KVORUM
aaveSource: Aave governance v3 · #104

osETH Onboarding

executedMay 12, 2024, 05:29 AM UTCby570x57ab…2922

01Summary

AISummary by Kvorumclaude-haiku-4-5

ARFC proposal to add StakeWise's osETH (over-collateralized staked ETH token) as a borrowable and collateral asset on Aave V3 Ethereum, with supply cap of 10,000 osETH and borrow cap of 1,000 osETH. The token benefits from built-in slashing protection and aims to diversify Ethereum staking.

Type
protocol addition

Key changes

  • Enable osETH as borrowable asset on Aave V3 Ethereum(high)
  • Enable osETH as collateral asset with 72.5% LTV and 75% liquidation threshold(high)
  • Set supply cap at 10,000 osETH and borrow cap at 1,000 osETH(high)
  • Configure interest rate parameters with 0% base rate, 7% variable slope 1, and 300% variable slope 2(medium)
  • Set liquidation bonus at 7.5% and protocol fee at 10%(medium)
  • Enable flashloan functionality for osETH(medium)

Notable concerns

  • Stable borrowing disabled for osETH
  • osETH not borrowable in isolation mode
  • Not set as siloed borrowing
  • Relatively high variable slope 2 rate (300%) for utilization above optimal level
ContractsAaveV3Ethereum
Generated by Kvorum
model: claude-haiku-4-5
provider: anthropic
profile: anthropic-fast-v1
prompt: v1.0
generated: 2mo ago
Read the description ↗

02Description

426 words

Simple Summary

This is a ARFC proposal for adding borrow/lend support for StakeWise’s new over-collateralized staked ETH token, osETH, on AAVE V3 Ethereum.

Motivation

Liquid staking tokens (LSTs) have proven to be popular collateral assets on Aave, with Lido’s stETH the largest Reserve across all Aave deployments and rETH quickly reaching its supply caps. As productive assets, LSTs are high quality collateral to borrow against. Given their high correlation to ETH, LSTs are commonly used as collateral to borrow ETH and engage in yield leveraged staking, with several communities having built products that automate such strategies on top of Aave. The introduction of eMode only made such strategies more popular.

osETH in particular is overcollateralized by design, providing in-built slashing protection and consequently an increased level of protection for the Aave protocol.

As StakeWise V3 provides solo stakers to ability to mint osETH against their own nodes, on-boarding osETH will benefit Aave, StakeWise, and the Ethereum ecosystem as a whole, and be an important step in the pursuit to diversify Ethereum staking and encourage staking from home.

The onboarding of osETH will consequently create increased osETH demand and increased revenues for both Aave and StakeWise protocols, whilst also bolstering the liquidity and peg stability of osETH.

Specification

The table below illustrates the configured risk parameters for osETH

ParameterValue
Isolation ModeFalse
BorrowableENABLED
Collateral Enabledtrue
Supply Cap (osETH)10,000
Borrow Cap (osETH)1,000
Debt CeilingUSD 0
LTV72.5 %
LT75 %
Liquidation Bonus7.5 %
Liquidation Protocol Fee10 %
Reserve Factor15 %
Base Variable Borrow Rate0 %
Variable Slope 17 %
Variable Slope 2300 %
Uoptimal45 %
Stable BorrowingDISABLED
Stable Slope10 %
Stable Slope20 %
Base Stable Rate Offset0 %
Stable Rate Excess Offset0 %
Optimal Stable To Total Debt Ratio0 %
FlashloanableENABLED
Siloed BorrowingDISABLED
Borrowable in IsolationDISABLED
Oracle0x0A2AF898cEc35197e6944D9E0F525C2626393442

References

Copyright

Copyright and related rights waived via CC0.

03Mismatch analysis

AIMismatch analysis by Kvorum

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04Actions

1 total
#0fallback()chain 0x1
Target
0x4f51…83cc
Value
0 wei
Function
fallback()
Arguments
{}
Calldata

05Tally

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