Moonwell Cuts Collateral Limits, Drops VELO and wrsETH

The significance here is procedural rather than dramatic: a lending protocol is tightening risk parameters through governance, and the immediate burden falls on existing borrowers on Base and Optimism who now have less room before liquidation. Removing VELO and wrsETH as eligible collateral also narrows the asset set the protocol is willing to underwrite, which matters for holders of those tokens who relied on them as borrowing power. The open question is whether other lending venues follow with similar parameter cuts, and how much deleveraging the affected borrowers absorb before liquidation risk recedes.