§ 01Headline finding#

January was a net-outflow month that left the deposit base smaller but no less loyal. As of January 31, 2026, Moonwell held $172.9 million supplied across Base, Optimism, and Moonbeam, $122.1 million in Core lending markets and $50.8 million in the five Moonwell-Morpho vaults. On a constant-price basis the protocol shed a net $18.0 million of supply over the month, yet 87.7 percent of December's suppliers and 84.8 percent of their dollars were still supplied at the close.

Most of the outflow came from Base, which lost a constant-price net $13.8 million, split between $5.6 million from Core lending and $8.2 million from the vaults. Optimism gave back $4.2 million and Moonbeam was effectively flat. Supply contracted by roughly a tenth on net, but the wallets that remained largely stayed. The month also carried a standing risk that did not originate in January: $4.3 million of borrower positions were already in shortfall at month-end, most of it in the cbXRP and VIRTUAL markets.

§ 02Overview#

Across the Brief, total supplied is shown in three parts: Core lending (the Compound V2 markets), Vaults (the Moonwell-Morpho vaults, which sit on a separate venue), and the Combined total. Core and Vaults are always listed separately.

These levels are oracle-priced at each month-end, so the change reflects both flows and token price drift. On a constant-price basis, isolating deposits, withdrawals, and interest, the net supply flow was a smaller net outflow of $18.0 million, the figure noted in the headline.

All five vaults sit on Base, so Base carried $167.1 million of the $172.9 million combined total, with Optimism and Moonbeam together under $6 million. Core protocol utilization was 40.5 percent. Total Core reserves were $2.3 million. Ethereum is absent: Moonwell did not launch there until late May 2026. All USD figures are constant-price, valued from the Moonwell oracle at the end-of-month block on each chain.

§ 03Markets and real yield#

Core lending was concentrated in a handful of Base markets. USDC was the largest at $34.0 million supplied and $24.1 million borrowed, a 70.8 percent utilization. cbBTC was second at $22.7 million supplied but only 14.1 percent utilized. WETH was the most heavily borrowed large market, $11.6 million drawn against $13.9 million supplied for 83.3 percent utilization.

Not every market shrank. On a constant-price basis several Base markets drew new supply in January: cbETH added $1.0 million (up 28.8 percent on the month), USDC added $940K, LBTC $330K, and AERO $240K, with DAI and USDT growing off small bases on Optimism. The inflows were not large enough to offset withdrawals elsewhere, but demand was not uniformly negative.

The supply APY above is the base interest rate from borrowers, before WELL incentives. The protocol streamed about 238,700 WELL per day in January ($1,176 per day, $429,000 annualized), but spread across the book it added little per market. Only USDC and VIRTUAL cleared the 3.72 percent 4-week US Treasury bill on an all-in basis.

A January USDC supplier earned 3.67 percent from real lending demand, about the risk-free rate, plus half a point of WELL. The staking and restaking collateral (wstETH, rETH, weETH, cbETH) earned almost nothing in base yield and was held as collateral rather than for return.

§ 04Wallets and risk#

Supply was moderately concentrated: the top 10 wallets held 25.5 percent of supplied value and the top 50 held 53.7 percent, across 19,536 active suppliers. The largest single position was $7.4 million. Debt was far more concentrated than collateral: USDC was 49.4 percent of all borrowing and WETH another 24.2 percent, so dollars and ether together were nearly three-quarters of protocol debt, with cbBTC (6.5 percent), cbXRP (5.3 percent), and AERO (4.0 percent) most of the rest.

On the risk side, at month-end $13.4 million of collateral sat in positions within 10 percent of their liquidation threshold, and $4.3 million of borrower positions were in shortfall (borrow value exceeding their collateral limit). This shortfall was not new to January; it stood at $4.58 million at the December close and traces to the protocol's late-2025 oracle problems. The largest standing market was cbXRP ($2.0 million), followed by VIRTUAL ($1.3 million).

Moonwell's Base risk partner, Anthias Labs, was already responding to this standing bad debt. Its end-of-December recommendations raised reserve factors on the affected markets, taking AERO and VIRTUAL to 35 percent and cbXRP from 15 to 35 percent to rebuild reserves, and its late-January risk assessment flagged several markets, including VIRTUAL and MORPHO, whose supply and borrow caps no longer functioned as effective controls.

§ 05Liquidations#

January saw 971 liquidation events across the three chains, seizing $1.60 million of collateral against $1.45 million of debt repaid. Bitcoin-family and XRP collateral drove most of the dollar value: cbBTC accounted for $611,700 across 98 events, and cbXRP added $352,100 across 42. WETH on Base produced the most events at 284 but a smaller $165,600 in seized value.

The most active address on Base cleared 49 liquidations for $55,900 of gross profit on $614,500 of volume.

Profit is gross (collateral seized less debt repaid) and does not subtract gas; a net-of-gas breakdown is not stored and is noted as a gap.

§ 06Vaults#

The five Moonwell-Morpho vaults held $50.8 million at the January close, all on Base, and gave back a constant-price net $8.2 million over the month, the larger half of Base's outflow. MIP-B56, executed at the end of January, transferred risk curatorship of the Base vaults to Anthias Labs.

§ 07Financials#

January exposed how thin Moonwell's protocol economics are relative to its size. The system generated $428,200 of gross fees, but only $103,200 of that reached the protocol as revenue, a 0.70 percent annualized take rate on $173 million supplied. Most of the value flowed to suppliers and liquidators, not the treasury.

The 0.70 percent take rate and 0.28 percent net interest margin place Moonwell among the thinner-monetizing lending venues: it passes most of what borrowers pay straight through to suppliers. Cumulatively since inception the protocol has generated roughly $3.5 million of gross fees and $439,000 of revenue.

§ 08OEV#

Oracle extractable value recaptured in January totaled $103,700 across 17 events, all on Base through the ETH/USD oracle wrapper. The split between protocol and liquidators is omitted this month pending a correction to how OEV capture was calculated.

§ 09Governance#

Six proposals executed in January. The through-line was retiring the legacy Moonriver deployment and managing vault incentives and curatorship.

Three Moonriver proposals progressively reduced parameters and then deprecated the network, closing Moonwell's original 2021 deployment. The Voters column reads n/a for these because the legacy Moonriver governor records only aggregate WELL vote weight, not per-voter counts; the factor-reduction proposals each passed with roughly 93 million WELL in favor and none against. On the live deployments, MIP-B56 transferred Base vault curatorship to Anthias Labs with 120.3 million WELL in favor and 8.3 million against across 341 voters, the most dissent of the month, though it passed comfortably.

§ 10Cross-deployment and token#

Ranked against the other Base lending venues, Moonwell was the third-largest by core lending supply at the January close, behind Morpho Blue and Aave V3 and ahead of Fluid, Compound V3, Seamless, and Euler. Its $116 million of Base core lending sat an order of magnitude below the two leaders but clearly in the next tier. Moonwell's five Base vaults, a further $51 million, are deposits into Morpho Blue and are already counted in Morpho's total, so they are left out of the ranking to avoid double-counting; Moonwell's combined Base footprint was $167 million.

On the token, WELL closed January at $0.005374, a $24.3 million market cap on 4.53 billion circulating. Roughly 1.04 billion WELL was staked as stkWELL, about 23 percent of circulating supply, the base of voting power behind the governance activity above.

§ 11Looking ahead#

February is the first full month of the three-deployment era after Moonriver's retirement. The single most important number to watch is the $4.3 million of shortfall already on the books: whether it clears, grows, or triggers a wider unwind. Also watch whether the January net outflow continues, whether Base Core supply holds near $116 million, and whether the thin 0.70 percent take rate moves as utilization shifts.