For years I have been looking for ways to wet shredded newspaper and keep them fluffy. Matted or clumped wet shredded newspaper doesn't provide as much O2 for the worms.

I have picked up used saw dust pellets from a pet store near by. It was used as bedding in their small animals cages. Take for example 3 scoops of pellets and wet them until they break down and stop to absorb water and you can see some water started pooling at the bottom of the bucket, then add 3 scoops (or more) shredded newspaper and start mixing them in the bucket.

It has been working real well so far and stuff stays fluffy in the bin. Didn't cost a cent.