Author

Chaos Labs

Overview

Chaos Labs supports listing ezETH on Gearbox Optimism; our analysis and risk parameter recommendations for the initial listing are below.

Note: The following analysis is conducted solely from a market risk viewpoint, excluding centralization and third-party risk considerations. If the community aims to reduce exposure to ezETH, adopting more conservative supply and borrow caps should be considered.

Liquidity and Market Cap

ezETH’s current market cap is $3.3B, with an average market cap of $1.5B over the last 180 days; its average daily volume over the same timeframe was $66M. However, its market cap in ETH terms has recently declined once withdrawals were opened. On Optimism, DEX liquidity is concentrated on Velodrome, with a single pool (paired with wstETH) facilitating a significant proportion of volume.

Liquidation Threshold

Considering the volatility of ezETH relative to ETH, we recommend a Liquidation Threshold of 0.90 across all chains.

Quota Limit

Following Chaos Labs’ approach to initial quotas, we propose setting the Quota Limit at 2x the liquidity available under the Liquidation Premium (5%) price impact. However, this methodology would lead to a Quota Limit greater than 50% of Optimism’s on-chain ezETH supply. We do not recommend exceeding 50% during an initial listing — though it can be raised to as high as 75% after observation — and thus recommend a starting Limit of 350.

Specification

List ezETH on Optimism

Chain: Optimism Asset: ezETH Credit Managers: WETH Tier 1, WETH Tier 2 Quota Limit: 350 Liquidation Threshold: 0.90 Fundamental Oracle: Chainlink ezETH / ETH Exchange Rate (0xFAD40C0e2BeF93c6a822015863045CAAeAAde4d3) Market Oracle: Redstone ETH/USD Conversion Oracle: Chainlink ETH / USD (0x13e3Ee699D1909E989722E753853AE30b17e08c5) Trading Adapter Pool: VELODROME_V2_ROUTER (0xb71Ac980569540cE38195b38369204ff555C80BE) minRate: 0.5% maxRate: 30%

Liquidation Threshold Update

Chain: Ethereum Asset: ezETH Credit Manager: Restaking WETH Previous Value: 0.87 New Value: 0.90

Chain: Arbitrum Asset: ezETH Credit Manager: WETH Tier 1 Previous Value: 0.87 New Value: 0.90

Chain: Optimism Asset: ezETH Credit Manager: WETH Tier 1, WETH Tier 2 Previous Value: - New Value: 0.90

Transaction log

Transaction log is available here. md5 checksum is dcddfb3705eb65791042017371474695 for Mainnet, 06f1976d02d7f91fed730d79ca3f59d4 for Arbitrum, de2a88f483207816cc655efb5cd12af5 for Optimism.

Voting

Approve/Reject