Monthly Governance Call – September 2026 Recap
Welcome & House-Keeping
- Moderator: Alex (Boardroom)
- Speakers: Luke (Lunar Labs), Chris (Anthias)
- Quick overview: This month’s meeting was a focused update call for contributors to walk through recent governance actions. Community questions submitted through the Q&A form were largely addressed during Anthias’ update.
Moonwell Core Contributor Updates (Luke @ Lunar Labs)
- Recovery efforts: Since the late-August MAMO market incident, Moonwell contributors have been working with law enforcement and security firm zeroShadow on recovering the funds, which remain on Ethereum mainnet.
- Unaffected markets: Moonwell’s markets on Ethereum and OP Mainnet remain unaffected, as do all Morpho vaults and markets on Base.
- Outlook: Luke is optimistic the protocol can grow its way forward, and expects borrowing on Base can be re-enabled once market conditions improve.
Risk & Parameter Updates (Chris @ Anthias)
- Base risk-off measures: Following the MAMO incident, Anthias began setting supply and borrow caps to 1 wei for markets with low DEX liquidity or low utilization (WELL, MAMO, rETH, tBTC, USDS, and DAI). For tBTC and USDS, collateral factors were reduced as far as possible without force-liquidating users, and reserve factors were raised to 99%.
- Interest rate updates: With utilization near 100% in several markets, borrow rates had climbed into triple digits and interest was accruing rapidly on bad debt. Interest rate curves were updated to target ~20% borrow rates (e.g., USDC), balancing an incentive for suppliers to return against limiting interest growth on bad debt.
- September risk recs (Base): WELL collateral factor decreased from 65% → 55%, MORPHO from 65% → 60%, and AERO from 65% → 60%.
- OP Mainnet: Supply caps were set to 1 wei for rETH, weETH, VELO, DAI, and OP, and borrow caps to 1 wei for VELO, OP, and DAI. Collateral factors for rETH and weETH were reduced as far as possible, with reserve factors raised from ~10% to 99%. The VELO collateral factor decreased from 62% → 60% as part of the September risk recs.
- Oracle deviation monitoring: Anthias continuously compares oracle prices against a secondary reference price (e.g., a DEX pool), with alerts triggered at ~5–10% deviation. Today, a response requires signers on the 2-of-4 Supply Cap Guardian multisig to manually adjust caps, which can take anywhere from a minute to an hour. Anthias is working to automate this process, with the goal of a fully automated system where borrowing is halted protocol-wide if any collateral market’s oracle deviates.
- AERO/VELO migration: Aerodrome is upgrading its token, allowing legacy AERO and VELO to be redeemed for the new AERO token. Anthias will pause supplies to the AERO market on Base and the VELO market on OP Mainnet (borrows are already paused). As DEX liquidity for the legacy tokens declines, Anthias hopes to launch a new core market for the new token and gradually sunset the old markets. Luke added that Aerodrome is expected to announce the conversion process next week, and that borrowers can repay, withdraw, and convert at their convenience.
- Conditions for re-enabling borrowing on Base: Several markets, particularly USDC, have very high utilization and almost no available liquidity. If borrowing were reopened now, users stuck in those markets could borrow from markets that still have liquidity, putting those suppliers at risk. Anthias wants to see liquidity return first so the issue doesn’t spread to other markets (see the forum post).
Discussion Highlights (Luke & Chris)
- Risk-off stance on low-liquidity markets: Luke asked whether Anthias is taking a risk-off approach to low-liquidity markets on Base and OP Mainnet to avoid oracle price manipulation. Chris confirmed: low-liquidity markets are the most prone to manipulation, and if they aren’t widely used or generating revenue, the added risk surface isn’t justified. Luke agreed, noting that Moonwell historically differentiated itself by offering the top Base tokens as collateral, which performed well in bull markets, but carries inherent oracle risk the protocol wants to avoid going forward.
Closing Remarks (Luke)
- Tokenized stocks: Contributors are researching Coinbase’s latest stock token offering and how Moonwell could offer collateral against stock tokens. Morpho recently launched isolated stock-token markets on Base, and research continues into how Moonwell can do so safely.
- Community & track record: Moonwell has over 150,000 token holders on Base, was the first lending protocol to deploy on Base on day one, and has paid over $25M in fees to lenders while generating over $5M in protocol revenue.
- Market outlook: Luke sees the crypto market turning around, with a likely bull market in 2027, and wants to position the protocol and community to grow through the next cycle.
Action Items & Dates
- Vote on MIP-X68 (collateral factor updates).
- Review Anthias’ forum post on the conditions for re-enabling borrowing on Base.
- AERO and VELO users on Moonwell: watch for Aerodrome’s conversion process announcement; repay, withdraw, and convert at your convenience.