The Safety Module is a smart contract that protects Moonwell against unexpected losses. When you stake tokens in it, you help secure the protocol and earn rewards in return. It's the backbone of the protocol's risk protection.
How the Safety Module Works
When you stake WELL, you receive stkWELL in return on a 1-to-1 basis. These tokens serve as proof of your staked position and can be used in governance decisions.
You can also earn additional WELL rewards just for staking. In exchange, your staked tokens act as a backstop: in a worst-case event, part of them (up to 30%) can be used to cover a shortfall. That trade-off is what makes the rewards possible.
What Is a Shortfall Event?
A Shortfall Event is an unexpected incident that causes a loss of capital. It could happen due to:
Smart contract exploits
Liquidation failures
Oracle failures
How Moonwell Prevents Shortfall Events
Moonwell takes several steps to prevent these events:
Smart contract audits before deployment
An Asset List Framework to ensure collateral quality
Chainlink price oracles for accurate price data
What Happens During a Shortfall Event
If a Shortfall Event occurs, the Safety Module activates to cover the deficit. Up to 30% of your staked assets may be sold to compensate affected users. This is the trade-off for earning staking rewards, so it's worth understanding before you stake.
Unstaking Timeline
Before you can unstake your tokens, a mandatory cooldown period applies.
Cooldown period: 7 days
After cooldown ends: a 2-day window to complete your withdrawal
If you miss the 2-day window: you must activate another 7-day cooldown
During the cooldown period, you continue to earn staking rewards on your staked tokens.
Supported Networks
You can stake WELL on Ethereum Mainnet, Base, OP Mainnet, and Moonbeam.
Important Note for Base Users
Only native WELL is eligible for staking on Base. If you hold Wormhole-wrapped WELL, you must migrate it to native WELL first. (See Migrating Wormhole WELL to Native WELL.)
Frequently Asked Questions
What do I get for staking?
stkWELL represents your position, plus ongoing WELL rewards, and voting power in governance.
What's the risk?
In a Shortfall Event, up to 30% of your staked assets may be used to cover losses. This is the trade-off for the rewards you earn.
How long does it take to unstake?
A 7-day cooldown, then a 2-day window to withdraw. You keep earning rewards during the cooldown.
Can I stake any WELL?
On Base, only native WELL. Migrate Wormhole WELL first if you hold this token.