on behalf of Moonwell to receive an airdrop of $PINK. The write-up on the Moonbeam forum for this airdrop proposal can be found here.
Curlyâs successful application for the airdrop request can be found here.
Aera V2 is live in production with users that include Compound and Threshold. It introduces new features, including the ability to generate yield on stablecoins, support for a broader range of assets and strategies, an enhanced security framework, and eliminating imminent loss.
Shaan noted that a previous Multichain hack (a cross-chain router protocol) could have resulted in a total loss of the vaultâs value in Aera V1. He then gave a product demo of Aera and showed off the financial metrics of the in-app vault. Notably, the Moonwell vault has increased its value by ~30% since the posting of the original forum proposal.
Sai discussed the recommendations published on 2/28/2024 for the three Moonwell deployments. Base had 12 risk parameter changes, including increasing reserve factors for wstETH, rETH, cbETH, and DAI and decreasing the DAI supply and borrow cap. Sai also mentioned the recommended changes in wETHâs and DAIâs IR curves. This combination of these actions was meant to manage concentration risk for DAI, improve overall capital efficiency for the protocol, and increase protocol reserves by raising the reserve factors for the Ethereum-based LSTs. Moonbeam had 6 risk parameter changes; Moonriver had one risk parameter change.
@coolhorsegirlproposed to add WBTC lending markets to Base following the assetâs launch on the network. Gauntlet offered to give initial parameter recommendations.
@alex. from Boardroom introduced the speakers and gave a few pieces of housekeeping information before diving into the main points of the meeting. First, multichain governance is live and a great explanation on how to migrate to the new WELL token was put up by @Chrizy on Discord. Second, Alex noted the increased number of proposals that went live in March and commended the community for consistently reaching quorum. Lastly, he announced an upcoming Galxe NFT campaign that will encourage voting on Base now that native WELL is supported. There will be a drawing of the NFT holders and the winners will receive a USDC reward. There will be an official announcement in the future detailing the specific criteria for minting the âBased Voterâ NFT.
As Cap Guardian, Gauntlet has the ability to quickly and efficiently make changes to asset supply/borrow caps without the need for a governance proposal. Recently, they adjusted borrow & supply caps for WETH, wstETH, and cbETH on the Moonwell Base deployment due to a large demand for these assets.
These updates are meant to adjust asset parameters (e.g. collateral factors and borrow caps) to balance risk and capital efficiency. The most recent update recommended the following changes:
Base: Five risk parameters were recommended to be changed: WETH supply and borrow cap (12,500 to 18,000 and 10,500 to 14,000, respectively), wstETH supply and borrow cap (1,800 to 2,100 and 800 to 900, respectively), and USDbC RF (15% to 20%). For IR parameters, only USDC had any recommendations: kink (0.8 to 0.9), multiplier (0.032 to 0.067), and jump multiplier (4.2 to 9.0).
Moonbeam: Seven risk parameters were recommended to be changed: xcUSDC and WGLMR collateral factors (10% to 15% and 58% to 57%, respectively), WGLMR borrow cap (22,500,00 to 10,000,000), WBTC.wh borrow cap (50 to 5), WETH.wh borrow cap (500 to 100), and the reserve factors for xcUSDT and xcUSDC (20% to 25%, each). For IR parameters, four assets were recommended changes: USDC.wh (an increase in multiplier from 0.0845 to 0.0875 and an increase in jump multiplier from 7.2 to 7.4), xcUSDC (an increase in multiplier from 0.0814 to 0.0875 and an increase in jump multiplier from 7.0 to 7.4), xcUSDT (an increase in multiplier from 0.0814 to 0.0875 and an increase in jump multiplier from 7.0 to 7.4), and FRAX (an increase in multiplier from 0.01 to 0.0563 and an increase in jump multiplier from 0.01 to 4.0).
Moonriver: Three risk parameters were recommended to be changed: FRAX reserve factor and collateral factor (15% to 25% and 57% to 53%, respectively) and WMOVR borrow cap (40,000 to 20,000). Only one IR parameter change was recommended for FRAX (increasing the multiplier from 0.0814 to 0.0875 and the jump multiplier from 7.0 to 7.4).
To start, Elliot summarized Solidity Labsâ efforts from the past four months. The broad goal was to make WELL natively multichain, giving the asset voting rights and the ability to be staked in the Safety Module on Base. Should the community decide to move in this direction, these changes enable the WELL token to be used on chains other than Base.
A series of proposals were created to enable multichain governance. In preparation for upgrading WELL to the xERC20 token standard, Solidity Labs proposed MIP-M21 to upgrade the Wormhole Bridge Adapter on Moonbeam. The upgrade was meant to improve the user experience of bridging by automatically unwrapping WELL (xERC20) back to the original Moonbeam WELL token on transfer. He then touched on the technical details of Wormhole message passing. Because the native WELL token is not tied to any one bridge provider, itâs possible to use other bridges (such as Axelar) in the future. Finally, Elliot touched on the security of this upgrade process; he recognized and fixed a potential DoS attack vector while implementing the changes. See the forum post above for more detailed security considerations and codebase changes.
Following the passing of MIP-M21, Solidity Labs proposed MIP-M23 and MIP-M24: Multichain Governor and WELL Migration. This pair of proposals sought to move from Compoundâs Governor Alpha smart contract to the new cross-chain governor, create xWELL, accept ownership of the contracts, and finalize the new governorâs abilities. To do this, Solidity Labs set the pending owners from the old Artemis timelock to the new multichain governor. MIP-M23 was executed from the Artemis timelock and MIP-M24 was executed from the new multichain governor contracts; the latter had to happen after the passing of the first. The multichain governor allows voting participation on multiple chains. Itâs deployed on Moonbeam and there is a vote collection contract on Base. Finally, Elliot gives a âvoting flowâ example of how creating a new governance proposal would work.
Proposal #4 in this process was MIP-B16. This prop sought to enable rewards for users in the Safety Module with the new WELL token on Base. The Safety Module helps to backstop and secure the protocol, rewarding users in the process. If there happened to be a loss on Base, the DAO could vote to apply a haircut to all stakers, making sure the protocol remains healthy. With this proposal, users can earn some yield for contributing to protocol security. This was the final proposal needed to fully activate all components of multichain governance. With all four proposals passed, WELL holders on Base can backstop the protocol, earn rewards, and have a voice in governance.
Elliotâs miscellaneous updates
A new native WELL WETH pool was created on Aerodrome. The rates in the pool are currently high due to a WELL token rate limit.
Moonwell is offering gas subsidies for users to migrate to native WELL.
MIP-M22 passed with a good voter turnout. The Solidity Labs team is currently working with the Nomad team to mint an NFT and then bridge and redeem the underlying assets.
In March, Curly submitted his monthly rewards speed proposals (MIP-M20 and MIP-R14). The main takeaway here is that the DAO is moving rewards away from USDC.wh towards the new xcUSDC.
An application went live on the Moonbeam forums for projects to get a share of a community redistribution of $PINK. Of the 1.25% total supply of $PINK that was allocated to Moonbeam, 50% was reserved for deployed Moonbeam projects with active users. Curly gave an update on his effort led on behalf of Moonwell to receive an airdrop of $PINK. The write-up on the Moonbeam forum for this airdrop proposal can be found here and the successful application can be found here. Curly announced that the $PINK airdrop campaign should be launching within 24 hours. There will be opportunities to get a share of the airdrop once it goes live, such as supplying liquidity to the GLMR or DOT markets and supplying WELL to the Safety Module. The details on the airdrop amounts will be announced shortly.
MIP-B16 Base Safety Module staking rewards from @SolidityLabs
Bolstering FRAX liquidity from @SolidityLabs
Meeting Notes:
@alex. from Boardroom gave a brief introduction before diving into the main points of the meeting. He gave a reminder that the Based Voter Galxe campaign is live until May 10th; any time there is a proposal thatâs votable from Base, users can mint the NFT after the voting period ends. Base voters of the original MIP-M26, the resubmitted MIP-M26, and MIP-B17 will be eligible to mint the Galxe credential.
Coolhorsegirl Updates
Delegate @coolhorsegirl updated the community with important information regarding the newly established Moonwell Foundation. Itâs a Foundation in the Cayman Islands with the purpose of monitoring, activating, and overseeing the Moonwell protocol and the Moonwell ecosystem. She also announced the âI Signed the DAO Constitutionâ NFT issued on Galxe. The blog post containing more information about the Foundation can be found here.
Gauntlet posted their regular recommendations for the three Moonwell deployments. The cap changes were executed via Cap Guardian.
Here are the recommendations:
Base: Recommended borrow caps for cbETH, wstETH, and rETH were increased. The supply cap and borrow cap for USDbC were decreased. The AERO CF was set to 65%. IR parameters were proposed to be changed for cbETH, wstETH, and rETH.
Moonbeam: The borrow cap for USDC.wh was decreased. Reserve factors for xcUSDT, xcUSDC, and USDC.wh were increased. Collateral factors for USDC.wh, WBTC.wh, and ETH.wh were decreased. IR parameters were proposed to be changed for USDC.wh.
Moonriver: The reserve factors for WMOVR, xcKSM, and FRAX were increased. The collateral factor for FRAX was decreased. The borrow cap for FRAX was decreased. IR parameters were proposed to be changed for FRAX and xcKSM.
Sai dived into Gauntletâs most recent weekly update for the Moonwell markets covering the previous week. These updates give an overview of which assets have an average utilization >= 75%, liquidations, protocol growth, and more.
Base: Two assets had an average supply cap usage of over 75%: cbETH (75.71%) and wstETH (85.83%). The deployment had three asset liquidations in the past week: mWETH ($1.82K), mUSDC ($1.71K), and mwstETH ($279.38).
Moonbeam: One asset had an average utilization greater than 75%: xcUSDT (77.98%). Two liquidated assets were reported: mGLMR ($12.58K) and mDOT ($404.72).
Moonriver: One asset had an average utilization greater than 75%: FRAX (88.85%). Two liquidated assets were reported: mMOVR ($107.03) and mxcKSM ($95.88).
After a successful Snapshot signal vote, Gauntlet created an onchain proposal for MIP-B17 Onboard AERO as collateral on Base deployment. The proposal added the native token of Aerodrome Finance as collateral to Moonwellâs Base deployment. Gauntlet set a supply cap at around 6M tokens and the IR curve recommendations were similar to those used for LSTs in the past.
Proposal #4 in the multichain governance process was MIP-B16. This prop sought to enable rewards for users in the Safety Module with the new WELL token on Base. The Safety Module helps to backstop and secure the protocol, rewarding users in the process. MIP-B16 was originally overwhelmingly passed by the community. However, it contained an error that prevented execution. On April 6th, the proposal was re-submitted for an onchain vote and it passed on April 9th.
In a multi-month effort to redeem dormant assets impacted by the Nomad exploit and to bolster the liquidity of the FRAX market on Moonbeam, Elliot announced in April that 2.8M FRAX have paid off bad debt. He addressed the many challenges experienced along the way and thanked the community for being understanding and patient.
Proposal for Moonwell MetaMorpho Vaults from @BlockAnalitica
Meeting Notes:
@alex. from Boardroom gave a brief introduction and announced an upcoming initiative on Galxe. Moonwell recently ran a âBased Voterâ campaign, where the goal was to incentivize users to upgrade their WELL and vote using the native token on Base. The campaign was successful â it resulted in over 200 eligible addresses and 145 successful minters. It also coincided with the largest voter turnout since August 2023; MIP-B17 gathered 145 onchain votes. For this new campaign, Boardroom will be kicking off a full-scale, monthly recurring governance NFT. Each month, $2000 WELL will be rewarded to 20 random NFT minters ($100 each). Every month, thereâs going to be three possible user actions to complete. Users who complete all three of them will be eligible to mint that monthâs NFT. More details will be shared soon.
Luke Youngblood Updates
Moonwell Contributor @Luke thanked the community for showing strong support over the years. He touched on the recent announcement of the Coinbase Smart Wallet and outlined how it relates to the wider crypto vision of making onchain finance easy to use. He also thanked Gauntlet, Warden Finance, and Solidity Labs on the risk management, incentive optimization, and development side of things.
Coolhorsegirl Updates
Delegate @coolhorsegirl updated the community with a reminder regarding the rewards speed proposals (MIP-M31 and MIP-R20) that went live just prior to the call. The pair of proposals rebalances liquidity incentives on Moonbeam and Moonriver; she encouraged everyone to go vote on them. Second, she plans to put up a forum post to gather community feedback on possibly expanding Moonwell to Optimism. She mentioned upcoming grants from Optimism to encourage projects to be built there. Aave is currently deployed there, but it lacks certain features like a Safety Module.
Gauntlet recently posted their regular recommendations for the three Moonwell deployments. The cap changes were executed via Cap Guardian.
Here are the recommendations:
Base: Supply caps for WETH and wstETH were increased, while the supply cap for USDbC was decreased. The borrow cap for wstETH was increased and the borrow cap for USDbC was decreased. Three IR curves were recommended to be adjusted: WETH (decreased Multiplier), USDC (decreased Multiplier), and AERO (increased Multiplier).
Moonbeam: Borrow caps for xcUSDC, xcUSDT, xcDOT, FRAX, and BTC.wh were decreased. Reserve Factors for WGLMR, xcDOT, BTC.wh, and ETH.wh were increased. Collateral Factors for ETH.wh, WBTC.wh, and USDC.wh were slightly decreased. Three IR curves were recommended to be adjusted: xcUSDC (decreased Kink and increased Multiplier), xcUSDT (decreased Kink and increased Multiplier), and FRAX (decreased Multiplier).
Moonriver: The single proposed change for Moonriver was an IR curve adjustment for xcKSM (decreased Multiplier).
Sai briefly recapped Gauntletâs most recent weekly update for the Moonwell. These updates give an overview of which assets have an average utilization >= 75%, liquidations, protocol growth, and more.
Base: Four assets had an average borrow/supply cap usage of over 75%: DAI (93.60% borrow cap and 92.66% supply cap), cbETH (83.34% supply cap), USDbC (81.42% supply cap), and rETH (77.56% borrow cap and 99.98% supply cap). The deployment had six asset liquidations in the past week: mwstETH ($14.35K), mWETH.
Moonbeam: One asset had an average utilization greater than 75%: USDC.wh (75.76%). Two asset liquidations were reported: mFRAX ($17.14) and mGLMR ($0.46).
Moonriver: One asset had an average utilization greater than 75%: FRAX (80.78%). Three liquidated assets were reported: mMOVR ($9.69), mxcKSM ($4.04%), and mFRAX ($2.32).
Recently, community member @BlockAnalitica proposed a collaboration between Moonwell, Block Analitica, B.Protocol, and Morpho Blue. Block Analitica is a risk management firm; Morpho Blue is a governance-minimized lending protocol that hosts MetaMorpho, a protocol for creating lending vaults; and B.Protocol is a builder of open-source protocols and risk mitigation infrastructure. This proposal entails creating yield-generating Moonwell MetaMorpho vaults with initial support for USDC and WETH. MonetSupply, on behalf of Block Analitica, went on to outline the proposal details and what makes Morpho Blue good infrastructure to help Moonwell capture activity on Base; Morpho Blue is government-minimized and immutable. He also discussed adding the Moonwell Security Council as a âGuardianâ role. âAllocatorâ and âGuardianâ roles can be changed in the future.
Be sure to attend the next call on the first Wednesday of July!
We usually host calls on the first Thursday of every month, 1 PM EST / 5 PM UTC. For July, this happens to fall on July 4th. Accordingly, we are moving the call to the day before: Wednesday, July 3rd at the same time.
Next Call: July 3rd, 2024. Mark your calendars:Discord
Aerodrome Rewards & a Special Message from @WardenFinance
Adding Swell Networkâs LRT market to Moonwell from @kilian_swell
Meeting Notes:
@alex from Boardroom gave a brief introduction and announced an update to the ongoing Galxe campaign. First: all of the voter data has been added to the credential sheets for the July campaign and an update will be posted in the July Campaign Discord channel after funds are sent out to the 20 winners. The four proposals that went live on July 31st - the automated reward speed proposals for Base, Optimism, Moonbeam, and Moonriver - will be counted for the August campaign. The third and final campaign for August was posted after this call. He lastly noted that weâve had great turnout on proposals this month; the previous high was 145 on the Based Voter campaign proposal, but this month weâre averaging 195 votes, with the maximum being 237.
Lunar Labs Update
@majin started by thanking Moonwell contributors and community members. He let the community know about the upcoming monthly risk parameter recommendations from Gauntlet which are likely to be posted on Monday; they will set the initial collateral factors on Optimism which were set to 0 for safety reasons. The proposals should be executed the following Saturday, and borrowing can then be enabled. He went on to discuss a change in the structure of the reward speed proposals as Warden Financeâs contract period with Moonwell is coming to an end. A new custom tool was developed to update reward speed proposals on all networks. It submits governance proposals automatically every 28 days. He encouraged listeners to vote on the four reward speed proposals that are currently live to help reach quorum. He then mentioned the increase in forum posts related to adding new markets for liquid staking tokens and he gave an overview of the process for creating these proposals. Finally, he brought up the Basecamp livestream and Moonwell Radio Episode 4 on Twitter/X.
Hugo from Warden Finance on Aerodrome Rewards and a Final Update
Warden Finance previously updated the community on changes and updates to the reward distributions for Moonwell. Wardenâs role as a contributor is now solely managing Aerodrome rewards until the end of August. He first walked through the history of Warden Financeâs contributions to Moonwell. He thanked everyone whoâs been involved in the last year+ of Wardenâs contributions to Moonwell, including Gauntlet and Lunar Labs.
Swell Network is one of the leading liquid staking & liquid restaking protocols with over $1.5b in deposits and over 48,000 depositors. The protocol issues a liquid staking token (LST), swETH, and a liquid restaking token (LRT), rswETH. The upcoming proposal seeks to add a market to Moonwell on Base for rswETH. The speaker discussed the general overview of the token and noted that withdrawals just went live two days ago, making the LRT a complete product. In three to four weeks, native minting will be live. In the meantime, before the proposal goes to a Snapshot signal vote, they are working on finishing the proposal, including adding oracle information.
@alex from Boardroom started the call with a brief introduction. The first update for this month surrounded Boardroomâs efforts shifting away from incentivization campaigns toward long-term, sustainable growth of all aspects of Moonwell governance. On one end, that will entail creating a revamped delegate onboarding process, and on another, there are plans for a community onboarding pipeline. The goal is to make it easier for new entrants coming to Moonwell to find the important things to know, whether they are joining as prospective delegates or community members. The second main point is the launch of one of those changes mentioned above: the new Delegate onboarding system. This structure is essentially a tiered, role-based system for new Moonwell Delegates to be onboarded through. The first role is Junior Delegate, the second is Delegate, and the third and final tier is Super Delegate. There are unique requirements to attain each role, and there are unique tasks for each type of delegate to complete. A Delegate Rush program will coincide with the launch of the new system to encourage newcomers to apply to be a delegate and progress through the roles on a fast-track. Be on the lookout for official announcements of these changes.
Last week, Gauntlet offered their monthly recommendations on risk parameters across the four Moonwell deployments. He mentioned a possible deprecation of the USDbC market in the future. AERO is predominantly a supply market, so he discussed their recommendation to increase supply caps. On Optimism, Sai touched on the risk-off measures taken surrounding WBTC; we are roughly 20 days before the joint venture between BitGo and BiTGlobal formalizes, so they are expecting volatility in the market (e.g. many people swapping wBTC for other assets). Finally, for Moonbeam and Moonriver, he discussed the ongoing narrative of decreasing TVL across those two chains.
Base: Both supply and borrow caps for AERO were increased. Collateral Factors for WETH, cbETH, wstETH, and rETH were increased while the Collateral Factor USDbC was decreased. The Reserve Factor for USDbC was increased. IR parameters were recommended to be adjusted: AERO (increased Jump Multiplier) and USDC (decreased Multiplier).
Optimism: WBTC Borrow Cap was decreased, WBTC Reserve Factor was increased, and WBTC Collateral Factor was decreased. IR parameters were recommended to be adjusted: USDC (increased Kink, decreased Multiplier, and increased Jump Multiplier), USDT (increased Kink, decreased Multiplier, and increased Jump Multiplier), and DAI (increased Kink, decreased Multiplier, and increased Jump Multiplier).
Moonbeam: Borrow caps for USDC.wh, xcDOT, WETH.wh, and FRAX were decreased. Collateral Factors for USDC.wh, WETH.wh, WBTC.wh, and FRAX were decreased. One IR curve was recommended to be adjusted: FRAX (decreased Kink and increased Multiplier).
Moonriver: Borrow caps for WMOVR and FRAX were decreased.
This Tuesday, Gauntlet posted their weekly market update.
Base: Three assets had an average borrow/supply cap usage of over 75%: AERO (87.28% supply cap and 83.01% borrow cap), USDbC (90.06% supply cap), and rETH (75.20% supply cap). The deployment had $71,068.08 in liquidations across five assets in the past week: mAERO ($69.83k), mwstETH ($806.55), mWETH ($429.11), mDAI ($1.50), and mUSDC ($0.92).
Optimism: No asset had an average utilization greater than 75%. No liquidations were reported.
Moonbeam: No asset had an average utilization greater than 75%. The deployment had $3.37k in liquidations from one asset in the past week: mGLMR.
Moonriver: One asset had an average utilization greater than 75%: FRAX (83.10%). The deployment had $552.96 in liquidations from one asset in the past week: mMOVR.
Aditya from Kelp DAO created a forum post one month ago with the intention of adding the protocolâs liquid restaking token (LRT), wrsETH, to the Moonwell markets on Base. Kelp DAO is a liquid restaking protocol built on top of EigenLayer; users can stake and restake on the platform to earn rewards and DeFi yields. On August 28th, the proposal went up for a Snapshot vote, but was defeated. On the call, Aditya and Soufia made the case for the community to consider voting for a future Snapshot due to one large wallet comprising most of the ânaeâ votes on the previous proposal. He finished by inviting feedback from anyone who voted for or against the proposal so that any issues could be resolved before the next proposal goes live.
Peter, business development at Origin Protocol, came on the call to give an intro to the protocol and discuss superOETHb, a new LST on Base network. He first gave an overview of the long history of the protocol; super OETH is essentially a new iteration of an older product developed by Origin. This class of LST is meant to be lower risk than restaking, but provide higher yield than staking alone. How it works: it combines liquid staking yield on L1 with compounded rewards on L2 through Aerodrome on Base (and Velodrome on Optimism for superOETHo). Protocol-owned liquidity (POL) is meant to ensure a 1:1 ETH peg. In the future, there may be a proposal to add a market for the asset on Moonwell.
@alex. from Boardroom started the call with a recap of the Delegate Rush program. He reminded the community that weâre in the second half of the first phase of the program, the âApplication Period.â He urged everyone to do their due diligence, look over the new delegation pitches in the forums, and consider delegating to the applicants. The Application Period of the program will close on October 11th and the Delegation Period will last four weeks from October 12th to November 9th.
Martin from Mountain Protocol joined the call to give an introduction to the protocol and the teamâs proposal. Earlier in the month, Julian from the team took to the forums to propose adding a market to Moonwell on Optimism for wrapped USDM (wUSDM). Mountain Protocol is the issuer of USDM, a USD-denominated, regulated, permissionless, yield-bearing stablecoin backed fully by US Treasuries. Martin mentioned that the protocol operates similarly to USDC or PYUSD, but Mountain Protocolâs business model passes the yield back to the holders rather than being captured by the issuer. He explained the advantages of holding USDM, including receiving a floor yield through low interest rate environment conditions. He also explained its rebasing mechanism. He wrapped up by mentioning a program from Optimism to provide incentives to protocols integrating yield-bearing assets and touched on regulatory concerns. Should the community decide to move forward through a successful Snapshot proposal, Gauntlet will provide risk assessment before the proposal moves onchain.
KelpDAO created a Snapshot proposal in mid-September to add markets for their LRT, wrsETH, to Moonwell on Base and Optimism. The proposal passed successfully. On the call, Adi and Soufia mentioned the protocolâs adoption on Base and Aerodrome. Adi mentioned that they are waiting for Gauntlet to post market recommendations (which were posted shortly after the call) and that there will be an onchain vote shortly after. Finally, he touched on incentives that would come with the assetâs proposed markets.
Last month, Peter from Origin Protocol came on the call to give an intro to the protocol and discuss superOETHb, a new LST on Base network. This month, Peter discussed an upcoming proposal to add a market for super OETH on Moonwell. This class of LST is meant to be lower risk than restaking, but provide higher yield than staking alone. How it works: it combines liquid staking yield on L1 with compounded rewards on L2 through Aerodrome on Base (and Velodrome on Optimism for superOETHo). Protocol-owned liquidity (POL) is meant to ensure a 1:1 ETH peg. He updated the community with details surrounding the September 9th launch of the LST. TVL has grown from $7M to $320M and the protocol sits atop the DefiLlama list of yields on Base. He finished by mentioning the yield opportunities and the synergies that those DeFi strategies would have with Moonwell. Origin Protocolâs proposal went up later that day.
Last week, Gauntlet offered their monthly recommendations on risk parameters across the four Moonwell deployments.
Base: Both supply and borrow caps for AERO were increased. Supply cap for cbBTC was increased. Both supply and borrow caps for USDbC and DAI were decreased. Reserve Factor for USDbC was increased. IR parameters were recommended to be adjusted: USDC (decreased Multiplier) and cbBTC (decreased Base and increased Multiplier).
Optimism: Borrow and supply caps were increased for WETH. Supply cap for Velo was increased. WBTC borrow cap was decreased. WBTC reserve factor was increased while its collateral factor was decreased. IR parameters were recommended to be adjusted: USDC (decreased Multiplier and increased Jump Multiplier), USDT (decreased Multiplier and increased Jump Multiplier), and DAI (decreased Multiplier and increased Jump Multiplier).
Moonbeam: Borrow caps for WBTC.wh, WETH.wh, and FRAX were decreased. Collateral Factors for USDC.wh, WETH.wh, WBTC.wh, and xcUSDC were decreased. WBTC.wh reserve factor was increased.
Moonriver: IR parameters were recommended to be adjusted: xcKSM (decreased Multiplier).
Last Monday, Gauntlet posted their weekly market update.
Base: One asset had an average borrow/supply cap usage of over 75%: rETH (87.67% supply cap). The deployment had $512,653.61 in liquidations across six assets in the past week: mUSDC ($383.55K), mAERO ($113.52K), mcbBTC ($15.33K), mWETH ($251.15), mcbETH ($1.88), and mwstETH ($0.58).
Optimism: Three assets had an average utilization greater than 75%: USDT (84.78%), USDC (84.29%), and DAI (89.23%). The deployment had $1,040.39 in liquidations across two assets in the past week: mOP ($1.04K) and mDAI ($0.39).
Moonbeam: No asset had an average utilization greater than 75%. The deployment had $9,869.45 in liquidations across two assets in the past week: mxcUSDT ($9.77K) and mGLMR ($99.45).
Moonriver: One asset had an average utilization greater than 75%: FRAX (82.28%). No liquidations were reported.
0xMims is Moonwellâs latest delegate. He also is one of two existing delegates who has been onboarded as Moonwellâs first Super Delegates. So far during his contribution period to Moonwell, he has spearheaded the effort to add a Core Market for Circleâs EURC on Moonwell. On the call, he touched on his background with Penn Blockchain and Blockworks Research. He finished by offering assistance to teams or individuals creating forum proposals to add markets for new assets and by bringing up the idea of upgrading the Staking Module.
Throughout September, applicants began submitting pitches for the Moonwell Delegate Rush. We were welcomed on the call by two experienced teams operating in crypto governance for many years; PGov is a team of governance professionals with expertise in DeFi and a long-time interest in Moonwell as users; DAOplomats is a professional governance organization with contributions to protocols like 1inch, Gitcoin, and BanklessDAO across multiple aspects of crypto including grants and tokenomics.
@alex. from Boardroom started the call with a recap of the Delegate Rush program. He reminded the community to look over those new delegation pitches in the forums and consider delegating to the applicants to help them reach 200K WELL. The Delegation Period will end on November 9th. He then gave the Moonwell Minute, discussing Moonwellâs delegate Nakamoto Coefficient, votable supply, and proposal participation.
Moonwell contributor Majin came on the call to discuss a forum proposal created by Luke. Luke previously shared his thoughts on implementing a system to both increase participation in governance and protect against governance attacks, citing a recent attack on Compound. MIP-X05 was then created to:
Reduce the Safety Module cooldown period from 10 days to 7 days on Base and Optimism
Require voting at least once in the last 30 days to claim staking rewards
The proposal was successful. Majin discussed the various comments and ideas being shared on that proposal before addressing Gauntletâs addition of 80K USDC rewards for the cbBTC market to be distributed over the next month. He then addressed the recent TVL growth and Vault growth through Block Analiticaâs recent forum update. He finished by recognizing PGovâs governance forum activity as one of the incoming Delegate Rush applicants.
On October 23rd, Gauntlet offered their monthly recommendations on risk parameters across the four Moonwell deployments. Only three deployments required MIPs. For an explanation of the terminology, see the comment here.
Base: Both Supply and Borrow Caps for DAI and USDbC were decreased. The collateral Factors for USDbC and DAI were decreased while their Reserve Factors were increased. WETH Reserve Factor was decreased. IR parameters were recommended to be adjusted for DAI, cbBTC, WETH, and USDbC.
Optimism: Both Borrow and Supply Caps for WBTC were decreased. The Collateral Factors for WTH, cbETH, wstETH, and rETH were increased. The Reserve Factor for WBTC was increased while its Collateral Factor was decreased. IR parameters were recommended to be adjusted for WETH.
Moonbeam: Borrow Caps for xcUSDC and xcUSDT were increased. Collateral Factors for USDC.wh, WETH.wh, and WBTC.wh were decreased. WBTC.wh Reserve Factor was increased.
Sai also touched on other topics such as why an increasing utilization typically leads to a high degree of rate volatility (as seen with DAI and USDbC on Base) and a correlation between LST supply and WETH borrow.
Super Delegate 0xMims came on the call to discuss his forum post on potentially adding an additional degree of structure to the voting process. He gave an overview of the governance process employed by Arbitrum as an example. In Arbitrum, Snapshots are put up for a vote every Thursday and there is a week-long vote period; onchain proposals are uploaded on Mondays and executed Thursdays. With this structure, proposals would be started and ended on predictable, set days of the week; this process could aid voters in different time zones and add structure for delegates.
At the start of October, Puffer Finance created a forum post outlining a proposal to add a market for pufETH to Moonwell. The Liquid Restaking Token (LRT) issued by the protocol offers Ethereum liquid staking rewards and integrations across other DeFi platforms. For more on this proposal, including TVL, liquidity, security, and more, visit the forum post above. Amir, the CEO, gave a deep dive into the protocol and what makes it stand out from other LRT providers. He touched on the protocolâs innovations and contributions to the industry, including solving problems like MEV stealing and lazy node operators, introducing Validator Tickets (VTs), and introducing anti-slashers, which were backed by an Ethereum Foundation grant.
Throughout September, applicants began submitting pitches for the Moonwell Delegate Rush. On last monthâs call, we hosted two of the applicants: PGov and DAOplomats. This month, we were welcomed by FranklinDAO. The team - formerly known as Penn Blockchain - is a well-known student-run DAO comprised of University of Pennsylvania students. The post outlines their contributions to major DAOs including Uniswap and their teamsâ experience at crypto firms including Chainlink. For more information, read the post above and consider delegating.
Introduction from Boardroom, Luke Youngblood, and 0xMims
The Great OEV Debate from API3, RedStone Finance, and Solidity Labs
Meeting Notes:
@alex. from Boardroom started the call with the Moonwell Minute, a quick look at quantitative governance data. The first metric was proposal participation; like last month, Alex noted that we are still seeing elevated turnout on proposals. This month, proposals ranged from 173 to 313 votes. The second metric was the participation of the top 1000 delegates. This month, there was a slight change in the voting participation makeup of the delegate base. Both active and inactive delegates decreased (-0.58% and -1.68%, respectively) and there was an equivalent increase in âghostâ delegates (a change of +2.26%). Delegates are classified as âghostsâ if they have never voted on any proposal and âinactiveâ if theyâve voted once (but not on the last 3 proposals). This could be explained by continuing userbase growth on Base and Optimism; as new users come in, it may take some time for them to familiarize themselves with how governance works and cast their first vote.
Moonwell contributor Luke then joined the call to discuss multiple things. First, he talked about the proposal to add a voting requirement to enable users to claim rewards and he mentioned the impact thatâs had on the consistency of reaching quorum on proposals. He urged community members to vote âabstainâ should they not want to express an opinion on a proposal. He also gave an intro to the concept of OEV (Oracle Extractable Value). When a loan is underwater on Moonwell, liquidator bots try to position and in return for paying up to half of that loan, they get some of that borrowerâs collateral plus a bonus of 7%. Itâs a normal market function that keeps markets healthy. He mentioned a large liquidation event earlier this year on August 4th, and he noted that liquidators earned 7% of that $3.6M liquidation. On mainnet Ethereum, there are offchain relays like Flashbots that enable a user to get their liquidation transaction to the top of the block. OEV gives liquidators the right to post a price early, making the markets more efficient when itâs done properly. On the call, we had two providers of offchain solutions debate with a developer of an onchain solution.
During the intro, Super Delegate 0xMims discussed a proposal that he recently created to add WELL Core Markets to the protocol. A few of the factors that preceded this effort included the tokenâs liquidity on Aerodrome, its circulating market cap, and the Chainlink price feed for WELL on Base going live. 0xMims followed the Asset Listing Framework, including information on asset decentralization, risk, oracle assessment, etc.
Dave Connor from API3 posted a proposal for Moonwell to switch to API3âs data feeds on the Moonbeam deployment. The proposal outlined the benefits such as increased revenues for the protocol and the technical simplification of switching due to no code changes being required. On the call, Dave gave the case for why API3 and Moonwell would be a good fit. He first described how API3âs OEV works, which gives people who would trigger liquidations on Moonwell the ability to trigger extra data feed updates; this is a key differentiator from some of the other solutions. Oracles trigger data updates based on the percentage deviation generally between the real world and whatâs already onchain. Rather than waiting for the price of Ethereum to either fall further to hit a deviation-based update or wait for a time-based update to trigger, searchers are able to see that position and they bid for the right to trigger an extra data feed update. Moonwell would get 80% of the winning bid; API3 would get 20%. He mentioned that the first iteration would go live on Moonbeam markets. He finished by mentioning that their OEV feeds have been live for six months, one of the longest periods for any solution, and that API3 supports every chain in the Superchain.
A few weeks ago, RedStone proposed implementing their OEV technology on Moonwellâs AERO market to capture liquidation profits usually taken by third-party bots, redirecting 50% back to Moonwellâs reserves. Successful testing may lead to expansion to other markets, further enhancing protocol revenue. On the call, Kuba first mentioned that RedStone was the fastest-growing oracle in 2024. He also brought up their current partners, including Ethena, EtherFi, Fraxlend, and others, and that RedStone has just gone through the due diligence process on Compound. He discussed the risks involved, including creating bad debt. He stated that RedStone limits the delay to 500ms, as they use the offchain auction mechanism built by Fastlane. The second threat he discussed was hacks and he gave a recent example from Compound when a small code base change was made that distributed rewards. RedStoneâs solution requires no code changes; itâs fully Chainlink-compatible. He mentioned that the worst thing that could happen with RedStone is losing the OEV, but never delaying price updates. Kudo commended the idea of an MEV tax (explained by Elliot from Solidity Labs in the next section), but he expressed concern over the idea that it uses gas prices for ordering the MEV transactions - citing the issues with the Chi gastoken from 1inch. He also mentioned the congestion on Base network and how the change could make it worse. He further explained that for all the potential OEV solutions, the market adoption is important; any new type of solution requires the searchers to adapt to that interface and to update their trading bots. He finished by talking about the RedStone product - as a side effect of connecting to RedStone OEV, thereâs the possibility of bringing more price updates onchain than whatâs enabled by the current situation.
Last week, Elliot from Solidity Labs created a forum discussion around Solidity Labâs solution to improve how liquidations occur on Moonwell. He noted the current state of MEV capture for the protocol - professional liquidators compete using bots to earn fees by liquidating risky underwater loans - before proposing the idea that Moonwell could introduce a âMEV tax,â charging liquidators for priority access to update price feeds and execute liquidations. Similar to the other solutions proposed, he recommended a phased approach, beginning with a single market before expanding. On the call, Elliot first gave an intro to Solidity Labs and the work theyâve done with Moonwell, including the launch of the protocol on Base and upgrading governance to the multi-chain system thatâs currently in place. He explained the proposal for an OEV system that can help the Moonwell protocol internalize revenue thatâs normally given to searchers. He mentioned that competitors on Mainnet leave hundreds of millions of dollars on the table every year in terms of liquidations because whenever an Oracle posts a price update, it leads to extractable value that the MEV bots can capitalize on. Solidity Labs is able to create a system that allows the Moonwell protocol to internalize a majority of this revenue. Elliot agreed with Kuba that any new solution requires the searchers to adapt to that interface, and mentioned that they would discuss this change with Flashbots and other relays. He discussed the non-upgradeable, immutable smart contract which has many fallback and safety mechanisms. The initial 30-second time period in which OEV bot operators provide the new price and pay the OEV tax is a parameter that can be adjusted with risk analysis from Gauntlet. It would use the existing Chainlink feeds and it would be fully audited. He welcomed feedback from Gauntlet, Chainlink, or other risk managers.
Dave chimed in to discuss the parameterizable delay discussed by Elliot and Kuba. The searchers that are waiting for big liquidations actually want the volatility; we tend to see more updates when the marketâs volatile. With API3âs solution, instead of seeing bad debt when the market moves rapidly, youâll actually see more data feed updates.
Luke replied once more with some data points, not wanting to express an opinion. Regarding Chainlink on Ethereum mainnet, which has been around for six years, it has seen a lot of volatility through Black Thursday and other market events. It has the advantage of being very Lindy. On mainnet, Chainlink will post a price feed if ETH deviates by 1% or more. Whenever ETH is very volatile, all of the MEV searchers start to bid really heavily right before that 1% price feed lands. That means that theyâre actually looking at centralized exchanges for prices and when the 1% deviation will trigger a price feed update. On Base, the deviation is 0.15%. In general, Base tends to be a safer network to lend borrowable assets on (against ETH). The main point: despite all of the market volatility, like Black Thursday or stETH depegging or USDC depegging, the biggest lending protocols on mainnet have not incurred significant bad debt. He lastly mentioned that API3âs solution was really interesting because it can post the price before it hits that 1% or 0.15% deviation if thereâs a price that people want to post.
Kuba replied directly to Luke. He questioned whether the length of time really ensures the safety of a solution. He gave an example in the form of Venus acquiring bad debt when the TERRA/LUNA crashed. He believed they were connected to Chainlink, but the price still was dropping so fast that and the market was under too extreme conditions. He thinks that Moonwell should be prepared for that kind of a Black Swan event, even if itâs a 0.001% probability. He also replied to Lukeâs question about their data sources; RedStone currently is connected to almost 100 different sources. They query the price from a mix of sources including CEXs, enterprise level data providers like Kaiko, and they also query based on onchain slippage.
Dave also responded to both Luke and Kuba. He first addressed the depeg caused by Luna, stating that it was actually not caused by the rapidity of the movement. It was caused by Chainink oracles having hard-coded a 10 cent minimum price for Luna. A faster pricing update wouldnât necessarily have done anything. Addressing Lukeâs question about data sources, Dave highlighted API3âs verifyability. It works directly with providers that provide big Web2 enterprise grade clients with pricing data. They post the address of the oracle that they operate so that users can verify that the address is indeed operated by a data provider. Aggregation happens onchain. Users can see an aggregated onchain price, and go see exactly what itâs made up of. Verifyability is one advantage that API3 offers versus Chainlink or other providers.