Moonwell lowers the collateral cap through MIP-X75, removing VELO and wrsETH

The decentralized lending protocol Moonwell, through governance proposal MIP-X75, has reduced the collateral requirements for existing loans and removed VELO and wrsETH from the list of collateralizable assets. This adjustment involves the lending markets deployed on Base and Optimism.

After the proposal takes effect, the reduction in collateral limits will compress the borrowing capacity of existing borrowers. Users close to the borrowing limit who do not reduce their debt or supplement with eligible collateral will face liquidation.