Moonwell

Author(s): Block Analitica and B.Protocol Related Discussions: Moonwell MetaMorpho Vaults - Next Gen DeFi Lending
Submission Date: September 10, 2024

Proposal Summary

After the established collaboration between the Moonwell DAO, Morpho DAO, Block Analitica, and B.Protocol to deploy, manage, and incentivize Moonwell Flagship ETH and USDC Morpho Vaults, this proposal seeks to expand vault listings by creating a new Flagship Vault on Base that would accept EURC. With this initiative, we aim to attract new capital and activity to the Moonwell ecosystem, targeting EUR-based stablecoin users seeking risk-adjusted yield. The new EURC vault is proposed with the same role assignments as the ones present for existing USDC and ETH Flagship vaults. A 15% performance fee will be implemented, with the Moonwell DAO’s share being directed to Moonwell’s EURC Core Market protocol reserves.

This MIP proposes:

1. Accepting ownership of a new EURC Flagship Vault, expanding Moonwell’s Morpho vault offerings on Base.
2. Updating performance fees for existing ETH and USDC Flagship Vaults from 10% to 15%.

Background and Rationale

Building on the successful collaboration between the Moonwell DAO, Block Analitica, B.Protocol, and Morpho DAO, this proposal seeks to attract new capital and EUR-based stablecoin users seeking risk-adjusted yield. Our existing vaults have already attracted ~$38m TVL, representing over 55% of total supply on Morpho (Base) at the time of writing. The addition of an EURC Flagship Vault creates yield opportunities for EUR-based stablecoin users, potentially attracting substantial new capital and users to the Moonwell ecosystem.

Vault Configuration and Roles

The EURC Flagship Vault will be configured as follows:

• Owner: Moonwell DAO (via the Moonwell Temporal Governor contract)
• Curator: Block Analitica & B.Protocol
• Allocator: Public allocator contract and Risk Manager Multisig
• Guardian: Moonwell Security Council
• Timelock period: 4 days
• Vault name: Moonwell Flagship EURC
• Symbol: mwEURC

Performance Fee and Incentives

This proposal seeks to implement a 15% performance fee for the new EURC Flagship Vault, to be split between Block Analitica/B.Protocol and the Moonwell DAO. The Moonwell DAO’s portion will be added to Moonwell’s EURC Core Market protocol reserves.

This MIP will also adjust performance fees for existing ETH and USDC Flagship Vaults from 10% to 15%.

Impact of Performance Fee Updates

The proposed increase in performance fees is expected to have a minimal impact on user rates:

• USDC vault: Approximately 0.06% drop in current rates
• ETH vault: Approximately 0.04% drop in current rates

These adjustments align the fee structure across all Moonwell Flagship Vaults and are expected to enhance protocol revenue without significantly affecting user yields.

Liquidity Incentives

While an additional WELL token grant is not being proposed for the EURC Vault, the Morpho DAO will be able allocate a portion of the existing 50m WELL grant for the USDC and ETH Flagship Vaults to incentivize and support the new EURC Flagship Vault.

Implementation

If this proposal passes, the following onchain actions will be executed:

1. Moonwell DAO will accept ownership of the Moonwell Flagship EURC Vault.
2. Performance fees for the ETH and USDC vaults will be updated to 15%.

Voting Options

• For: Accept ownership of Moonwell Flagship EURC Morpho vault and proposed markets, and update performance fees as described.
• Against: Reject ownership of Moonwell Flagship EURC Morpho vault and proposed markets, and maintain current performance fee structure.
• Abstain

Conclusion

The addition of an EURC Flagship Vault represents a strategic expansion of Moonwell’s offerings on Base. By leveraging Morpho infrastructure and the risk management expertise of Block Analitica and B Protocol, we aim to replicate the success of our existing vaults and tap into the growing demand for euro-denominated DeFi opportunities.

Updating the performance fees across all Flagship Vaults will also harmonize our fee structure and potentially increase protocol revenue, with minimal impact on user yields.

Approving this proposal will diversify vault offerings, attract new users, and reinforce our Moonwell’s position as a leading DeFi app on Base.