Moonwell Cuts Collateral Limits, Drops VELO and wrsETH

Moonwell enacted governance proposal MIP-X75, cutting collateral limits on its Base and Optimism deployments and removing VELO and wrsETH as eligible collateral, which reduces backing for existing loans. Borrowers near their limits now face liquidation unless they repay debt or add eligible collateral. The move matters because it tightens risk exposure tied to the two dropped assets across the protocol's lending markets. Traders should watch for liquidation activity and any further parameter changes as borrowers adjust positions.