Moonwell DeFi on Ethereum Layer-2 Base Skyrockets: WELL Token Jumps 12% Amid 120% Staking Surge
By Dalmas Ngetich | July 7, 2025
Moonwell, a decentralized finance (DeFi) protocol operating on Ethereum’s layer-2 scaling solution Base, has experienced a remarkable growth phase. The platform’s native governance token, WELL, surged by nearly 12% on July 5, 2025, as staking activity exploded by over 120%. This upward momentum is drawing significant attention across the DeFi and crypto investment communities, sparking discussions on whether WELL could rally to new highs around $0.045. —
WELL Token Breaks Key Resistance Level
WELL’s price rallied throughout the week, breaking above the critical resistance threshold of $0.028—a key level it last flirted with in June. The bullish candlestick pattern emerging on the daily chart signals strong buying interest, confirming momentum that began toward the end of June.
Technical analysts observing these trends forecast that if buying pressure continues, WELL could soon revisit its May highs around $0.045. This breakout positions WELL as one of the more promising altcoins on Ethereum’s hotly-traded Base layer-2 network.
Massive Surge in Staking Activity
Underlying WELL’s price ascent is a sharp increase in community engagement, particularly in staking. Following the implementation of the governance proposal MIP-X21 during the second quarter of 2025, the number of WELL tokens staked grew dramatically.
Data shows:
- On April 1, total WELL staked was at 782.6 million.
- By May 10, this jumped to 922.3 million WELL.
- Although it slightly retracted to 845.4 million by the end of May, more than 50 million additional tokens were locked during that period.
Staking activity on both Base and the Optimism layer-2 networks reportedly surged by about 120%. This spike is attributed to a key update introduced by MIP-X21, which altered how Moonwell channels borrowing interest into reserves.
How MIP-X21 Fuelled the Growth
MIP-X21 revamped Moonwell’s reserve management by converting interest payments—charged primarily in USDC—into purchases of WELL tokens via automated reserve auctions. These WELL tokens then fund enhanced rewards for the protocol’s Safety Module, the mechanism designed to secure Moonwell.
Notably, since implementing MIP-X21:
- The protocol acquired 8.4 million WELL tokens through reserve auctions in a single month.
- Approximately $114,000 in excess market reserves have been earmarked for upcoming auctions.
- The virtuous cycle created by MIP-X21 means increased borrowing leads to higher reserves, which fuels more auctions and generates greater staking rewards.
Moonwell’s official Twitter confirmed these developments with updates on increased rewards across Base and Optimism Mainnet.
Moonwell’s Capital Efficiency Sets It Apart
Beyond staking gains, Moonwell has solidified its reputation for capital efficiency. The protocol reportedly captures 99% of liquidation value, dramatically reducing value leakage compared to traditional money markets. This was enhanced in February 2025 when Moonwell introduced a Miner Extractable Value (MEV) tax on liquidators.
Leveraging the OP Stack’s transaction ordering guarantees, Moonwell became the first to conduct a successful on-chain Oracle Extracted Value (OEV) auction on Ethereum’s Optimism Mainnet. This innovation allows the protocol to siphon off liquidation profits that would otherwise go to external liquidators, boosting Moonwell’s revenue and sustainability.
What’s Next for WELL?
Moonwell’s impressive integration of operational efficiencies and user incentives has positioned it as a standout DeFi project on Ethereum’s Base layer-2. With staking interest surging and governance tokens gaining 12% in recent days, investor optimism is mounting.
If positive price momentum and staking engagement continue, WELL could very well be poised for higher targets around $0.035 in the near term, with $0.045 in sight as a potential breakout above prior highs.
Key Crypto Market Snapshot (July 7, 2025)
- Bitcoin (BTC): $108,497 (-0.32%)
- Ethereum (ETH): $2,551.93 (-0.31%)
- Solana (SOL): $150.05 (-0.55%)
- Binance Coin (BNB): $662.37 (+0.19%)
Disclaimer
Cryptocurrency investments carry high risks, including the potential loss of capital. This article is for informational purposes only and should not be taken as investment advice. Always do your own research or consult a financial advisor before making investment decisions.
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About the Author:
Dalmas Ngetich is an experienced crypto journalist with over a decade covering blockchain, technology, and digital assets. His work has been featured in Forbes, Investing.com, Entrepreneur, and other leading platforms.