Gearbox DAO

Author

Chaos Labs

Summary

Chaos Labs supports listing rsETH on Gearbox in Credit Managers Trade WETH Tier 1 and Trade WETH Tier 2 on Arbitrum; 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 rsETH, adopting more conservative supply and borrow caps should be considered.

Liquidity and Market Cap

rsETH’s current market cap is $1B; since inception it has an average daily trading volume of $7.6M. On Arbitrum, its liquidity is concentrated on Uniswap V3, with an active pool on Camelot also providing liquidity.

rsETH / ETH Volatility

Liquidation Threshold

Considering the volatility of rsETH relative to ETH, we recommend a Liquidation Threshold of 0.90.

Quota Limit

Following Chaos Labs’ approach to initial quotas, we propose setting the Quota Limit at 2x the liquidity available under the Liquidation Premium (3%) price impact. Using this methodology, we propose a starting Quota Limit of 2,000 WETH.

Specification

Asset: rsETH Chain: Arbitrum Credit Managers: Trade WETH Tier 1, Trade WETH Tier 2 Quota Limit: 2,000 minRate: .5% maxRate: 30% Liquidation Threshold: 0.90 Fundamental Oracle: Redstone Market Oracle (Reserve): Chainlink rsETH / ETH (0xb0EA543f9F8d4B818550365d13F66Da747e1476A) ETH/USD Conversion Oracle: Chainlink ETH / USD (0x639Fe6ab55C921f74e7fac1ee960C0B6293ba612) Trading Adapter Pools:

• Uniswap V3 rsETH/WETH 0.01 (0x48b0aB72c2591849e678e7d6f272b75eF9b863F7)
• Balancer rsETH/WETH (0x90e6cb5249f5e1572afbf8a96d8a1ca6acffd73900000000000000000000055c)
• Camelot V3 rsETH/WETH (0xb355ccE5CBAF411bd56e3b092F5AA10A894083ae)

Transaction log

Transaction log is available here. md5 checksum is 429f9b7d1cd2d8edc7e720fea493d296.