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Title: [ARFC] Onboarding sfrxETH to Aave V3 Ethereum Market Author: @0xTogbe - Aave Chan Initiative Created: 2023-11-27

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Summary

This ARFC proposes the addition of sfrxETH from Frax to Aave V3 Ethereum to enhance LST liquidity and asset diversity.

Motivation

sFrxETH is the Staked version of FrxETH from the Frax Ecosystem. Users can freely mint frxETH in exchange for ETH deposits.

The Aave-Chan Initiative supports LST diversity in Aave V3 as shown with our historical support of cbETH, rETH, and, parallel to this proposal, our support for ETHx.

This proposal is a reboot of ARC Proposal: Onboarding sfrxETH from Frax Protocol to Aave V3 Ethereum Market 10 from January. More details for sFrxETH can be found in the first proposal.

Specification

• Contract Address: sfrxETH : 0xac3e018457b222d93114458476f3e3416abbe38f 2

After review of initial Risk Parameters by Risk Managers (Gauntlet & Chaos Labs) there are currently two possibilities: to apply Conservative Risk Parameters or to apply Aggressive Risk Parameters.

Conservative Risk Parameters Option:

Parameter	Value
Isolation Mode	No
Borrowable	Yes
Collateral Enabled	Yes
Supply Cap (sfrxETH)	40,000
Borrow Cap (sfrxETH)	4,000
Debt Ceiling	-
LTV	71.00%
LT	74.50%
Liquidation Bonus	7.5%
Liquidation Protocol Fee	10.00%
Variable Base	0.0%
Variable Slope1	7.00%
Variable Slope2	300.00%
Uoptimal	45.00%
Reserve Factor	15.00%
Stable Borrowing	Disabled
Flahloanable	Yes
Siloed Borrowing	No
Borrowed in Isolation	No
E-Mode Category	ETH-correlated

Aggressive Risk Parameters Option:

Parameter	Value
Isolation Mode	No
Borrowable	Yes
Collateral Enabled	Yes
Supply Cap (sfrxETH)	55,000
Borrow Cap (sfrxETH)	5,500
Debt Ceiling	-
LTV	74.50%
LT	77.00%
Liquidation Bonus	5%
Liquidation Protocol Fee	10.00%
Variable Base	0.0%
Variable Slope1	7.00%
Variable Slope2	300.00%
Uoptimal	45.00%
Reserve Factor	15.00%
Stable Borrowing	Disabled
Flahloanable	Yes
Siloed Borrowing	No
Borrowed in Isolation	No
E-Mode Category	ETH-correlated

Next Steps

1. Solicit feedback from the Aave community.
2. If community sentiment is favorable, proceed with the ARFC snapshot.
3. Success in the snapshot leads to the development of an AIP.

Disclaimer

This proposal is powered by Skywards. The Aave Chan Initiative is not directly affiliated with Frax Protocol and did not receive compensation for creation this proposal.

Copyright

Copyright and related rights waived via CC0.