Moonwell's Base cbBTC Market Holds $1.72 in Withdrawable Cash

Formal Request Draws No Replies

A supplier in Moonwell's Base cbBTC Core market lodged a formal governance request on Nov. 3, calling on the protocol's contributor team and its risk provider, Anthias Labs, to publish a remediation plan with a timeline. The move came almost 10 weeks after the Aug. 27 exploit of the MAMO market, in which an attacker inflated the collateral's value and drained assets from the protocol, leaving the cbBTC market holding bad debt. cbBTC is Coinbase's wrapped bitcoin, and the Base market lets holders lend it out for interest; when borrowed positions become unrecoverable, the shortfall falls on suppliers, which is the position the request addresses. The market runs as a smart contract on Base, an Ethereum layer 2 network, and its weekly health updates come from Anthias Labs.

The author, posting under a forum username, states they hold about 1.462 cbBTC across three wallets, a figure that has not been independently verified, and writes that there is “no published remediation path for cbBTC suppliers.” The thread had drawn no replies as of about 20:55 UTC on Nov. 3, leaving the demands formally unanswered. The request asks whether the Moonwell Foundation treasury will be tapped, how any recovered funds would be divided among the affected markets, and whether cbBTC suppliers rank with or behind the earlier cbETH remediation. It also asks for regular accounting of the cbBTC market and proposes that any money sent to the market be split pro rata among current suppliers, through a claim contract or, alternatively, a withdrawal queue. Withdrawable cash is the only value suppliers can pull out immediately; the loan book returns only if borrowers repay or recoveries land. The author offered to share wallet addresses with contributors privately.

58.65 cbBTC Out on Loan

On-chain data shows how little is left to hand back. A read of the market contract on Base at block 53,474,710, taken at 20:46 UTC on Nov. 3, recorded about 0.0000221 cbBTC of cash, roughly $1.72 at the cbBTC price of about $77,683 carried by market data that day. That cash is everything suppliers can withdraw. The same read showed about 58.65 cbBTC, close to $4.56 million, out on loan against about 58.48 cbBTC supplied, with roughly 0.17 cbBTC in reserves.

Anthias Labs counts most of those loans as bad debt. Its update for Oct. 23 to 29 put the market's gross bad debt at 54.87 cbBTC, up from 54.8 cbBTC in the Oct. 9 to 15 update, against reserves of 0.1364 cbBTC. In recommendations dated Sept. 29, the firm put 93.5% of the market's debt in insolvent accounts and said supplier balances are covered by cash and healthy loans to the tune of only about 22%. Reserves, by contrast, stood at a fraction of that figure.

Two governance proposals have reshaped the market since the exploit. MIP-X66, executed in early September, directed roughly $247,000 of protocol-owned reserves to repay debt in the Base USDC Core market, a market the official post-mortem carried at about $2.35 million in residual attacker debt; the cbBTC market received no share of that repayment. A USDC supplier wrote that the liquidity from that repayment “was consumed within seconds.” MIP-X69, effective on Base since Oct. 17, fixed cbBTC's borrow rate at 1% and raised its reserve factor to 99%, so nearly all interest paid on the bad debt accrues to reserves. The reserve factor sets how much of the interest a market banks for itself rather than passing to lenders. The formal request describes both measures as steps that lower interest accrual on the debt while leaving supplier repayment unaddressed.

Claim Contract on the Table

The numbers leave governance with few places to turn. With borrowing throttled to 1% and nearly all interest diverted to reserves, the cbBTC market cannot rebuild withdrawable cash on its own, so repayment has to come from the Moonwell Foundation treasury, from assets recovered in the pursuit of the stolen funds alongside law enforcement and the security firm zeroShadow, or from both; no disclosure so far states a recovered amount. That makes the supplier's pro-rata design, a claim contract or withdrawal queue splitting any incoming funds among current suppliers, the first concrete template on the table. The episode also shows the residual risk in lending markets that price collateral from automated market maker pools: an inflated AMM quote of the kind often engineered with a flash loan was enough to strand 58.65 cbBTC in loans and cut supplier cash to about $1.72.