Moonwell

Author(s): Block Analitica and B.Protocol Related Discussions: https://forum.moonwell.fi/t/introducing-moonwell-metamorpho-vaults-next-gen-defi-lending/960 Related Previous Proposal: MIP-B21: Accepting Ownership and Incentivizing Moonwell MetaMorpho Vaults

Summary

This proposal seeks to extend and optimize the highly successful Moonwell Flagship Vaults incentives program for an additional 6-month period. Since launching on Base in July 2024, the Moonwell Flagship Vaults have emerged as the dominant market leader on Morpho’s Base deployment, attracting a peak TVL of $138M, and demonstrating unmatched growth and adoption. Given the program’s success and the significant appreciation in WELL token value since the initial grant, we propose a revised incentive program of 18M WELL tokens (reduced from 50M) for the next 6 months.

Success of Initial Program

Since the activation of Moonwell Flagship Vaults in July 2024, we have achieved exceptional growth and overwhelming market dominance.

Current Vault TVL:

• Moonwell Flagship ETH Vault: 21.5K ETH ($66.16M)
• Moonwell Flagship USDC Vault: 40.63M USDC ($40.63M)
• Moonwell Flagship EURC Vault: 2.01M EURC ($12.69M)
• Total TVL: $119.48M

Market Dominance:

• Moonwell Flagship Vaults represent 84% of all Morpho Vault TVL on Base
• Flagship ETH Vault: 8x larger than the next largest ETH vault (Re7 WETH at $8.2M)
• Flagship USDC Vault ($40.63M): 22x larger than the next largest USDC vault (Gauntlet USDC Core at $1.82M)
• Flagship EURC Vault ($12.69M): 64x larger than the next largest EURC vault (Gauntlet EURC Core at $195.52K)

Key Achievements:

• Explosive Growth: In October alone, the Moonwell Flagship Vaults achieved a 224% TVL increase
• Market Leadership: Moonwell Flagship Vaults dominate key lending markets:
  • 93% of the wstETH/ETH market (~$20M borrowed)
  • 80% of the cbBTC/USDC market (~$9.5M borrowed)
  • 98% of the wstETH/USDC market (~$10M borrowed)
• Broad Adoption: 18,596 total depositors across the Moonwell Flagship Vaults
• Technical Advancements: Implementation of Block Analitica’s state-of-the-art vault allocation model has enhanced:
  • Risk-adjusted returns for suppliers
  • Profitable leveraging for borrowers
  • Competitive market rates through dynamic reallocation
  • Conservative risk management with blue-chip collateral

This remarkable performance validates our thesis about the demand for optimized lending within the Moonwell and Morpho ecosystems. It also highlights Block Analitica and B.Protocol’s robust risk management expertise and continued pursuit of further innovation.

Proposed Renewal Terms

Incentive Allocation:

• Total WELL Tokens: 18M WELL (reduced from 50M)
• Duration: 6 months (December 16, 2024 - June 16, 2025)
• Distribution: Flat allocation across three 2-month periods, distributed by and subject to the discretion of the Morpho DAO:
  • Months 1-2: 6M WELL
  • Months 3-4: 6M WELL
  • Months 5-6: 6M WELL

Unchanged Parameters:

• Vault Ownership: Moonwell DAO
• Risk Curation: Block Analitica & B.Protocol
• Performance Fees: 15%, split between Moonwell DAO and Block Analitica / B.Protocol
• Timelock Period: 4 days

Implementation

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

1. Transfer 18M WELL tokens to the Moonwell Morpho URD contract
2. Continue existing distribution mechanism through merkle roots
3. Maintain current operational handling of incentives by the Morpho DAO

Voting

Yay: Approve the 18M WELL token grant for continued incentivization of Moonwell Flagship Vaults for 6 months. Nay: Reject the continuation of WELL incentives for Moonwell Flagship Vaults.

Conclusion

The Moonwell Flagship Vaults have become a cornerstone of Moonwell’s lending ecosystem, delivering unparalleled market dominance, strong user adoption, and consistent TVL growth. Renewing this program aligns perfectly with Moonwell’s mission to simplify lending for everyone while reinforcing our leadership on Morpho.

With 18 million WELL tokens dedicated to liquidity incentives and a performance fee structure designed to increasingly benefit the Moonwell DAO as Vault TVLs grow, this proposal ensures long-term sustainability and rewards continued success.

With over 18,500 depositors in Flagship Vaults and approximately $120M in TVL, this proposal represents a scalable and strategic approach to sustaining Moonwell’s momentum, maintaining market leadership, and advancing its mission to make onchain finance accessible, secure, and simple for all.