Author: Dave Connor, API3
Related Discussions: Switching Moonwell's GLMR Market to using API3's OEV Enabled Data Feed for GLMR
Moonwell Governance Call: December 2024
Submission Date: 04/06/2025
Summary
Moonwell recently switched to using API3 to supply price data for GLMR/USD on Moonwell’s Moonbeam market. This proposal seeks to boost the yield that Moonwell’s Moonbeam deployment generates by switching to using API3’s dAPIs (data feeds) for all markets. API3’s OEV data feeds have been used in production without problems for months by many lending markets, including Compound V2 forks (like Moonwell) and Compound. Switching the remaining markets on Moonwell to using API3 would simply involve changing the addresses that the data feeds are read from, as with the switch for GLMR/USD.
This proposal does not compete with The Solidity Labs onchain OEV solution currently used by Moonwell on Superchain L2s, which is expected to not reliably work on chains where MEV exists, such as Moonbeam.
Similarly, while this proposal directs the revenue from OEV to the addReserves function of the GLMR core maket on Moonbeam, there are many alternatives that could be explored in future proposals from the Moonwell community, such as reducing effective liquidation penalties.
Overview
A more detailed description of how API3’s OEV solution works can be found in the previous proposal, and in Api3’s docs. There is also a video which looks into the differing approaches to OEV design between Solidity Labs and API3 in more detail.
Since GLMR/USD was switched from Chainlink to API3 in late April, API3 helped return over $680 to Moonwell on Moonbeam, via the addReserves function on the contract. The OEV returned to Moonwell represented approximately 87% of potential value that could have been recaptured, which can be used as a more reliable figure to demonstrate performance than absolute $ value, which will be low during periods of time where market volatility is lower. A breakdown of this, showing all liquidations, can be seen here. Note that the OEV Dashboard shows all Moonwell liquidations on Moonbeam, so currently underreports OEV percentage. The link in the previous sentence filters by asset, and is more accurate. Switching all feeds over to API3 will help improve the number of liquidations that can have OEV recaptured, as well as the value returned.
This proposal will switch all data feeds used by Moonwell on Moonbeam to API3, which will improve the value recaptured further.
Motivation
The Solidity Labs onchain OEV solution currently used by Moonwell on Superchain L2s is expected to not reliably work where MEV exists, like on Moonbeam. In order to be able to recapture OEV, an alternative solution is needed. API3 has proven the viability of their OEV solution on the GLMR market, and this proposal will extend it to all markets, maximising recapture for Moonwell on Moonbeam.
This can act as a proof of concept for Moonwell, as API3 are willing to support Moonwell’s cross chain expansion plans, and API3 enable recapture on chains even if MEV is available.
Implementation
API3 will ensure every feed currently used by Moonwell on Moonbeam is live and ready to be used. Moonwell will switch from reading prices from Chainlink’s data feeds to equivalent pairs API3’s dAPIs.
The GLMR market has already been switched to using API3. Should this proposal pass, the other markets on Moonwell’s Moonbeam deployment will utilise the following feeds from API3:
xcDOT - DOT/USD
FRAX - FRAX/USD
xcUSDT - USDT/USD
xcUSDC - USDC/USD
ETH.wh - ETH/USD
BTC.wh - BTC/USD
USDC.wh - USDC/USD
These feeds are already live and available at the time of this proposal, and can be viewed, and first party sources verified, on market.api3.org
OEV accrued will be distributed to the GLMR core market on Moonbeam’s reserves using the addReserve function. This process will be visible onchain and verifiable by Moonwell community members. API3 maintains a dashboard showing these metrics as well, available at https://oev-dashboard.api3.org/. For viewing current OEV statistics, note that filtering by asset is necessary, as it currently shows all liquidations on Moonbeam. This link shows the GLMR liquidations only to better check OEV performance - OEV Dashboard
Voting
Yay - Moonwell will switch all current markets from using Chainlink to API3 on Moonbeam. API3 will continue distributing 80% of the OEV proceeds to Moonwell, via the addReserves function on the GLMR core market on Moonbeam.
Nay - No changes will be made
Abstain - Abstain