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Summary:

This proposal updates the market rates for wstETH (Wrapped Staked ETH) and ETH on Fluid’s liquidity layer to better reflect current market conditions and optimize asset utilization.

Code Changes:

Update wstETH Rate Curve:

• 0% Utilization: Rate 0%
• 50% Utilization: Rate 17%
• 90% Utilization: Rate 14%
• 100% Utilization: Rate 100%

Update ETH Rate Curve:

• 0% Utilization: Rate 0%
• 50% Utilization: Rate 10%
• 90% Utilization: Rate 14%
• 100% Utilization: Rate 100%

Description:

The proposed adjustments to the wstETH Rate Curve are designed to encourage borrowing by making rates more attractive at higher utilization levels while still ensuring that lenders benefit from increased APR as market utilization rises. The modification aims to create a more dynamic and attractive economic environment for all participants:

• For Borrowers: More incentive to increase borrowing as rates become more favorable with higher utilization.
• Impact for Lenders: Higher utilization results in increased lending APR.
• Impact for Protocol: Increased borrowing enhances protocol revenue.

This proposal also updates the ETH Rate Curve to better allgn with current market conditions.

Conclusion:

This proposal updates the ETH and wstETH interest rates on the Fluid liquidity layer, ensuring that the rates are competitive and reflective of broader market conditions. The proposed rate curve strategy for wstETH promotes a balanced interaction between borrowers and lenders contributing to the overall health and growth of the platform.

Forum Link: Update wstETH Market Rates on Fluid