Onboard wrsETH to Aave v3 Plasma Instance
01Summary
Proposal to add wstETH (Lido's wrapped stETH) and wrsETH (Kelp DAO's liquid staking token) as collateral to Aave v3 on the Plasma network. wstETH will be fully borrowable with 78.5% LTV, while wrsETH will be collateral-only with minimal borrowing capacity (0.05% LTV) and higher risk parameters due to being a newer asset.
- Type
- protocol addition
Key changes
- Add wstETH as collateral and borrowable asset to Aave v3 Plasma with LTV of 78.5%, supply cap of 20,000 wstETH, and borrow cap of 5,000 wstETH(high)
- Add wrsETH as collateral-only asset to Aave v3 Plasma with minimal LTV of 0.05%, supply cap of 20,000 wrsETH, and borrow cap of 1 wrsETH(high)
- Configure wstETH/WETH E-Mode with 94% max LTV and 96% liquidation threshold(medium)
- Configure wrsETH/WETH E-Mode with 93% max LTV and 95% liquidation threshold(medium)
- Set emission admin for wstETH, wrsETH and corresponding aTokens(low)
Notable concerns
- wrsETH has extremely low LTV (0.05%) and high liquidation risk parameters, suggesting significant uncertainty about the asset despite prior approvals on other networks
- wrsETH borrow cap is restricted to just 1 token, indicating very conservative risk posture
- wrsETH has higher reserve factor (45%) and steeper variable slope 2 (300%) compared to wstETH, reflecting greater perceived risk
Generated by Kvorum
02Description
Simple Summary
This publication proposes adding wstETH and wrsETH as collateral to the Aave v3 instance on the Plasma network using the Direct-to-AIP process.
Motivation
wrsETH
rsETH is a liquid staking token issued by Kelp DAO, offering users access to rewards from ETH staking while maintaining liquidity and DeFi composability.
Following the strong adoption of wrsETH on Linea, where it is the largest LRT, this publication proposes onboarding wrsETH to Plasma. wrsETH has established a reliable track record across Aave markets, with users deposits of ~$1B on Core, ~$370M on Linea and smaller balances on other networks.
Given that:
- rsETH has already passed governance and risk assessments for Ethereum, Arbitrum, and Base;
- Plasma is a supported Aave V3 deployment with growing activity and integration potential; and,
- A precedent has been set for using the Direct-to-AIP path when onboarding previously approved assets to new instances.
By bringing wrsETH to Plasma, users will benefit from an additional network where they can utilize the asset under consistent risk parameters.
wstETH
wstETH (wrapped stETH) is issued by Lido Finance and represents a non-rebasing version of stETH. By eliminating rebasing mechanics, wstETH is straightforward to use across lending markets, DEXes, and structured DeFi applications.
Its longstanding presence in Aave makes it a fundamental collateral asset for borrowers and a reliable source of liquidity. Introducing wstETH to Plasma serves several objectives:
- Broadening the collateral set for users on Plasma;
- Strengthening network adoption by adding a blue-chip staking derivative;
- Aligning Plasma with other Aave V3 deployments where wstETH is already active under well-defined parameters; and,
- Offering access to cheap stablecoin debt to Lido users.
Specification
The table below illustrates the configured risk parameters
| Parameter | wstETH | wrsETH |
|---|---|---|
| Isolation Mode | false | false |
| Borrowable | ENABLED | DISABLED |
| Collateral Enabled | true | true |
| Supply Cap (wstETH) | 20,000 | 20,000 |
| Borrow Cap (wstETH) | 5,000 | 1 |
| Debt Ceiling | USD 0 | USD 0 |
| LTV | 78.5 % | 0.05 % |
| LT | 81 % | 0.1 % |
| Liquidation Bonus | 6 % | 7 % |
| Liquidation Protocol Fee | 10 % | 10 % |
| Reserve Factor | 35 % | 45 % |
| Base Variable Borrow Rate | 0 % | 0 % |
| Variable Slope 1 | 0.55 % | 10 % |
| Variable Slope 2 | 40 % | 300 % |
| Uoptimal | 90 % | 45 % |
| Flashloanable | ENABLED | ENABLED |
| Siloed Borrowing | DISABLED | DISABLED |
| Borrowable in Isolation | DISABLED | DISABLED |
Pricefeed details
| Parameter | wstETH | wrsETH |
|---|---|---|
| Oracle | Capped stETH / stETH (ETH) / USD | Capped rsETH / ETH / USD |
| BASE/USD Oracle | Chainlink ETH/USD | Chainlink ETH/USD |
| Ratio Provider | WSTETH-STETH Exchange Rate | WRSETH-ETH Exchange Rate |
| Oracle Latest Answer | (2025-10-15) USD 5016.55868936 | (2025-09-30) USD 4388.18307326 |
| min snapshot | 7 days | 14 days |
| max yearly growth | 9.68% | 9.83% |
wrsETH/WETH Emode
| Parameter | wrsETH | WETH | WSTETH |
|---|---|---|---|
| Collateral | Yes | No | No |
| Borrowable | No | Yes | Yes |
| Max LTV | 93% | - | - |
| Liquidation Threshold | 95% | - | - |
| Liquidation Bonus | 1.0% | - | - |
wstETH/WETH E-Mode
| Parameter | wstETH | WETH |
|---|---|---|
| Collateral | Yes | No |
| Borrowable | Yes | Yes |
| Max LTV | 94% | - |
| Liquidation Threshold | 96% | - |
| Liquidation Bonus | 1.0% | - |
Additionally 0xac140648435d03f784879cd789130F22Ef588Fcd has been set as the emission admin for wstETH, wrsETh and the corresponding aTokens.
References
- Implementation: AaveV3Plasma
- Tests: AaveV3Plasma
- Snapshot: Direct-to-AIP
- Discussion
Copyright
Copyright and related rights waived via CC0.
03Mismatch analysis
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04Actions
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05Tally
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