Moonwell cbBTC market supplier demands remediation as cash reserves dip to $1.72

On November 3, a Moonwell contributor posted a formal governance request demanding a remediation roadmap for the protocol’s Base cbBTC Core market. The request, submitted nearly ten weeks after the August 27 MAMO exploit, highlights that the market now contains only $1.72 in cash that suppliers can withdraw, while roughly $4.56 million remains lent out amid a sea of bad debt.

Background on the MAMO exploit and its fallout

The MAMO exploit on August 27 targeted Moonwell’s Base cbBTC market, draining liquidity and leaving the market with substantial outstanding loans that quickly turned insolvent. According to Unchained, Anthies Labs – Moonwell’s risk provider – classified most of the outstanding loans as bad debt in its weekly updates. The October 9‑15 report listed 54.8 cbBTC of gross bad debt against reserves of 0.1364 cbBTC, and the October 23‑29 update showed a similar figure of 54.87 cbBTC.

Supplier’s governance request

The supplier, who identifies themselves by a forum username and claims to hold about 1.462 cbBTC across three wallets, asked Moonwell contributors and Anthias Labs to outline a remediation plan with a clear timeline. The request notes the absence of any published path for cbBTC suppliers and offers to share wallet addresses privately for verification. It also asks whether the Moonwell Foundation treasury will be tapped, how recoveries will be allocated across markets, and whether cbBTC suppliers will be treated similarly to earlier cbETH remediation efforts.

Current market metrics and prior mitigation attempts

Unchained’s contract read at block 53,474,710 (20:46 UTC, Nov 3) showed a cash balance of 0.0000221 cbBTC – about $1.72 at a price of $77,683 per cbBTC – the only amount suppliers can currently withdraw. The market holds roughly 58.65 cbBTC lent out against 58.48 cbBTC supplied, with only 0.17 cbBTC in reserves. Anthias Labs’ September recommendation described the market as having supplier balances backed by cash and healthy loans at only 22%. Two protocol upgrades, MIP‑X66 and MIP‑X69, were enacted in September and October respectively. MIP‑X66 redirected USDC market reserves but left the cbBTC market untouched, while MIP‑X69 fixed the cbBTC borrow rate at 1% and set a 99% reserve factor, measures that “do not address repaying suppliers,” according to the governance request.

A USDC supplier noted that any liquidity from the MIP‑X66 repayment was consumed within seconds, underscoring the difficulty of delivering meaningful relief to cbBTC lenders.

What to watch next

Moonwell’s September governance report indicated that contributors are working with law‑enforcement and security firm zeroShadow to trace the stolen funds, but no recovery amount has been disclosed. The upcoming weeks will reveal whether the protocol adopts the supplier’s proposal for a pro‑rata claim contract or withdrawal queue, and if additional treasury resources are allocated to the cbBTC market. Stakeholders will also be monitoring any further updates from Anthias Labs regarding reserve adjustments or new remediation mechanisms.