Stake WELL and MFAM tokens to receive increased rewards while also securing the Moonwell Apollo protocol via the Safety Module.
Moonwell’s primary mechanism for securing the protocol is the Safety Module – a smart contract that allows users to stake their assets in order to protect and mitigate against "Shortfall Events".
A Shortfall Event occurs when there is a deficit in the markets of the Moonwell ecosystem. When this happens, the Safety Module is used to cover the losses by selling the assets needed to mitigate the deficit.
Contributing to the Safety Module allows users to obtain additional incentives in return for a tokenized position which can be freely used in the protocol (for example: Governance). However, the original asset will always be at some form of risk if a Shortfall Event does occur.
While WELL or MFAM are staked in the safety module, you will accrue rewards in the form of additional WELL/MFAM tokens.
You will continue to accrue WELL and MFAM rewards during a cooldown period.
These rewards can be claimed at any time.
- 1.To unstake WELL/MFAM tokens, the cooldown period needs to be activated first.
- 2.Once the cooldown period has been activated, you will have to wait 10 days until you can unstake your WELL or MFAM.
- 3.Once the cooldown period of 10 days is complete, you will have a 2-day window to unstake your tokens.
A Shortfall Event is an incident that causes an unexpected loss of capital. Despite Moonwell’s emphasis on solid security measures and software development practices, there remains a non zero risk of an event or exploit that causes funds to be lost. The Safety Module serves as a last line of defense to help mitigate the damage from these types of occurences.
Smart contract exploit: A smart contract bug or hack that causes capital loss. As a first line of defense, all Moonwell smart contracts go through multiple rigorous audits by Halborn Security. Additionally, Moonwell has engaged in an ongoing and continuous service agreement with Halborn Security.
Liquidation failure: An asset being used as collateral fails due to low liquidity or liquidators failing to perform liquidations efficiently. To combat this potentiality, Moonwell only allows for an asset to be collateralized once there is sufficient liquidity across the parachain to liquidate even the largest of borrowers. Markets undergo scrutiny and assessment both for contract security of the asset, as well as economic assessment. Typically, a market will require TVL in the amount capable of liquidating the largest position held on the protocol. Oracle failure: The oracle network fails to properly update prices during extreme market conditions or network congestion, causing improper liquidations due to inaccurate price data. To secure the protocol against this threat, Moonwell uses Chainlink — the most secure and decentralized oracle network on the market.
There are precautionary measures taken to harden the Moonwell protocol against risks, particularly with potential shortfall events. Despite these efforts, if a Shortfall Event did occur, up to 30% of the assets staked in the Safety Module would be sold to cover the ensuing deficit. Although Shortfall Events are far from daily occurrences, it is still crucial to understand and weigh the potential risks before staking.
STAKE WELLbutton located at the top right corner of either the Moonwell Apollo (MFAM) or Artemis (WELL) dapps to open Safety Module window.
Enter the amount you would like to stake and click "Approve and Stake".
Confirm and sign the transaction in Metamask to grant permission to the Moonwell Safety Module smart contract to access your funds. Transaction history can be viewed in the transaction log.
Click "Stake (x amount) WELL/MFAM" to initiate staking
Confirm the transaction in Metamask. Transaction history can be viewed in the transaction log.
You have successfully staked WELL or MFAM into the Moonwell Safety Module!
After staking MFAM tokens, you will receive an equivalent amount of stkMFAM tokens. The stkMFAM tokens are a 1:1 representation of your staked MFAM, like a receipt. Please note that staked WELL/MFAM tokens will be temporarily locked until you initiate the cooldown period.
Set a Google Calendar alert to remind you when your cooldown period has concluded!
To unstake tokens from the Safety Module, the cooldown period must first be activated.
Once the cooldown period is activated, you will have to wait 10 days until you can unstake your WELL or MFAM.
Once the cooldown period of 10 days is completed, you will have a 2-day window to unstake your tokens.
If the tokens are not unstaked within the 2-day window, you will need to activate the cooldown period again!