Monthly Governance Calls

Announcements & Updates Updates
29

Monthly Governance Call – June 2026 Recap

:link: Call Recording

Welcome & House-Keeping

  • Moderator: Alex (Boardroom)
  • Speakers: Luke and Darren/0xMims (Lunar Labs), Chris (Anthias)
  • Quick overview:
    • A short-and-sweet call with the usual slate of speakers and two community questions addressed in a dedicated Q&A section.
    • Alex opened by thanking delegates for recent forum engagement, highlighting two active discussion threads: Fechuky’s on Moonwell chain expansion and Chidi’s on risk management systems. Community members were encouraged to read both and leave feedback.

Moonwell Core Contributor Updates (Luke @ Lunar Labs)

  • Successful Ethereum Mainnet launch
    • Luke congratulated everyone who helped activate Moonwell on Ethereum Mainnet, crediting the Lunar Labs team for the smart contracts and the new governance system enabling best-in-class voting across all four networks Moonwell is deployed on.
    • The new markets have already attracted over $2.5M in TVL in just the first couple of weeks, supported by healthy liquidity incentives.
  • Feedback requested on next markets
    • The launch began with a conservative, blue-chip-only set: cbBTC, USDC, ETH, and USDT. Luke invited community input on what to add next — e.g., Lido staked ETH as collateral — via the governance forums.
  • Feedback requested on chain expansion
    • Luke flagged new L2s and alternate EVM environments, such as Circle’s Arc Network, as potential expansion opportunities and asked the community to weigh in on where Moonwell should go next.

Governance & Community Proposals (Darren/0xMims @ Lunar Labs)

  • Darren amplified Luke’s points, noting Moonwell contributors are actively evaluating alternative EVM environments. He pointed the community to Fechuky’s forum discussion covering Circle’s Arc Network, among others.
  • He also raised real-world assets potentially having their own listings as an open and interesting discussion to be had.
  • Call for new assets: Darren encouraged anyone connected to teams interested in listing a new asset on Moonwell to reach out, either on the forums or to him directly.

Risk & Parameter Updates (Chris @ Anthias)

  • June risk recs (Base & OP Mainnet)
    • wrsETH wind-down: Decreased wrsETH collateral factor from 74% → 68% on both Base and OP Mainnet, beginning the process of unwinding these markets. Chris noted this follows the Kelp DAO rsETH incident involving Aave and LayerZero; Moonwell was not affected, having maintained a risk-off stance on rsETH previously.
    • cbETH deprecation (OP Mainnet): With cbETH liquidity essentially non-existent on OP Mainnet, the market is being deprecated (reserve factor increased to 99%, collateral factor decreased to 1%, and the interest rate curve flattened to a fixed 1% borrow rate).
  • Bad debt & cbETH remediation (executed)
    • ~$550K of bad debt was repaid using protocol reserves, withdrawn across various markets.
    • ~1.4 cbBTC was withdrawn from reserves to be distributed to users affected by the cbETH incident.
  • July risk recs (newly proposed)
    • Base: wrsETH collateral factor decreasing further from 68% → 52%; USDC interest rate multiplier raised slightly from 0.056 → 0.06 (modestly increasing the borrow rate at the kink); MAMO interest rate curve multiplier decreased from 0.45 → 0.26 (lowering the rate at the kink).
    • Includes a further reserve withdrawal of ~$35K toward bad debt repayment and ~$35K toward users affected by cbETH. Once all reserves are withdrawn and swapped, they will be distributed to affected users.

Community Q&A Highlights

  • Hardening against newly launched frontier AI models
    • Asked what’s being done to defend against new frontier models (e.g., Mythos and the Mythos-class Fable) capable of discovering vulnerabilities in older codebases, Luke explained the team takes this seriously and is using the latest AI tools for its own internal red-teaming of the entire codebase.
    • He noted the core markets are largely powered by the Compound v2 codebase (battle-tested over six years across billions in TVL with no novel exploits found to date) while the Morpho vaults and isolated markets use Morpho’s immutable, heavily audited contract system with very small codebases (~600 lines in the vaults).
    • The team’s approach: every contract change is audited internally, run through their own AI tooling, and passed through typically two human auditors. Luke also noted Moonwell is bringing on security consulting firm Sherlock (in addition to Halborn and others) for more sets of eyes and cutting-edge AI auditing tools. The theme: using AI to fight AI, alongside human auditors armed with AI tools.
  • Staking rewards on Ethereum & voting
    • Asked when staking on Ethereum would begin earning rewards, Luke reframed around where users prefer to vote. Voting power counts across all four networks, but voting on Base or OP Mainnet costs less than a penny vs. ~25–50¢ on Ethereum Mainnet depending on gas.
    • There are currently no plans to add staking rewards on Ethereum Mainnet yet. Users can stake there, but without rewards. Luke pointed to Base as a primary location given low-cost voting, Morpho vault revenue generation, and future opportunity to participate in WELL buybacks.
    • On buybacks: once bad debt is fully repaid, the team would like to resume WELL buybacks based on protocol revenue, most of which is currently generated on Base. Community feedback welcome if users would prefer to stake/vote on Ethereum.
  • Real-world asset exposure
    • Luke closed by noting that as many RWAs across DeFi face depegging challenges, none of the Moonwell vaults or core markets are exposed to the affected real-world assets. He credited Anthias Labs’ cautious, conservative approach of supplying only into blue-chip collateral (Bitcoin, Ethereum, and others), comparing risky RWA structures to a long-term treasury that can’t return cash on demand. He sees long-term potential in RWAs but believes the industry needs to mature before they can be safely supported.

Action Items & Dates

  1. Provide feedback on which markets to add next on Ethereum Mainnet (e.g., wstETH) via the governance forums.
  2. Weigh in on H2 chain expansion targets (e.g., Circle’s Arc Network) on Fechuky’s forum discussion.
  3. Reach out (forums or directly to Darren) if connected to teams interested in listing new assets.
  4. Review the newly proposed July risk recs from Anthias.
  5. Let the team know on the forums if you’d prefer staking/voting on Ethereum Mainnet.
  6. Next call: Thursday, July 30th (last Thursday of July).
Monthly Governance Reports