Moonwell

Summary

This proposal seeks to onboard tBTC, a decentralized Bitcoin-backed token, as a new collateral asset on Moonwell’s Base deployment. Unlike traditional Bitcoin-pegged assets reliant on centralized intermediaries, tBTC uses a decentralized threshold cryptography design secured by the Threshold Network. This ensures trust minimization, censorship resistance, and complete transparency, aligning with the core principles of decentralized finance (DeFi). Listing tBTC on Moonwell will strengthen Bitcoin liquidity, empower users with a decentralized option for earning yield on their Bitcoin, and create collaboration opportunities with the Threshold Network DAO. For additional details, please review the tBTC token documentation and the tBTC asset listing forum post.

Token Information

• Name: tBTC
• Token Standard: ERC20
• Total Supply: 4,651.88 BTC
• Circulating Supply (Base): 340 tBTC
• Token Contract: 0x236aa50979d5f3de3bd1eeb40e81137f22ab794b
• Price Feed: Chainlink tBTC/USD

Benefits to the Moonwell Community

1. Decentralized Bitcoin Liquidity: Strengthens Moonwell’s lending markets with a decentralized, censorship-resistant Bitcoin-backed token.
2. Increased User Opportunity: Empowers users to earn yield on their Bitcoin through Moonwell’s Base lending markets.
3. Collaborative Growth: Opens opportunities for co-marketing and ecosystem development with the Threshold Network DAO.
4. Trust Minimization: Fully permissionless and backed 1:1 with Bitcoin, tBTC reduces reliance on centralized entities.

Gauntlet’s Risk Analysis and Recommendations

Initial Risk Parameters

Parameter	Value
Collateral Factor (CF)	81%
Supply Cap	45 tBTC
Borrow Cap	18 tBTC
Protocol Seize Share	30%
Reserve Factor	10%

Interest Rate Model

Parameter	Value
Base Rate	0%
Multiplier	7%
Jump Multiplier	2x
Kink	35%

Interest Rate Curve

Utilization	Borrow APR	Supply APR
0%	0%	0%
35% (Kink)	2.45%	0.77%
100%	131.5%	118.4%

The interest rate curve features a kink at 35%, ensuring competitive rates while incentivizing balanced utilization.

Supporting Data

• Volatility: Annualized 30-day log volatility of 1.47% reflects tBTC’s high parity with Bitcoin.
• Liquidity: On-chain liquidity supports trading up to 45 tBTC with 15% slippage. Caps are set conservatively and will be adjusted as market conditions evolve.

Voting Options

• Aye: Approve the proposal to activate a core lending market for tBTC on Base with Gauntlet’s specified initial risk parameters.
• Nay: Reject the proposal.
• Abstain: Abstain from voting on this proposal.