onboard WSTETH to Aave Optimism V3 pool
01Summary
This AIP proposes onboarding wstETH (wrapped staked ETH) as a collateral asset to Aave's Optimism v3 Liquidity Pool with a 70% LTV, 79% liquidation threshold, and caps of 6,000 supply and 940 borrow. The asset will be borrowable but not in isolation mode, with risk parameters developed collaboratively by Gauntlet and Chaos Labs.
- Type
- protocol addition
Key changes
- wstETH asset listing on Optimism v3 with 70% LTV and 79% liquidation threshold(high)
- Supply cap set to 6,000 wstETH and borrow cap set to 940 wstETH to limit risk exposure(high)
- Asset enabled as collateral and for borrowing but disabled for isolation mode and silo borrowing(medium)
- 7.2% liquidation bonus and 15% reserve factor configured for the asset(medium)
Notable concerns
- Proposal execution depends on correct implementation of GenericListingEngine contract
- Risk parameters should be monitored as they represent new LSD on the platform
Generated by Kvorum
02Description
Simple Summary
This AIP proposal presents Aave with the opportunity to onboard wstETH to the optimism v3 Liquidity Pool.
Motivation
Supporting LSD diversity is part of the Aave-Chan Initiative (ACI) delegate platform.
The ACI does not have any link nor is paid by Optimism or any entity to present this AIP.
The risk parameters provided introduce wstETH as a collateral asset.
Supply and borrow caps are suggested for this asset to limit risk exposure, the caps have been proposed by a join collaboration between Gauntlet & Chaos Labs.
Specification
Ticker: wstETH
Contract Address: 0x1F32b1c2345538c0c6f582fCB022739c4A194Ebb
| Risk Parameter | Value |
|---|---|
| Isolation Mode | NO |
| Enable Borrow | YES |
| Enable Collateral | YES |
| Loan To Value | 70% |
| Liquidation Threshold | 79% |
| Liquidation Bonus | 7.2% |
| Reserve Factor | 15% |
| Liquidation Protocol Fee | 10% |
| Borrow Cap | 940 |
| Supply Cap | 6000 |
| Debt Ceiling | N/A |
| Base | 0.25% |
| Slope1 | 4.5% |
| Uoptimal | 45% |
| Slope2 | 80% |
The proposal payload uses the GenericListingEngine to perform a new asset listing with the following parameters:
IGenericV3ListingEngine.Listing({
asset: WSTETH,
assetSymbol: 'wstETH',
priceFeed: WSTETH_USD_FEED,
rateStrategy: https://optimistic.etherscan.io/address/0x6ba97468e2e6a3711a6dd05f0075d48e878c910e,
enabledToBorrow: true,
stableRateModeEnabled: false,
borrowableInIsolation: false,
withSiloedBorrowing: false,
flashloanable: false,
ltv: 70_00,
liqThreshold: 79_00,
liqBonus: 7_20,
reserveFactor: 15_00,
supplyCap: 6_000,
borrowCap: 940,
debtCeiling: 0,
liqProtocolFee: 10_00,
eModeCategory: 0
});
References
A list of relevant links like for this proposal e.g.
Security Considerations
The proposal Payload was reviewed by Bored Ghost Developing.
Deployed Contracts
Copyright
Copyright and related rights waived via CC0.
03Mismatch analysis
The proposal follows the standard Aave governance execution pattern: the on-chain action is a single execute(address) call that invokes a previously deployed payload contract, rather than the individual listing parameters being encoded directly in the top-level calldata. The address passed in the decoded argument (0x84893EE84e773E4a7a5738BD903dBE2a6E636B9e) exactly matches the 'AaveV3OPWSTETHPayload: ProposalPayload' address given in the description's Deployed Contracts section. Since the payload's internal logic (which would contain the wstETH listing parameters such as LTV, liquidation threshold, caps, etc.) is not further decoded in the provided calldata rows, there is nothing to compare those specific numeric risk parameters against directly — this is normal for Aave AIPs, where the description documents what the referenced payload contract does. No mismatch, omission, or misleading phrasing was found between the address referenced in the description and the address actually executed on-chain, and no additional calldata actions were present that the description failed to mention. Given the exact address match and the well-known execute-payload pattern, I have high confidence this proposal's description accurately represents the on-chain action being voted on.
Generated by Kvorum
04Actions
- Target
- 0x5f5c…6711
- Value
- 0 wei
- Function
- execute(address)
- Arguments
{ "0": "0x84893EE84e773E4a7a5738BD903dBE2a6E636B9e" }- Calldata
05Tally
Summed from votes
06Voters
| Voter | Choice | % of total | Rationale | ||
|---|---|---|---|---|---|
| 320x329c…3ed4 | For | 220.6K | 0.00% | — | 4y ago |
| 070x0703…961b | For | 106.9K | 0.00% | — | 4y ago |
| B80xb83b…cf5c | For | 80.2K | 0.00% | — | 4y ago |
| 550x55b1…f262 | For | 60.7K | 0.00% | — | 4y ago |
| B90xb933…8dd1 | For | 41.7K | 0.00% | — | 4y ago |
| EA0xea17…6676 | For | 10.6K | 0.00% | — | 4y ago |
| B90xb97a…2e27 | For | 812.6 | 0.00% | — | 4y ago |
| C30xc36e…67d7 | For | 500 | 0.00% | — | 4y ago |
| 5F0x5fa0…cfa8 | For | 201 | 0.00% | — | 4y ago |
| 6B0x6bef…84a3 | For | 142.8 | 0.00% | — | 4y ago |
| B60xb6d8…8f54 | For | 111.8 | 0.00% | — | 4y ago |
| 680x6805…b842 | For | 109.5 | 0.00% | — | 4y ago |
| 350x35dc…8a15 | For | 104.8 | 0.00% | — | 4y ago |
| D90xd9af…4409 | For | 100 | 0.00% | — | 4y ago |
| AE0xae85…1c28 | For | 100 | 0.00% | — | 4y ago |
| 460x46de…78fd | For | 100 | 0.00% | — | 4y ago |
| 1E0x1ec2…a460 | For | 100 | 0.00% | — | 4y ago |
| A90xa96b…9137 | For | 100 | 0.00% | — | 4y ago |
| 6A0x6a4c…c823 | For | 100 | 0.00% | — | 4y ago |
| A70xa7cc…7a0a | For | 100 | 0.00% | — | 4y ago |
| 250x256c…beaa | For | 34.7 | 0.00% | — | 4y ago |
| 080x08bc…535d | For | 10.3 | 0.00% | — | 4y ago |
| FC0xfca9…46ca | For | 10.1 | 0.00% | — | 4y ago |
| A00xa0ef…2d56 | For | 8.3 | 0.00% | — | 4y ago |
| 2A0x2a61…3c16 | For | 3 | 0.00% | — | 4y ago |
| E20xe266…43a0 | For | 2.2 | 0.00% | — | 4y ago |
| 210x21a4…f09f | For | 2 | 0.00% | — | 4y ago |
| 280x288b…b106 | For | 1.5 | 0.00% | — | 4y ago |
| 4C0x4cb7…7cd5 | For | 1.5 | 0.00% | — | 4y ago |
| 8B0x8bc8…7276 | For | 1.2 | 0.00% | — | 4y ago |
| 2B0x2ba0…8412 | For | 1.1 | 0.00% | — | 4y ago |
| 3A0x3a40…9abc | For | 1.1 | 0.00% | — | 4y ago |
| 060x065f…c1a2 | For | 1.1 | 0.00% | — | 4y ago |
| A80xa817…f503 | For | 1 | 0.00% | — | 4y ago |
| C70xc724…b01d | For | 1 | 0.00% | — | 4y ago |
| 320x3225…c43b | For | 1 | 0.00% | — | 4y ago |
| F90xf955…c10c | For | 1 | 0.00% | — | 4y ago |
| 570x57f0…6e50 | For | 1 | 0.00% | — | 4y ago |
| 1C0x1c68…d130 | For | 1 | 0.00% | — | 4y ago |
| 000x0040…9c09 | For | 1 | 0.00% | — | 4y ago |
| F90xf920…9125 | For | 1 | 0.00% | — | 4y ago |
| 610x61e1…5d8a | For | 1 | 0.00% | — | 4y ago |
| 8D0x8d01…8ccc | For | 1 | 0.00% | — | 4y ago |
| C70xc7e3…f022 | For | 1 | 0.00% | — | 4y ago |
| 7E0x7eaf…3555 | For | 0.9 | 0.00% | — | 4y ago |
| 5B0x5b19…9864 | For | 0.5 | 0.00% | — | 4y ago |
| 990x99ba…dbb4 | For | 0.4 | 0.00% | — | 4y ago |
| 130x13af…d896 | For | 0.3 | 0.00% | — | 4y ago |
| 9B0x9b2a…9bf6 | For | 0.2 | 0.00% | — | 4y ago |
| 510x511a…302d | For | 0.2 | 0.00% | — | 4y ago |
07Forum
- [ARC] Add wstETH to Aave v3 on Optimism ↗discourse · high confidence
Arguments for
- stETH has been the top-performing asset on Aave's Ethereum deployments, so bringing wstETH to Optimism V3 should replicate that success and drive borrowing demand and fee revenue on L2.— jbeezy
- Listing wstETH on Optimism extends Lido's L2 presence and enables developers to build recursive stETH/ETH strategies and other DeFi products similar to those already built on Ethereum mainnet (InstaDapp, Index Coop, Galleon DAO).— jbeezy
- Conservative, liquidity-adjusted risk parameters (low supply/borrow caps, reduced LTV/LT relative to Ethereum) were proposed to safely bootstrap the market while allowing room to grow as usage increases.— Pauljlei, Llamaxyz
- Creating an ETH-correlated eMode category would let users efficiently borrow ETH against wstETH collateral to compound staking and LP yields with minimal added risk given the low borrow cap.— Llamaxyz
- The underlying Lido bridging contracts and stETH/wstETH token have already been audited and secured via a DAO-owned bridge with multisig emergency controls, supporting technical readiness for listing.— jbeezy, Llamaxyz
- Technical reviewers concluded it is possible to proceed with the listing even without a fully optimal oracle setup, since the risk profile remains manageable.— bgdlabs
Arguments against
- wstETH liquidity on Optimism is dramatically lower than on Ethereum (roughly 99% less), creating higher slippage risk and potential insolvency if large positions must be liquidated.— Pauljlei
- A 1% liquidation bonus for the proposed eMode may be insufficient to incentivize liquidators given the higher slippage on Optimism, increasing protocol insolvency risk.— Pauljlei
- There is no stETH/ETH Chainlink price feed on Optimism, forcing a less ideal oracle composition (stETH/USD and wstETH/stETH) that introduces price desynchronization risk, especially for the proposed eMode.— sakulstra, bgdlabs
- Using two separate Chainlink oracle feeds for wstETH pricing will likely incur additional protocol costs once Chainlink monetizes its feeds.— Llamaxyz
Unresolved concerns
- The exact price deviation risk introduced by the lack of a stETH/ETH oracle on Optimism was not fully quantified before the eMode parameters were finalized.— sakulstra
- The optimal oracle price-sync adapter for wstETH on Optimism was acknowledged as suboptimal, with only a promise to improve it in the future rather than a resolved solution at listing time.— bgdlabs
- The recommended borrow cap (940) was already exceeded by observed daily trading volume and liquidity pool holdings, raising questions about whether the cap would unduly constrain organic market growth.— Llamaxyz
Notable participants
- jbeezyOriginal proposer from the Lido DAO who authored the ARC and provided project, technical, and market background for wstETH.
- PauljleiRepresented Gauntlet, providing and iterating on risk parameter recommendations (caps, LTV/LT, eMode liquidation bonus).
- LlamaxyzConducted an independent risk assessment, proposed eMode and reserve factor adjustments, and managed the Snapshot vote process.
- bgdlabsProvided technical guidance on oracle/pricing architecture and confirmed feasibility of proceeding despite oracle limitations.
- sakulstraRaised a technical concern about oracle price desynchronization risk for the proposed eMode and requested a 'no eMode' voting option.
- MarcZellerAnnounced publication of the AIP by the ACI and the start of the governance vote.
- sickvisionzConfirmed the AIP passed and was executed, expressing enthusiasm for the new listing.
Generated by Kvorum
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