Key Highlights
- Moonwell plans $310K immediate payouts plus future revenue to fairly cover $2.68M losses from the cbETH Base incident.
- MFAM holders will convert tokens to stkWELL at 1:1.5, joining Moonwell’s main DAO and simplifying governance for long-term growth.
- Community feedback highlights ETH compensation concerns, while transparency and corrected cbETH values aim to ensure fairness for borrowers.
DeFi lending platform Moonwell has shared a plan to help users hit by the cbETH Core Market incident on Base. Between February 14 and 18, 2026, about 181 borrowers were unfairly liquidated, even though market conditions or their own actions weren’t to blame.
The $2.68 million loss happened because of protocol behavior tied to MIP-X43. To fix this, Moonwell has proposed a plan that uses an immediate payout from its Apollo Treasury along with ongoing payments from future protocol revenue to make affected users whole and rebuild trust.
The plan also looks ahead by bringing the Moonwell Apollo (MFAM) community into the main Moonwell DAO, governed by WELL. “A full onchain review of all liquidation activity during that window has been completed,” explained community member and governance delegate Fechuky_25.
Putting all the data together, the affected borrowers lost about $2.68 million, and this plan aims to cover those losses while simplifying governance and closing out older infrastructure.
Immediate and ongoing compensation
Moonwell plans to use about $310,000 from the Apollo Treasury for immediate payouts. The money will be shared fairly among borrowers based on the actual losses they faced during the incident. On top of that, the protocol will use future revenue, like net fees and OEV revenue, to pay off the remaining amounts. This approach balances quick relief with long-term stability for the protocol.
MFAM holders will also convert their tokens into stkWELL at a 1:1.5 ratio, giving them a stake in Moonwell’s ongoing Base projects. Users will have 12 months to claim their rewards through Sablier, after which any unclaimed tokens will expire. This move not only unifies governance but also makes it easier for the Apollo community to fully join Moonwell’s main ecosystem.
Community reactions and debate
Feedback from the forum regarding the valuation approach was raised. Stevex commented, “If ETH in the incoming months pumps to $4,000, essentially this plan would mean that affected borrowers sell their ETH at ATL.” He proposed that borrowers be compensated in the same amount of ETH that was lost, rather than the value of the loss at the time of the incident.
Elwood6095 also asked for confirmation on whether the repayments are in the amount of cbETH seized or their value in USD, posing a possible danger to the remaining active loans.
Nevertheless, community member Luke appreciated the proposal: “Thank you for this proposal. I do believe it’s important to repay the cbETH suppliers that were liquidated for their losses.”
The plan also keeps things transparent by revaluing cbETH at $2,200 to fix earlier price errors. Each borrower’s loss is calculated by subtracting the debt they already repaid from the collateral taken, so no one gets more than they actually lost. Beyond covering cbETH losses, this approach also clears up leftover issues from Moonriver and wraps up the old Apollo DAO governance neatly.
Moonwell’s plan shows how important it is to manage risks carefully and involve the community in decisions. It doesn’t just fix the financial losses, it also brings the governance setup together, making sure everyone’s interests are aligned for the protocol’s future growth.
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