Moonwell

Summary

This proposal reimburses stkWELL stakers on Base who lost rewards due to the reward calculation bug triggered by MIP-X28.

It creates a Merkl airdrop campaign to fully refund affected users for their pre-bug rewards, sets Base Safety Module emissions to zero going forward, and transitions reward distribution to Merkl claims.

For those unfamiliar, Merkl is an incentive distribution platform headed by the Angle Protocol team. The protocol connects liquidity providers and distributes rewards on behalf of both users and protocols. It leverages both onchain and offchain data to compute rewards and points for campaigns, giving it a range of flexibility. Read more here.

Wallets that overclaimed WELL following the execution of MIP-X28 will not receive additional tokens. A list of these addresses is published below, and they are encouraged to voluntarily return the excess tokens to the Temporal Governor contract. However, these wallets face no legal action should they choose not to.

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Excluded Wallets

Address	Amount Claimed	Amount Earned	Over Claimed
0xE22B0ebE4b97be51fbB007871bC85FB6E1158Ef8	445968896216449815419140	445968.9	445472.34
0x3d0cFCC2BaAf94a8ef9eba1A2C577CC35F20E4bF	40533524780949628548216	40533.52	40512.11
0xe66E3A37C3274Ac24FE8590f7D84A2427194DC17	1567206220420383081996524	1567206.22	1567195.79
0xeb2751d509f2b04d748b2e32e6a7a307a51e8c29	271630709894679949014495	271630.71	271478.02
0xFB3E5CBCc4e995114025862Ceffec1AC94796FDe	222530391861173085739049	222530.39	222412.42
0x98f6484b2400b251705822767117b6BA89A5d70e	3463079512667266617736402	3463079.51	3460859.66
0x9F3fc75C2aA56DB0da8B70A70E63Dc0D27ba4628	1142270956817290842301362	1142270.96	1141659.17
0x6134F7D28B4E6C4b266c36acd6542B7a832c118b	14037633947533432454061	14037.63	14032.35
0x1c0eC596303Ce6666f5a4D24c29e78Cf881cb5d3	1098265359039080330390138	1098265.36	1097542.95
0x200e073f2bb2E6c420dd986F52234815599B58Dd	97536352569904478791370	97536.35	96423.28
0x9C5a7A7326Cb38765990aCfEeeD8F52316a8c0A7	865287767464643428565	865.29	861.10
0xbb7809A2bF7B788CbEf16CA8F1e9D8Ab44756C90	3517936867507719451852	3517.94	3515.69
0x27f52Daa475DA8DCd1e456b2d5e6C7382Bb0774D	21842574285183188700	21.84	21.83
0x40d858CbD3Dfd86397dd9478e2287044419f8926	5703457272455087508267	5703.46	5585.58
0x85c9C226a6287d1A62F77857b687277C9c5011d6	9033210431513985570000	9033.21	8861.52
0xE009ed8E562FC31a88c2B2D8d53d22cd6E65257E	30596256691950541470402	30596.26	30580.62
0x1bB0BdEE9a305de2ebD0a9d9752d690F839DaaA7	2632701197927798369423	2632.7	2628.60
0x35e5f7158957DaabE0c3C27D585e01a32A1C405c	664035960555524858855	664.04	651.43
0xc8a5CE9ea6716B04F8c971b591DD0611318ec9D3	5199022686051629619699	5199.02	5087.26
0x5A2F97034b259e53568890cAf132164D5A9a3760	137760144044125155504	137.76	137.59
0x04003e7b28D08bA3A3F9111702Ca8279d786c74C	459670116144668201550	459.67	451.86
0x255aAf3e91f40eF6558f67d10Fcd19cFF44e3582	2731674306562829953632	2731.67	2729.89
0x22723cc5aE5a1B4514ca41F2466E2ADe15Cf529B	1148798372408811878716	1148.8	1144.60

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Background

On August 13, 2025, the execution of MIP-X28 updated reward speeds for the Base Safety Module. This triggered a bug in the reward configuration due to an edge case:

• An address transferred stkWELL to the stkWELL contract, creating a non-zero balance in the contract.
• An admin function was then called on Base to update the reward configuration, which caused reward accruals to inflate.

Key Points

• Impact was limited to Base only.
• User funds were never at risk.
• The overflow caused reward accruals to spike, allowing the first 23 claimants to drain the full four-week reward budget (8.4M WELL).
• Thanks to security practices that only fund rewards on a per-period basis, losses were limited to that reward window.

This proposal ensures stkWELL stakers are fully reimbursed for their legitimate rewards.

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Proposal

If approved, this proposal will:

1. Allocate WELL to fund a Merkl airdrop for all stkWELL stakers entitled to rewards prior to MIP-X28.

2. Set emissions on the Base Safety Module to zero, preventing further distribution via the staking contract.

3. Transition all Base Safety Module rewards to Merkl-based claims going forward, using Angle Protocol.

4. Exclude the 23 wallets that overclaimed during the bug window.

   • They may voluntarily return excess WELL by transferring to the Temporal Governor contract:
     0x8b621804a7637b781e2BbD58e256a591F2dF7d51
   • Regardless of whether these wallets return the funds or not, they will not face any legal repercussions.
   • If you send within 100 WELL of the overclaimed amount we will consider your debt repaid.

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Rationale

• Restores trust in Moonwell staking by making affected users whole.
• Provides a clean path forward by moving reward distribution to Angle Protocol, avoiding the need for a complete Safety Module liquidity migration on Base.
• Maintains long-term alignment between stkWELL holders and Moonwell governance.

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Implementation

• Take a snapshot of stkWELL balances at the block immediately prior to MIP-X28 execution.
• Generate a Merkl root of stkWELL staker entitlements.
• Deploy a Merkl distributor via Angle Protocol.
• Fund the distributor with the required WELL.
• Communicate claim instructions to stkWELL holders.

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Next Steps

This proposal covers Phase 1 remediation:

• Reimbursing pre-bug rewards.
• Transitioning to Merkl claims.

A future governance proposal will address post-bug rewards using a time-weighted distribution.

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Voting Options

• For: Approve the Merkl airdrop, set Base Safety Module emissions to zero, and transition rewards to Merkl claims.
• Against: Do not reimburse stkWELL stakers or change Base Safety Module reward distribution.
• Abstain