It seems there are only 2 posibilities on Moonwell either don’t restrict withdrawals or restrict withdrawals.
because of this people feel insecure about supplying liquidity on markets with bad debt and high APYs.
When supplying to a high APY market there is the fear Moonwell will restrict withdrawals, in the case a restriction must be implemented it should be a 2.5% per month limit so people can use that money if they need to. Also this would encourage more people to supply liquidity on high APY markets since it is kind of a passive income where you can use that 2.5% and you are not totally cut off from your money and you will get some nice high APYs in the process.
Totally restricting withdrawals does more harm than good since it disincentives people from supplying liquidity on those markets, they can’t use their money if they need to. While doing this other way they can keep adding more liquidity to the markets since they see this as passive income, while when withdrawals are fully restricted you won’t add more money knowing you won’t be able to withdraw your liquidity nor know when.
Implementing this criteria would benefit Moonwell ecosystem and help markets in distress to get more liquidity since suppliers feel safer this way rather than a full withdrawal restriction.