February’s New Moon is upon us, ushering in a few nights of dark skies that are perfect for stargazing, as well as the latest Moonwell Update. Below, we will not only cover the latest protocol and ecosystem developments but also share some exciting news around the launch of Base, Coinbase’s new Ethereum L2 blockchain, and what it means for the Moonwell community. Without further ado, let’s delve into all of the details!
Moonwell has deployed to Base Testnet
Moonwell is one of the first projects to deploy on the testnet for Base, an Ethereum Layer 2 blockchain that is being developed by Coinbase in collaboration with Optimism. Boasting over a decade of industry experience and a verified user base of 110 million, Coinbase is now aiming to spark a new wave of on-chain adoption, and Moonwell is well-positioned to contribute to this movement.
Moonwell’s deployment on Base presents an exciting opportunity for the community to expand its reach and realize its vision of connected smart contracts that have the Ethereum Virtual Machine (EVM) as the foundation layer. With Coinbase’s security and trust-focused values strongly aligned with the Moonwell community’s core principles, this move has the potential to connect the Moonbeam and wider Polkadot ecosystem with Ethereum in ways that were previously impossible.
xcUSDT is Now Supported on Moonwell Artemis
In November 2022, Moonwell Governance achieved a significant milestone with the successful passage of Moonwell Improvement Proposal 7 (MIP-7). The proposal introduced new markets for Wormhole-bridged USDC, ETH, and BTC on the Moonwell Artemis protocol. Originally, the proposal author had intended to include xcUSDT as well, but this was not possible due to the absence of a Chainlink oracle price feed for the asset, which is a prerequisite for creating new markets on Moonwell.
Chainlink has since deployed a price feed for USDT onto Moonbeam, which opened the door for the asset to be supported on Moonwell Artemis. In early February 2023, a contributor from Stellaswap, a decentralized exchange on Moonbeam, submitted Moonwell Improvement Proposal (MIP-26) to Moonwell Governance. This new proposal was successfully passed and activated native Tether USD (xcUSDT) on Moonwell Artemis.
The activation of the xcUSDT market on Moonwell Artemis offers users the ability to lend and borrow xcUSDT, a native form of USDT on Moonbeam and Polkadot. Tether, with over 70 billion tokens in circulation, is one of the largest and most liquid stablecoins in the cryptoeconomy.
xcUSDT is an XC-20 token, which adheres to Ethereum ERC-20 standards. XC-20 tokens function like standard ERC-20s on Moonbeam and can be freely transferred between Polkadot parachains, mitigating the bridge risk usually linked with wrapped and bridged tokens. Moonwell Artemis on Moonbeam and Moonwell Apollo on Moonriver can both support XC-20 assets. The xcUSDT market on Moonwell Artemis launched with Gauntlet Network’s recommended initial risk parameters listed below:
Collateral Factor: 10%
Reserve Factor: 15%
Borrow Cap: 250,000
*These parameters can be adjusted through future governance proposals
The Moonbeam Ignite Campaign Continues to Burn Bright
The Moonbeam ecosystem has continued to gain momentum since the launch of its community driven liquidity initiative, Moonbeam Ignite, in October 2022. Moonbeam Ignite has been instrumental in driving the growth of the network’s DeFi primitives and empowering its burgeoning Web3 ecosystem by providing access to liquidity.
Since the launch of Moonbeam Ignite, Moonbeam has witnessed an impressive 500%+ increase in the number of unique addresses and a substantial increase in total value locked (TVL). This growth is indicative of greater participation in DeFi activities, such as liquidity provisioning on StellaSwap and lending/borrowing on Moonwell.
The significant increase in unique addresses, TVL, and support for Polkadot native assets are clear indications of the community’s continued confidence in the network’s potential.
Beefy Finance has added support for Moonwell
Beefy Finance is a multi-chain yield optimizer that enables users to stake or supply their tokens into audited, smart contract vaults. These vaults are deployed on multiple chains, including Moonbeam and Moonriver, and come with a strategy tied to them. The strategy is part of the smart contract code and defines how the vault works to compound yield. Beefy Finance has recently launched new vaults for xcUSDT, USDC.wh, ETH.wh and WBTC.wh, expanding its offering for Moonwell on Moonbeam.
The Moonwell vaults on Beefy are single-sided, which means users only need to stake one token. The vaults incorporate a multifaceted strategy that involves claiming and swapping rewards and resupplying them to the market. Users are able to withdraw their assets at any time, even though the word “vault” might suggest otherwise.
Latest Governance Updates
On a bi-monthly cadence, Gauntlet Network submits governance proposals that have the ability to adjust asset risk parameters such as collateral factors and borrow caps. This month, Gauntlet Network submitted a series of risk parameter updates proposals for Moonwell Apollo (MIP-24 and MIP-29) and Moonwell Artemis (MIP-25 and MIP-30) to the Governance Forum for community discussion and Governance Portal for on-chain voting. All four proposals were passed and executed.
- Increase the collateral factor of USDC.multi from 64% to 66%
- Increase the collateral factor of USDT.multi from 42.0% to 44.0%
- Increase the reserve factor of MOVR from 20% to 25%
- Decrease the reserve factor of FRAX from 20% to 15%
- Decrease the reserve factor of USDT.multi from 20% to 15%
- Increase the collateral factor of USDC.wh from 30.0% to 40.0%
- Increase the collateral factor of WETH.wh from 25.0% to 35.0%
- Increase the collateral factor of BUSD.wh from 10.0% to 20.0%
- Increase the borrow cap of USDC.wh from 412,000 to 516,000
- Increase the borrow cap of WETH.wh from 275 to 400
- Increase the borrow cap of WBTC.wh from 20 to 30
- Increase the borrow cap of BUSD.wh from 250,000 to 325,000
- Increase the USDC.multi collateral factor from 66.0% to 68.0%
- Increase the ETH.multi collateral factor from 62% to 64%
- Increase the USDT.multi collateral factor from 44% to 46%
- Increase USDC.wh collateral factor from 40% to 50%
- Increase WETH.wh collateral factor from 35% to 45%
- Increase WBTC.wh collateral factor from 25% to 30%
- Increase xcDOT collateral factor from 62% to 64%
- Increase USDC.wh borrow cap from 516,000 to 1,000,000
- Increase WETH.wh borrow cap from 400 to 800
- Increase WBTC.wh borrow cap from 30 to 60
MIP-30 differed from typical risk parameter updates as it incorporated a deprecation plan for BUSD.wh on Moonwell Artemis, in response to regulatory actions taken against BUSD and Paxos. The deprecation plan recommended the following changes:
MIP-30 BUSD.wh Deprecation Plan
- Initiate freeze of BUSD.wh market, including supply and borrow pause.
- Increase the reserve factor of BUSD.wh from 15.0% to 99.0%
- Incremetal reduction of BUSD.wh collateral factor every two weeks until 0% is reached
Additionally, the Moonwell community has successfully passed and implemented MIP-27 for Moonwell Apollo and MIP-28 for Moonwell Artemis. These proposals aimed to adjust liquidity incentives in order to ensure sustainable levels of rewards in the Moonwell ecosystem.
- Representatives from StellaSwap and Beefy Finance joined Moonwell to participate in a discussion regarding the Moonbeam Ignite campaign and to share their insights on upcoming trends in the DeFi space for 2023. The discussion covered a range of topics including the latest updates on projects, new use cases, technical advancements, and trends to watch out for in the coming year.
- Moonwell, StellaSwap, DAM Finance and DIA participated in a roundtable discussion to discuss the world of cross-chain DeFi and the impact of cross-chain interoperability on the industry.
- Moonwell participated in its first ever Polkadot Community Call. This was an opportunity to share the latest developments within the Moonwell ecosystem, including the activation of the xcUSDT market, with the broader Polkadot community.
Moonwell is an open lending and borrowing DeFi protocol on Moonbeam & Moonriver. Moonwell’s composable design can accommodate a full range of DeFi applications in the greater Polkadot and Kusama (DotSama) ecosystem.