Moonwell Decentralized finance Surges: Earning yield Increases by More Than 120%, Is WELL Coin Next?

Moonwell Decentralized finance on Ethereum layer-2 Base is experiencing tremendous growth. WELL crypto price surges 12% as locking tokens engagement increases by 120%. Could WELL crypto soar to $0.045?

In DeFi, users prioritize low fees. To foster vibrant activity, transaction costs need to be minimal, stable, and even lower, irrespective of on-chain actions. Since its inception, Base, the Ethereum layer-2, has rapidly expanded in total value locked (TVL).

As per L2Beat, the platform now oversees more than $12.4 billion in assets. Among these, Moonwell, a decentralized money market akin to Aave, is gaining attention for all the right reasons, being identified as one of the top cryptos to invest in.

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WELL Crypto Jumps 12%, Surpassing a Critical Liquidation Threshold

On Sunday, WELL3 (No data), the governance token of the Decentralized finance ecosystem, stood out as one of the leading performers in the protocol and wider Decentralized finance space.

WELL crypto saw a remarkable rise of nearly 12%, concluding the week on a positive note. The climb past $0.028 indicated that the crypto token had broken through last week’s local price ceiling and the latter part of June 2025.

Should buyers preserve their momentum today, the upward trend could persist, pushing WELL prices to $0.035 and eventually back to the May 2025 highs around $0.045.

At present, the candlestick formation on the daily chart favors buyers. Importantly, the closing above $0.028 on July 5 has validated the uptrend momentum initiated on June 23.

At this trajectory, WELL crypto is situated within a optimistic breakout pattern above the bull flag, on its way to becoming the next crypto to take off.

Locking tokens Engagement Skyrockets

The driving force behind this upsurge lies in positive developments.

Following the adoption of the MIP-X21 proposal in Q2 2025, the number of WELL stakers has surged dramatically.

On April 1, staked WELL totaled 782.6 million, but this figure quickly escalated to 922.3 million WELL by May 10.

Although it dipped to 845.4 million WELL by May 31, over 50 million additional WELL were staked in that timeframe.

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On average, staking engagement rose by 120% on Optimism and Base.

This surge was fueled by a significant alteration to Moonwell’s reserve factors. By design, this mechanism directs borrowing interest into reserves. A fraction of the interest accrued from borrowers is allocated to the protocol’s reserve.

Consequences of MIP-X21

Post-MIP-X21, the interest charged in USDC was utilized to acquire more WELL.

Consequently, automated reserve auctions permitted the platform to purchase additional WELL from a segment of interest payments.

The acquired WELL tokens were employed to bolster rewards for its Security Module, which is designed to ensure the protocol’s security.

Last month, 8.4M WELL was obtained through reserve auctions.

Thanks to the successful enactment of MIP-X21, staking rewards on @Base and @Optimism Mainnet have been elevated.

Roughly $114K in surplus crypto market reserves has been set aside for the upcoming round of auctions. pic.twitter.com/GAH6IrxvdC

— Moonwell (@MoonwellDeFi) May 23, 2025

Through the months, MIP-X21 has established a beneficial cycle where increased borrowing activity leads to larger reserves, which in turn fuels more auctions, primarily through Aerodrome.

As a result, more auctions lead to higher rewards for stakers.

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Moonwell Exhibits Capital Efficiency, Captures 99% of Liquidation Value

In addition to its earning yield achievements, Moonwell has discreetly positioned itself as one of the most capital-efficient decentralized money markets on Base and in DeFi, outperforming Aave.

The protocol retains 99% of liquidation value, ensuring minimal wrecked during liquidations.

This enhancement was initiated in February 2025 when Moonwell introduced a MEV tax on liquidators.

Utilizing OP Stack’s transaction ordering assurances, the platform was able to capture a portion of the value created during liquidations instead of allowing it to be diverted to external searchers.

(7/10) Moonwell’s smart contracts are now able to impose a MEV tax on liquidators, ensuring that the platform gains from competitive dynamics, rather than only external searchers.

This marks the first successful on-chain OEV (Oracle Extracted Value) auction on OP Live network and it is just… https://t.co/54u20C1m2H

— optimism.eth (@Optimism) February 3, 2025

This efficiency marked the inaugural successful on-chain OEV auction on the ETH layer-2 OP Mainnet, eclipsing conventional MEV systems dependent on off-chain relays.

By seizing nearly all of a borrower’s liquidation value, Moonwell’s earnings have increased, bolstering its business model.

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