MIP-B37: Add WELL Market to Moonwell on Base
Summary
This proposal seeks to onboard WELL, Moonwell’s governance token, as a new collateral asset on Moonwell’s Base deployment. WELL serves as a foundational component of the Moonwell ecosystem, playing a critical role in enabling decentralized governance, incentivizing liquidity providers across Core Markets and Morpho Vaults, and rewarding Safety Module stakers who help to backstop the protocol against potential shortfall events. By activating a market for WELL on Base we can strengthen token liquidity, create new lending and borrowing opportunities, and foster further engagement with the Moonwell ecosystem.
For additional details, please review the WELL token documentation and WELL asset listing forum post.
Token Information
Name: WELL Token Standard: xERC20 Total Supply: 5,000,000,000 Circulating Supply: 3,142,645,838 Token Contract: 0xA88594D404727625A9437C3f886C7643872296AE Price Feed: Chainlink WELL/USD
Gauntlet’s Risk Analysis and Recommendations
Initial Risk Parameters
| Parameter | Value |
|---|---|
| Collateral Factor (CF) | 65% |
| Supply Cap | 75,000,000 (~$4.7M) |
| Borrow Cap | 37,500,000 (~$2.3M) |
| Protocol Seize Share | 3% |
| Reserve Factor | 0.25 |
Interest Rate Model
| Parameter | Base Value |
|---|---|
| Base Rate | 0 |
| Kink | 0.45 |
| Multiplier | 0.22 |
| Jump Multiplier | 3 |
Supporting Data
Gauntlet conducted a detailed risk analysis to define these recommendations based on WELL’s volatility and market liquidity:
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Volatility & Max Drawdown: The maximum and minimum daily log returns for WELL are 21% and -22.93% respectively over the past 180 days. Given the volatility exhibited by WELL we recommend that Collateral Factor to align with that of AERO. We therefore recommend a CF of 65%
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Supply and Borrow Caps: Borrow and supply caps are the primary parameter recommendations we can make to mitigate protocol risk when listing new assets. Gauntlet recommends setting the borrow and supply caps strategically with available liquidity on-chain. On Base, there is sufficient liquidity to trade upto 75M worth of WELL tokens with a slippage of 25% signalling a maximum cap setting of WELL tokens at this level. We recommend setting the borrow cap at 37.5M accordingly to adjust for kink level and provide sufficient buffer to prevent any governance exploits given the quorum requirements.
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Interest Rate Curve:
| Utilization | Borrow APR | Supply APR |
|---|---|---|
| 0% | 0% | 0% |
| 45% | 9.9% | 3.3% |
| 100% | 174.4% | 131.3% |
The interest rate curve features a kink at 45%, ensuring competitive rates while incentivizing balanced utilization.
Voting Options
- Aye: Approve the proposal to activate a core lending market for WELL on Base with Gauntlet’s specified initial risk parameters.
- Nay: Reject the proposal.
- Abstain: Abstain from voting on this proposal.
| Voter | Cast Power | Vote & Rationale |
|---|---|---|
 0x5027...087ff8 | 11.714M | FOR |
 0xBB2b...2F26fD | 11.437M | FOR |
 0xFFd1...EFd4a1 | 11.13M | FOR |
 0x0a87...05d43b | 8.7M | FOR |
 0xcCa6...822738 | 6.044M | FOR |
VOTE POWER
Proposal Status
- Wed January 08 2025, 06:14 pmVoting Period Starts
- Sat January 11 2025, 06:14 pmEnd Voting Period
- Queue Proposal
- Sun January 12 2025, 06:16 pmExecute Proposal
Current Results
1-FOR
143.533M
2-ABSTAIN
9.167M
3-AGAINST
139,244.42