Lending protocol Moonwell lowers collateral factors, removes VELO and wrsETH collateral eligibility.

Moonwell's MIP-X75 risk adjustment took effect, cutting collateral factors on several assets across Base and Optimism and stripping VELO and wrsETH of collateral eligibility entirely. On Base, collateral factors for AERO, WELL and MORPHO were reduced to 55%, 20% and 30% from 58%, 35% and 40%, while on Optimism VELO and wrsETH fell from 50% and 20% to zero and OP dropped to 50% from 55%. The change matters because lower collateral factors shrink the borrowing capacity backed by existing positions, potentially pushing loans toward liquidation even without a price decline. Affected borrowers can restore their safety margin by repaying part of their debt or adding other eligible collateral.