Lending Protocol Moonwell Lowers Collateral Factors, Removes VELO and wrsETH Collateral Eligibility

TechFlow reports that on November 12, according to The Defiant, Moonwell's MIP-X75 risk adjustment has taken effect, lowering collateral factors for certain assets on Base and Optimism and removing collateral eligibility for VELO and wrsETH.

On Base, collateral factors for AERO, WELL, and MORPHO were lowered from 58%, 35%, and 40% to 55%, 20%, and 30%, respectively; on Optimism, VELO and wrsETH were reduced from 50% and 20% to zero, while OP was lowered from 55% to 50%.

Lower collateral factors reduce the collateral support available for existing loans, which may cause positions to meet liquidation conditions even if token prices do not decline. Affected borrowers can repay part of their debt or add other eligible collateral to restore their safety margin.

Source: TechFlow