TL;DR - Seamless core contributors propose the introduction of a custom WETH market to be used for new ILM strategies.
Background/Context:
Aligning with Seamless Protocol’s vision and mission to deliver a seamless DeFi experience, there has been a sharpened focus on developing more Integrated Liquidity Markets (ILMs). Following the successful rollout of the custom wstETH market and the launch of the inaugural ILM strategy which uses a wstETH/ETH loop to amplify wstETH staking rewards, core contributors are now proposing the introduction of an isolated ETH market. This market will facilitate the creation of new strategies utilizing ETH as a collateral asset.
The aim of introducing this market is to ensure that ETH collateralized in ILM strategies cannot be borrowed further. This setup ensures that strategies consistently maintain available collateral for withdrawals and debt repayment, thereby safeguarding against potential liquidation risks during rebalancing.
Here are the proposed specifications for the gated ETH market:
- Supply cap: 4000
- LTV: 80%
- LT: 83%
- Liquidation Bonus: 15%
- Isolation Mode: no
- Borrowable: no
- Flashloanable: no
- Collateral Enabled: yes
Resources/References:
ILM Github - GitHub - seamless-protocol/ilm: integrated liquidity market
ILM specs - ilm/SPECS.md at main · seamless-protocol/ilm · GitHub
How the permissioned ETH would work - ilm/src/tokens/WrappedERC20PermissionedDeposit.sol at main · seamless-protocol/ilm · GitHub
Next Steps:
Based on the latest community governance standards which has been ratified by the community (ref). Let’s discuss this proposal and if there is enough support here, move this directly to an onchain vote.
