Thanks everyone for their input and thoughts! Based on the feedback that was given, it appears more appropriate to put a more conservative approach to Reserve Factor activiation, represented by the conservative column that Chaos provided. As such, I’ve reposted and modified the proposal below:
Proposal Summary:
E-mode
- Turn on e-mode for ETH-correlated assets (i.e. ETH/WETH, cbETH and wstETH)
- Potentially (based on community demand) turn on e-mode for stablecoins (USDC and DAI)
Reserve Factor
- Enable reserve factor for all currently public and active lend/borrow markets on Seamless
Background/Context:
The Seamless protocol and its community have grown and matured, strengthening in areas such as risk analysis and liquidation processes. As a result, it seems plausible that Seamless could enable efficiency mode (e-mode), enhancing user lending and borrowing efficiency with some minor additional operational complexities. Moreover, considering the prevailing reward rate environment in Base DeFi, enabling the Reserve Factor for the DAO appears advisable.
Proposal Details:
Enabling E-mode
- Turn on ETH-correlated e-mode, following industry best practices/standards and risk analysis suggestions.
2… Turn on Stablcoin e-mode for USDC and DAI only, once again following industry best practices/standards and risk analysis suggestions.
Turn on Reserve Factor
Turn on reserve factor for all markets, following other Base-market standards to ensure the protocol remains competitive with others. Here are some initial suggestions:
| Asset | Reserve Factor |
|---|---|
| USDC | 5% |
| USDbC | 15% |
| ETH | 10% |
| cbETH | 10% |
| DAI | 10% |
| wstETH | 10% |
| AERO | 20% |
Next Steps:
Since the five day dicsussion period has ended, will enact the 2-day cooldown period before this would be moved to an on-chain vote.
Note: this was edited to reflect that e-mode will be turned on for stablecoins as well and to include the AERO reserve factor recommendation given by Chaos found [here].([PCP-12] Support AERO on Seamless - #12 by Guz_MassAdopt) This recommendation has been approved via discussion and onchain Tally Vote