Rebalancing of Base Liquidity Incentives (2023-09-14)
Hi everyone,
We’ve a made two changes to Base market reward rates since the last time we gave updates.
On September 14 2023, native USDC market was successfully launched on Moonwell Base deployment. In order to help bootstrap initial liquidity for the market, we have shifted rewards from other markets towards native USDC. We also started reducing USDbC rewards to as a soft deprecation measure for the market.
We plan on fully deprecating USDbC rewards on November 3rd (epoch #4).
| Reward distribution (Sept 14 2023) | cbETH | DAI | USDbC | USDC | ETH |
|---|---|---|---|---|---|
| WELL supply (% of allocation) | 20% →17.5% | 20% → 17.5% | 20% → 10% | 0% → 20% | 40% → 35% |
| WELL borrow (% of allocation) | 0% | 0% | 0% | 0% | 0% |
| Reward speeds (Oct 6 2023) | cbETH | DAI | USDbC | USDC | ETH |
|---|---|---|---|---|---|
| WELL supply (WELL per second) | 0.98 → 0.86 | 0.98 → 0.86 | 0.98 → 0.49 | 0 → 0.98 | 1.96 → 1.71 |
| WELL borrow (WELL per second) | 0 | 0 | 0 | 0 | 0 |
2023-10-06 Epoch #3 allocation updates
On October 6 2023, we applied minor tweaks in order to further encourage migration from USDbC to USDC.
Analysis
- Native USDC market liquidity was successfully bootstrapped with over $1M TVL once rewards were added (~$2.8M supply / ~1.8M borrow). Market remains at healthy levels of liquidity.
- Utilization for ETH market was mostly below the interest rate kink throughout epoch #2. Keeping utilization closely below the kink is ideal from a risk perspective.
- Utilization for DAI, USDbC, USDC and cbETH markets were largely below kink throughout epoch #2.
Specifications
- We have further reduced USDbC rewards to encourage users to migrate to USDC.
- We have increased supply-side rewards for ETH market, as supply activity on the market is very elastic to rates and utilization remains high.
| Epoch # | % per epoch | Total per epoch | Start timestamp | Start date |
|---|---|---|---|---|
| 3 | 5.897% | 12,826,923.08 | 1696629600 | Oct 06 2023 22:00:00 GMT |
| Reward distribution (Oct 6 2023) | cbETH | DAI | USDbC | USDC | ETH |
|---|---|---|---|---|---|
| WELL supply (% of allocation) | 17.5% | 17.5% | 10% → 5% | 20% | 35% → 40% |
| WELL borrow (% of allocation) | 0% | 0% | 0% | 0% | 0% |
| Reward speeds (Oct 6 2023) | cbETH | DAI | USDbC | USDC | ETH |
|---|---|---|---|---|---|
| WELL supply (WELL per second) | 0.86 → 0.93 | 0.86 → 0.93 | 0.49 → 0.27 | 0.98 → 1.06 | 1.71 → 2.12 |
| WELL borrow (WELL per second) | 0 | 0 | 0 | 0 | 0 |
Next steps
- In order to encourage users to migrate to USDC, we will fully deprecate USDbC rewards starting next epoch (Nov 3 2023) if it is safe from a liquidity risk perspective.