Author

Chaos Labs

Summary

Chaos Labs supports listing USDS and sUSDS on Gearbox Ethereum; 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 technical, centralization and third-party risk considerations. If the community aims to reduce exposure to USDS and sUSDS for any non-economic risk reason, adopting more conservative supply and borrow caps should be considered.

Recommendations

Liquidation Threshold

Despite the relatively nascent on-chain liquidity, the ability to instantly convert USDS into the more established stablecoin DAI—backed by a diverse range of collateral, a robust redemption mechanism, and the strong reputation of the underlying protocol— supports our recommendation to follow our internal Long-Term (LT) approach. Accordingly, we propose a Liquidation Threshold (LT) of 0.9 for USDS. For sUSDS, its ability to instantly revert back into USDS eliminates any liquidity concerns, we also recommend a 0.9 LT there too.

Quota Limit

Following Chaos Labs’ approach to initial quotas, we propose a starting Quota Limit of 50M USDS and 50M sUSDS respectively across all pools.

Technical specification

USDC pool parameters:

Token	USDS	sUSDS	stkUSDS	SKY
Quota Limit	25M USDC	12.5M USDC	12.5M USDC	0
minRate	0.05%	0.05%	0.05%	0.01
maxRate	25%	25%	25%	0.01

GHO pool parameters:

Token	USDS	sUSDS	stkUSDS	SKY	WETH
Quota Limit	4M GHO	4M GHO	4M GHO	0	0
minRate	0.05%	0.05%	0.05%	0.01	0.01
maxRate	25%	25%	25%	0.01	0.01

USDT, DAI pool parameters:

Token	USDS	sUSDS	stkUSDS	SKY
Quota Limit	4M USDT/DAI	4M USDT/DAI	4M USDT/DAI	0
minRate	0.05%	0.05%	0.05%	0.01
maxRate	25%	25%	25%	0.01

USDC, USDT, DAI, GHO pool parameters:

1. USDS oracle: Main: Bounded Chainlink DAI oracle 0xbFB69fEbe37A3F4874e8b3017465aa0D18c88fe6 Reserve: Redstone DAI oracle 0xa0b9387f0a74eCB9AC1a3BFE4Ada0E001ffE006b
2. sUSDS oracle: Main: sUSDS erc4626 exchange rate * Main USDS oracle Reserve: sUSDS erc4626 exchange rate * Reserve USDS oracle
3. stkUSDS oracle: Main: the same as USDS Reserve: the same as USDS
4. SKY oracle: Zero price feed

USDC, USDT, DAI Tier 1 CMs parameters:

Token	USDS	sUSDS	stkUSDS	SKY
LT	0.9	0.9	0.9	0

3. Trading adapters:

• Uniswap V2 SKY/USDS 0x2621cc0b3f3c079c1db0e80794aa24976f0b9e3c
• Uniswap V3 SKY/WETH 0.3% 0x764510aB1d39CF300e7abe8F5B8977D18F290628
• DAI<->USDS LitePSM converter: 0x3225737a9Bbb6473CB4a45b7244ACa2BeFdB276A
• sUSDS erc4626 deposit/withdraw
• SKY Rewards rate contract deposit/withdraw 0x0650CAF159C5A49f711e8169D4336ECB9b950275

GHO Tier 1 CM parameters:

Token	USDS	sUSDS	stkUSDS	SKY	WETH
LT	0.9	0.9	0.9	0	0

3. Trading adapters:

• Uniswap V2 SKY/USDS 0x2621cc0b3f3c079c1db0e80794aa24976f0b9e3c
• Uniswap V3 SKY/WETH 0.3% 0x764510aB1d39CF300e7abe8F5B8977D18F290628
• Uniswap V3 USDC/WETH 0.05% 0x88e6A0c2dDD26FEEb64F039a2c41296FcB3f5640
• DAI<->USDS LitePSM converter: 0x3225737a9Bbb6473CB4a45b7244ACa2BeFdB276A
• sUSDS erc4626 deposit/withdraw
• SKY Rewards rate contract deposit/withdraw 0x0650CAF159C5A49f711e8169D4336ECB9b950275

Transaction log

Txn log can be found here Md5 checksum is 23b8e94b63d57c76e9c69ac0fed456c5