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‎proposals/mips/mip-b53/b53.md‎

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## MIP-B53: WETH Market Ownership Wrapper
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### **Summary**
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This proposal deploys and migrates the WETH market admin to a new owner wrapper
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contract that can reliably receive native ETH. This solves a critical issue
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preventing the protocol from reducing WETH market reserves due to execution
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context limitations when TEMPORAL_GOVERNOR receives ETH during proposal
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execution.
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### **Background**
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The WETH market on Base uses an unwrapper contract that converts WETH to native
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ETH when reducing reserves. While TEMPORAL_GOVERNOR has a receive() function,
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there have been persistent issues when receiving ETH during proposal execution,
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causing reserve reduction operations to fail.
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This issue was previously identified in MIP-X37, which attempted to reduce 347
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WETH in reserves but had to be reverted due to these ETH receiving problems. The
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WETH reserves were also removed from MIP-B52 for the same reason.
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### **Proposal**
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This proposal implements a solution by deploying an MWethOwnerWrapper contract
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that:
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1. **Acts as the new admin for the WETH market** - The wrapper becomes the
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admin, replacing TEMPORAL_GOVERNOR as the direct admin.
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2. **Automatically wraps received ETH to WETH** - When the wrapper receives
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native ETH (from reserve reductions), it automatically wraps it to WETH,
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avoiding any receive() execution context issues.
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3. **Delegates all admin functions** - The wrapper forwards all admin function
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calls to the underlying WETH market, including:
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- `_reduceReserves(uint256)` - Reduce reserves
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- `_setPendingAdmin(address)` - Admin transfers
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- `_setReserveFactor(uint256)` - Economic parameters
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- `_setInterestRateModel(address)` - Rate model updates
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- `_setProtocolSeizeShare(uint256)` - Protocol parameters
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- `_addReserves(uint256)` - Reserve additions
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4. **Remains controlled by TEMPORAL_GOVERNOR** - The wrapper itself is owned by
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TEMPORAL_GOVERNOR, maintaining governance control.
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5. **Enables token extraction** - The wrapper includes a `withdrawToken()`
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function to extract WETH after reserve reductions, allowing the protocol to
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use the funds.
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### **Technical Implementation**
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The proposal executes the following actions:
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1. Deploy MWethOwnerWrapper implementation contract
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2. Deploy TransparentUpgradeableProxy for the wrapper
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3. Initialize the wrapper with:
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- MOONWELL_WETH as the target mToken
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- WETH token address
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- TEMPORAL_GOVERNOR as the owner
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4. Call `MOONWELL_WETH._setPendingAdmin(wrapperProxy)` to set the wrapper as
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pending admin
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5. Call `wrapperProxy._acceptAdmin()` to complete the admin transfer
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### **Rationale**
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This approach provides several benefits:
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1. **Reliability** - The automatic ETH-to-WETH wrapping in the receive()
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function ensures no execution context issues when receiving funds from the
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unwrapper.
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2. **Governance Control** - TEMPORAL_GOVERNOR remains in control by owning the
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wrapper, maintaining the existing governance security model.
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3. **Flexibility** - The wrapper delegates all admin functions, so future
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parameter updates and reserve management can be performed normally.
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4. **Upgradeability** - The wrapper uses the TransparentUpgradeableProxy
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pattern, allowing future upgrades if needed (controlled by MRD_PROXY_ADMIN).
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5. **Enables Future Reserve Reductions** - Once deployed, the protocol can
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successfully reduce WETH reserves and use them for bad debt remediation or
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other purposes.
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### **Next Steps**
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After this proposal passes, a follow-up proposal can be created to:
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- Reduce WETH reserves (previously attempted in MIP-X37)
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- Call `wrapperProxy.withdrawToken()` to extract the WETH
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- Use the WETH for bad debt repayment or other protocol needs
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### **Voting Options**
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- **Yes** — Deploy the MWethOwnerWrapper and migrate WETH market admin to enable
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reserve reductions.
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- **No** — Reject the wrapper deployment; WETH reserves remain inaccessible.
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- **Abstain** — No preference.

‎proposals/mips/mip-b53/mip-b53.sol‎

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// SPDX-License-Identifier: GPL-3.0-or-later
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pragma solidity 0.8.19;
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import "@forge-std/Test.sol";
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import {TransparentUpgradeableProxy} from "@openzeppelin/contracts/proxy/transparent/TransparentUpgradeableProxy.sol";
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import {MTokenInterface} from "@protocol/MTokenInterfaces.sol";
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import {MWethOwnerWrapper} from "@protocol/MWethOwnerWrapper.sol";
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import {HybridProposal, ActionType} from "@proposals/proposalTypes/HybridProposal.sol";
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import {AllChainAddresses as Addresses} from "@proposals/Addresses.sol";
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import {BASE_FORK_ID} from "@utils/ChainIds.sol";
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import {ProposalActions} from "@proposals/utils/ProposalActions.sol";
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import {DeployMWethOwnerWrapper} from "@script/DeployMWethOwnerWrapper.s.sol";
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/// @title MIP-B53: WETH Market Ownership Wrapper
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/// @notice Proposal to deploy and migrate WETH market admin to a wrapper contract
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/// that can reliably receive native ETH, enabling reserve reductions.
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/// @dev This proposal:
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/// 1. Deploys MWethOwnerWrapper implementation and proxy
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/// 2. Transfers WETH market admin from TEMPORAL_GOVERNOR to the wrapper
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/// 3. Wrapper is owned by TEMPORAL_GOVERNOR, maintaining governance control
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/// 4. Enables future WETH reserve reductions via the wrapper
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contract mipb53 is HybridProposal {
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using ProposalActions for *;
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string public constant override name = "MIP-B53";
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constructor() {
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bytes memory proposalDescription = abi.encodePacked(
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vm.readFile("./proposals/mips/mip-b53/b53.md")
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);
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_setProposalDescription(proposalDescription);
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}
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function primaryForkId() public pure override returns (uint256) {
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return BASE_FORK_ID;
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}
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function deploy(Addresses addresses, address) public override {
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vm.selectFork(BASE_FORK_ID);
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// Deploy the MWethOwnerWrapper implementation and proxy
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DeployMWethOwnerWrapper deployer = new DeployMWethOwnerWrapper();
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(TransparentUpgradeableProxy proxy, ) = deployer.deploy(addresses);
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console.log("MWethOwnerWrapper deployed at:", address(proxy));
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}
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function build(Addresses addresses) public override {
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vm.selectFork(BASE_FORK_ID);
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address wrapperProxy = addresses.getAddress("MWETH_OWNER_WRAPPER");
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address moonwellWeth = addresses.getAddress("MOONWELL_WETH");
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// Step 1: Set the wrapper as pending admin of the WETH market
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_pushAction(
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moonwellWeth,
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abi.encodeWithSignature(
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"_setPendingAdmin(address)",
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payable(wrapperProxy)
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),
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"Set MWethOwnerWrapper as pending admin of MOONWELL_WETH",
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ActionType.Base
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);
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// Step 2: Accept admin role from the wrapper
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_pushAction(
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wrapperProxy,
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abi.encodeWithSignature("_acceptAdmin()"),
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"MWethOwnerWrapper accepts admin role for MOONWELL_WETH",
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ActionType.Base
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);
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}
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function validate(Addresses addresses, address) public override {
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vm.selectFork(BASE_FORK_ID);
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address wrapperProxy = addresses.getAddress("MWETH_OWNER_WRAPPER");
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address moonwellWeth = addresses.getAddress("MOONWELL_WETH");
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address temporalGovernor = addresses.getAddress("TEMPORAL_GOVERNOR");
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address weth = addresses.getAddress("WETH");
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// Validate wrapper configuration
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MWethOwnerWrapper wrapper = MWethOwnerWrapper(payable(wrapperProxy));
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assertEq(
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wrapper.owner(),
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temporalGovernor,
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"Wrapper owner should be TEMPORAL_GOVERNOR"
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);
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assertEq(
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address(wrapper.mToken()),
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moonwellWeth,
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"Wrapper mToken should be MOONWELL_WETH"
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);
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assertEq(
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address(wrapper.weth()),
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weth,
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"Wrapper WETH address should be correct"
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);
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// Validate admin transfer
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MTokenInterface mToken = MTokenInterface(moonwellWeth);
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assertEq(
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mToken.admin(),
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wrapperProxy,
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"MOONWELL_WETH admin should be the wrapper"
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);
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assertEq(
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mToken.pendingAdmin(),
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address(0),
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"MOONWELL_WETH pendingAdmin should be zero after accepting"
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);
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console.log("✓ MWethOwnerWrapper successfully deployed and configured");
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console.log("✓ MOONWELL_WETH admin transferred to wrapper");
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console.log("✓ Wrapper owned by TEMPORAL_GOVERNOR");
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console.log("✓ Future WETH reserve reductions now enabled");
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}
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}

‎proposals/mips/mips.json‎

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[
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{
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"envpath": "",
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"governor": "MultichainGovernor",
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"id": 0,
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"path": "mip-b53.sol/mipb53.json",
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"proposalType": "HybridProposal"
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},
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{
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"envpath": "",
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"governor": "MultichainGovernor",

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