Weekly Governance Update: Week of March 11, 2024
The second week of March included regular risk analysis from Moonwell contributors, an initiative to begin the technical changes needed to support the xERC20 token standard and monthly “Reward Speed” proposals for Moonbeam and Moonriver.
Here are the highlights:
Contributor Updates
Forum post: MIP-M21: Upgrade Wormhole Bridge Adapter on Moonbeam
Author: elliot
Summary: WELL is in the process of upgrading to the xERC20 standard, enabling the token to be used on Base for voting and staking. In preparation for this, contributor Elliot from Solidity Labs proposed MIP-M21 on Friday to upgrade the Wormhole Bridge Adapter on Moonbeam. The proposed upgrade would improve the user experience of bridging, automatically unwrapping the WELL (xERC20) back to the original Moonbeam WELL token on transfer. This proposal, if passed, will lead to the creation of two new governance proposals. See the forum post above for more detailed security considerations and codebase changes.
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Forum post: Gauntlet Base, Moonbeam, Moonriver Weekly Market Update
Author: Gauntlet
Summary: Gauntlet posted a weekly update on Saturday for the Moonwell markets covering the previous week.
- Base: One asset had an average supply cap usage of over 75%: DAI (77.52%, down from 87.53% last week). The deployment had no liquidations in the past week.
- Moonbeam: Four assets had an average utilization of more than 75%: FRAX (106.38%), USDC (81.40%), xcUSDT (83.39%), and xcUSDC (77.75%). Four assets experienced liquidations: mDOT ($4.91K), mGLMR ($1.45), mFRAX ($873.38), and mUSDC.wh ($16.21).
- Moonriver: FRAX was the only asset that experienced an average utilization of >75%, coming in at 88.46%. $20.43K of mFRAX, $1.10K of mMOVR, and $10.69 of mUSDC were liquidated.
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Forum post: Guantlet Guardian - USDC and DAI Cap recommendations on Base
Author: Gauntlet
Summary: Gauntlet announced their use of Cap Guardian to alter the borrow caps and supply caps for USDC and DAI on the Base network. USDC supply cap was changed from 15M to 20M, and the borrow cap was changed from 12M to 18.2M; DAI supply cap was changed from 2.5M to 2M, and the borrow cap was changed from 2M to 1.5M. The decrease in DAI caps was put in place to prevent concentration risk due to declining circulating supply. The two transactions (1 and 2) for USDC and two transactions (3 and 4) for DAI were executed on March 14.
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Forum post: Add WBTC Market to Moonwell on Base
Author: Gauntlet
Summary: In the last weekly update, @coolhorsegirl proposed activating a WBTC (Wrapped Bitcoin) market on Moonwell. The proposal first went up for a Snapshot vote, and it passed with 99.22% consensus. On Monday, Gauntlet stepped in to offer their initial parameter recommendations for the asset, conditional on WBTC having significant DEX liquidity and availability on Base. For risk parameters, they recommended a 0 CF, a supply cap of 0.00010001, a borrow cap of 0.00001, and a protocol seize share of 3%. For IR curves, they recommended a 0 base, 0.45 kink, a 0.04 multiplier, a 3.00 jump multiplier, and a 0.25 reserve factor.
Delegate Coolhorsegirl gave a small update on Friday that, following Gauntlet’s analysis, the onchain proposal to add a WBTC market to Moonwell on Base was near.
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Forum post: xcUSDT Liquidity Analysis and Recommendations
Author: Gauntlet
Summary: Gauntlet provided an update on a potential exploit on Parallel Finance on Friday. At the time, there appeared to be an exploit involving a DOT price mismatch in their lending market. At the time of posting, there were no signs of malicious use of USDT liquidity pools. The risk analysis firm mentioned that they will continue to monitor this situation and will recommend lowering the borrow cap for USDT to 800k
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Delegate Updates
Proposals: MIP-M20 (WELL) and MIP-R14 (MFAM)
Author: curly
Summary: On Monday, delegate @curly submitted his monthly “Reward Speed” proposals for Moonbeam and Moonriver. These proposals rebalance liquidity incentives in an effort to maintain healthy levels of rewards on the networks. The Moonriver proposal seeks to adjust the rewards on the Safety Module to emit 2,431,211 MFAM over the next 28 days. The DEX Rewarder would emit 2,725,903 MFAM over the next 28 days.
The Moonbeam proposal seeks to adjust the rewards on the Safety Module to emit 6,778,846 WELL over the next 28 days. The DEX Rewarder would emit 721,154 WELL over the next 28 days. Various asset markets had supply-side rewards adjustments:
- The GLMR market supply side reward would increase from 6.53% to 7.25% and the rate of WELL incentives (supply side) would increase from 1,938461.41 WELL / cycle to 2,215,384.47 WELL / cycle. The GLMR market incentives (supply side) would increase from 29,434.65 GLMR / cycle to 33,639.60 GLMR / cycle.
- The xcDOT market proposed supply side APRs would increase from 18.52% to 19.89%; both WELL and GLMR supply side incentives would increase from 1,730,769.12 WELL / cycle to 2,076,922.94 WELL / cycle and 26,280.94 GLMR / cycle to 31,537.13 GLMR / cycle, respectively.
- The xcUSDT market proposed supply side APRs would decrease from 24.65% to 22.04%; both WELL and GLMR supply side incentives would decrease from 415,384.59 WELL / cycle to 346,153.824 WELL / cycle and 6,307.43 GLMR / cycle to 5,256.19 GLMR / cycle, respectively.
- The FRAX market proposed supply side APRs would decrease from 13.83% to 10.61%; both WELL and GLMR supply side incentives would decrease from 1,107,692.24 WELL / cycle to 830,769.18 WELL / cycle and 16,819.80 GLMR / cycle to 12,614.85 GLMR / cycle, respectively.
- The BTC.wh market proposed supply side APRs would decrease from 2.57% to 2.05%; both WELL and GLMR supply side incentives would decrease from 692,307.65 WELL / cycle to 553,846.12 WELL / cycle and 10,512.38 GLMR / cycle to 8,409.90 GLMR / cycle, respectively.
- The USDC.wh market proposed supply side APRs would decrease from 14.11% to 10.28%; both WELL and GLMR supply side incentives would decrease from 415,384.59 WELL / cycle to 207,692.29 WELL / cycle and 6,307.43 GLMR / cycle to 3,153.71 GLMR / cycle, respectively.
- The xcUSDC market proposed supply side APRs would increase from 30.17% to 35.36%; both WELL and GLMR supply side incentives would increase from 346,153.82 WELL / cycle to 415,384.59 WELL / cycle and 5,256.19 GLMR / cycle to 6,307.43 GLMR / cycle, respectively.
Outcome: MIP-M20 and MIP-R14 passed their onchain voting period and entered a 24-hour timelock.
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