Moonwell

Summary

This proposal seeks to onboard LBTC, Lombard’s liquid-staked Bitcoin (LST), as a new collateral asset on Moonwell’s Base deployment. LBTC combines Bitcoin’s secure, decentralized store of value with Babylon’s PoS yield capabilities, unlocking new opportunities for BTC lending and borrowing. By activating a market for LBTC on Base, we aim to strengthen BTC liquidity, enable leveraged LBTC positions, and introduce looping opportunities with Pendle PT tokens, further enhancing engagement with Moonwell and the broader DeFi ecosystem. LBTC’s integration will allow Moonwell users to benefit from Babylon Points, Lombard’s Lux program, and robust liquidity in BTC-pegged assets. This strategic addition supports Moonwell’s mission to bring the world onchain through powerful, accessible DeFi tools. For additional details, please review the LBTC token documentation, Dune dashboard, and LBTC asset listing forum post.

Token Information

• Name: LBTC
• Token Standard: ERC20
• Total Supply: 11,600 LBTC
• Circulating Supply (Base): 1,263.55 LBTC
• Token Contract: 0xecAc9C5F704e954931349Da37F60E39f515c11c1
• Price Feed: Redstone PoR Oracle (BTC/LBTC) × Chainlink BTC/USD

Gauntlet’s Risk Analysis and Recommendations

Initial Risk Parameters

Parameter	Value
Collateral Factor (CF)	81%
Supply Cap	95 LBTC
Borrow Cap	38 LBTC
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 0.92% reflects LBTC’s high parity with its underlying BTC.
• Liquidity: On-chain liquidity supports trading up to 95 LBTC with 15% slippage, providing sufficient buffer for supply caps.

Voting Options

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