Listing Project: Moonwell
Abstract
Moonwell is an open and decentralized DeFi lending protocol built on Moonbeam and Moonriver. This report covers Moonwell’s mechanism introduction, project progress, token economy, team information, investment institutions and partners, etc. As the first native project in Moonriver and Moonbeam ecology, Moonwell is currently ranked first in Moonriver ecology and will be deployed on Moonbeam soon. It is expected to be the head lending project on Moonbeam.
1. Project introduction
Moonwell is an open, decentralized DeFi lending protocol built on Moonbeam and Moonriver. Moonwell has a large community of users and developers who want to create stable and accessible systems. Moonriver and Moonbeam are scalable, EVM-compatible chains. Moonbeam serves as the gateway to the Polkadot ecosystem, and Moonwell Artemis will allow users to put their idle assets to use by providing liquidity to earn rewards and utilize their assets safely and efficiently.
In February 2021, Moonwell Apollo (MFAM) was successfully deployed on the Moonriver network for the first time, and within two months of its launch, the total locked-in volume of the protocol exceeded US$300 million. There is now sufficient DEX liquidity and Chainlink prophecy machine support on Moonriver, and the team will soon launch the Moonwell Artemis (WELL) protocol to be deployed on the Moonbeam network.
Moonbeam is a parallel chain deployed on Polkadot. Moonbeam is an Ethereum-compatible smart contract platform on the Polkadot network, and benefits from the shared security of the Polkadot relay chain and connectivity to other Polkadot-related chains.
Moonriver is a parallel chain deployed in Kusama. The code of newly launched projects will be deployed to Moonriver first, and the project code can be officially deployed to the Moonbeam network only after the verification is successfully completed.
Moonwell’s goal is to be the most user-friendly, fast and secure DeFi protocol in the ecosystem. With this in mind, the focus is on high security standards. A multi-signature system is implemented for all smart contracts used in the protocol, and Halborn Security’s expert cybersecurity team reviews all contracts prior to deployment. In addition, through a partnership with the ImmuneFi team, a bounty program has been launched that allows security researchers to submit their findings for review and receive a bounty for finding security vulnerabilities.
2. Project Mechanism
The Moonwell protocol is a smart contract from Polkadot (Moonriver and Moonbeam) for providing or borrowing assets. Through the mToken contract, accounts on the blockchain provide assets (tokens such as MOVR/GLMR) to receive mTokens to track account positions or borrow assets from the protocol (holding other assets on the platform as collateral). Moonwell’s mToken contract tracks these balances and sets interest rates for borrowers and lenders through an algorithm.
mToken, mErc20，mGLMR
The Moonwell mToken contains the core logic, with mErc20 and mGLMR adding public interfaces to the ERC20 token and avax, respectively. Each mToken is assigned an interest rate and risk model.
Interest rate: A contract that defines interest rate models that algorithmically determine interest rates based on the current usage of a given market (i.e. how many of the assets offered are liquid). Risk model: It validates the allowed user actions and forbids them if the action does not meet certain risk parameters. For example, Comptroller forces each borrowing user to maintain sufficient collateral on all mToken, otherwise the position is at risk of being liquidated.
Security Module
Moonwell has also introduced a security module, which incentivizes WELL token holders to pledge their tokens into smart contracts for additional rewards. The pledged tokens serve as a mitigation tool in case of a loss event, and the interpretation of the occurrence of a loss event depends on the protocol governance vote.
There are 3 types of loss events：
Smart Contract Risk: A vulnerability or potential attack on a smart contract.
Liquidation Risk: Failure of assets used as collateral due to illiquidity or failure of the liquidator to effectively execute the liquidation.
Predictor failure risk: The failure of the Predictor system to update prices correctly during extreme quotes or network congestion, resulting in improper liquidation due to inaccurate price data.
3. Project Progress
Moonwell Apollo has deployed the lending protocol on Moonriver with more than 2,000 users. The protocol supports 7 coins: BTC, ETH, USDT, USDC, KSM, MOVR, FRAX. Moonwell Artemis will be deployed on Moonbeam in the near future and will likely support: BTC, ETH , USDT, USDC, DOT, GLMR.
As of June 20, 2022, Moonwell Apollo has a total locked volume of US$95 million, ranking it as the number one Moonriver ecosystem project. Lending agreements are an integral part of the DeFi ecosystem, and Moonwell will launch the first native lending agreement in Moonbeam. As the Moonbeam ecosystem thrives, Moonwell will become the leading lending program in the Moonbeam ecosystem.
Data from the Moonwell Apollo lending agreement：
Following the recent drastic market fluctuations, there is a high volume of stablecoin deposits currently available. USDC has the best liquidity, with deposits of up to US$38 million and borrowings of US$13.64 million, with a fund utilization rate of 35.53%.
Officially, BTC has been suspended as a collateralized coin and the collateralization rate of BTC is 0%. The reason is that with only US$1.3 million left in the liquidity amount, BTC can only be deposited, and users can pledge assets other than BTC to participate in lending.
2. Token Economy
Moonwell Artemis Lending Protocol (WELL) will soon be deployed in Moonbeam. WELL token is the native governance token of Moonwell Artemis, and WELL can be used for Staking and Governance after the protocol goes live. The initial circulation of WELL token is only 1% (only public offering release), and the team, private placement and other parts are locked in for 1 year. The WELL public offering price is US$0.026.
1) Token English full name: Moonwell
2) Token short name: WELL
3) Token type: Moonbeam
4) Total number of tokens: 5,000,000,000 WELL
5) Initial circulation amount: 50,000,000 WELL
6) Token allocation and release rules
5. Team Information
Moonwell’s core team also includes several former Coinbase and Google blockchain engineers specializing in DeFi and security.
Moonwell is also partnered with Rome Blockchain Labs (RBL), the same team that built Benqi, the lending and borrowing protocol on Avalanche. RBL provides some of the most experienced developers and designers in the crypto space.
Luke Youngblood — Engineering
— — Former Coinbase Senior Staff Engineer and AWS Principal Engineer
— — Built the Coinbase staking rewards infrastructure
— — Built the Tezos validator node infrastructure and launched the Tezos network
— — Built the Coinbase price oracle, providing Compound protocol with secure price feeds
Lucas Kozinski — Operations & Finance
— — Chief Operating Officer (COO) at Tokensoft Inc
— — Program Lead for the Tezos Betanet Launch
— — Former Management Consultant with Point B
Suzu — Marketing, Communications, Community
— — Marketing and communications specialist
— — Formerly Operations and Community at Solarbeam
6. Investors and Partners
Moonwell closed a US$10 million round of funding in March 2022, co-led by Hypersphere Ventures and Arrington Capital, with participation from Coinbase Ventures, Lemniscap, Robot Ventures, Signum Capital, and others.
About Huobi Research Institute
Huobi Blockchain Application Research Institute (referred to as “Huobi Research Institute”) was established in April 2016. Since March 2018, it has been committed to comprehensively expanding the research and exploration of various fields of blockchain. As the research object, the research goal is to accelerate the research and development of blockchain technology, promote the application of blockchain industry, and promote the ecological optimization of the blockchain industry. The main research content includes industry trends, technology paths, application innovations in the blockchain field, Model exploration, etc. Based on the principles of public welfare, rigor and innovation, Huobi Research Institute will carry out extensive and in-depth cooperation with governments, enterprises, universities and other institutions through various forms to build a research platform covering the complete industrial chain of the blockchain. Industry professionals provide a solid theoretical basis and trend judgments to promote the healthy and sustainable development of the entire blockchain industry.
Contact us:
Website: http://research.huobi.com
Email: research@huobi.com
Twitter： https://twitter.com/Huobi_Research
Telegram: https://t.me/HuobiResearchOfficial
Medium： https://medium.com/huobi-research
Disclaimer
1. The author of this report and his organization do not have any relationship that affects the objectivity, independence, and fairness of the report with other third parties involved in this report.
2. The information and data cited in this report are from compliance channels. The sources of the information and data are considered reliable by the author, and necessary verifications have been made for their authenticity, accuracy and completeness, but the author makes no guarantee for their authenticity, accuracy or completeness.
3. The content of the report is for reference only, and the facts and opinions in the report do not constitute business, investment and other related recommendations. The author does not assume any responsibility for the losses caused by the use of the contents of this report, unless clearly stipulated by laws and regulations. Readers should not only make business and investment decisions based on this report, nor should they lose their ability to make independent judgments based on this report.
4. The information, opinions and inferences contained in this report only reflect the judgments of the researchers on the date of finalizing this report. In the future, based on industry changes and data and information updates, there is the possibility of updates of opinions and judgments.
5. The copyright of this report is only owned by Huobi Blockchain Research Institute. If you need to quote the content of this report, please indicate the source. If you need a large amount of reference, please inform in advance (see “About Huobi Blockchain Research Institute” for contact information) and use it within the allowed scope. Under no circumstances shall this report be quoted, deleted or modified contrary to the original intent.
