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For affected borrowers, the remedy is to repay enough debt or add other eligible collateral to restore a cushion above the liquidation threshold. Moonwell warned $VELO-backed borrowers on Nov. 4 to take those steps before execution. Its borrowing documentation explains that liquidators can sell pledged assets to repay undercollateralized loans.
The Base changes primarily concern existing positions: Anthias Labs, which recommended the adjustments, said in its Oct. 27 analysis that borrowing on Base was already closed. The factors still determine how much debt collateral can support and how much other collateral a borrower can withdraw.
$VELO Feed Retirement Drives Removal
Anthias linked $VELO’s removal to Chainlink’s planned retirement of the VELODROME/USD price feed on Nov. 11. In its Nov. 3 recommendation, the risk firm said continued reliance on the feed after updates stopped would leave Moonwell valuing $VELO at a frozen price.
MIP-X75 also sets fixed oracle prices of $0.02599706 for $VELO on Optimism and $0.01 for MAMO on Base. The proposal says these prices affect borrowers of those tokens, rather than providing collateral backing: both have zero collateral factors under the package.
Anthias estimated that removing $VELO’s borrowing power would make 64 accounts holding about $1,288 of debt newly eligible for liquidation, using a Nov. 3 snapshot. Its Oct. 27 analysis estimated that the combined Base cuts would cross the liquidation threshold for eight accounts holding about $2,497 of debt. These are pre-execution estimates, not a count of liquidations that have occurred.
The same October analysis described wrsETH’s zero factor as the final step in its deprecation on Optimism. Anthias estimated that change alone would make two positions holding about $779 of debt newly liquidatable, and said both could avoid liquidation by exiting during the notice period.