Thank you for the in-depth analysis @chaoslabs !
As the original poster, here’s the summary of what the proposal is. Seeing that the temp check seems to be positive on this thread, I will move it to snapshot soon for voting.
A summary of what was discussed above:
Background:
Lido Finance is a family of open-source peer-to-system software tools deployed functioning on Ethereum and Polygon. It is mainly known for enabling users to stake their tokens with validators to receive rewards from validation activities on the blockchain while being able to use the token on-chain in various capacity including as collateral on money markets.
In November 2023, Lido DAO has officially accepted ownership of the wstETH bridging components on Base, bringing wstETH over to Base. 2.5k wstETH has been bridged over to Base thus far.
Proposal:
Seamless is the lending market that has seen the fastest growth in terms of TVL on Base. wstETH is an asset that lends itself well to lending markets. I am proposing to get wstETH as a collateral asset on Seamless. Having wstETH as a collateral asset on Seamless will doors for strategies like leveraged staking and enable users on Seamless to be more efficient with their capital.
As recommended by Chaos Labs, here are the parameters that should be set for listing wstETH as a collateral.
| Parameter | Value |
|---|---|
| Isolation Mode | No |
| Borrowable | Yes |
| Collateral Enabled | Yes |
| Supply Cap (wstETH) | 400 |
| Borrow Cap (wstETH) | 40 |
| LTV | 65.00% |
| LT | 72.00% |
| Liquidation Bonus | 7.50% |
| Liquidation Protocol Fee | 10.00% |
| Reserve Factor | 15.00% |
| Variable Base | 0.0% |
| Variable Slope1 | 7.00% |
| Variable Slope2 | 300.00% |
| Uoptimal | 45.00% |
| Flashloanable | Yes |
| Siloed Borrowing | No |
| Borrowed in Isolation | No |
These parameters set should ensure that wstETH can be used safely as a collateral on Seamless Protocol.
Next steps:
We will soon kick off the off-chain snapshots lab process. The link to the snapshot vote will be shared in this thread as a reply when it’s up