Radiant Capital

Abstract

RFP-41 proposes integrating ezETH (Renzo Liquid Restaking Token) as a full collateral and borrow market within Radiant Capital’s Arbitrum deployment.

Motivation

Radiant Capital aims to provide a decentralized platform for lending and borrowing cryptocurrencies, offering users an efficient and secure means to access financing and generate yields. As the DeFi market evolves, expanding the platform’s offerings by incorporating new, high-quality assets as collateral and borrowing options is essential.

ezETH represents a liquid restaking derivative token that mirrors the value of staked ETH and its associated rewards. This token was created by Renzo, which provides users with the opportunity to participate in ETH staking rewards from the Ethereum network. Wrapped tokens, such as ezETH, enable the utilization of cryptocurrencies on different blockchains while remaining backed by the underlying asset.

This governance proposal seeks approval to integrate ezETH as an accepted form of collateral and as a borrowing market within Radiant Capital’s Arbitrum deployment. This expansion aligns with Radiant Capital’s vision of offering its users a comprehensive and diverse set of assets. The onboarding of ezETH will consequently create increased ezETH demand and increased fees for both Radiant and Renzo Protocol, whilst also bolstering the liquidity and peg stability of ezETH.

The Risk Committee and Chaos Labs have evaluated ezETH and recommended the parameters for its integration into the platform, which will be outlined below.

Key Terms

• ezETH - Renzo Restaked ETH

• Max LTV - The Maximum LTV ratio represents the maximum borrowing power of a specific collateral. For example, if a collateral has an LTV of 75%, the user can borrow up to 0.75 worth of ETH in the principal currency for every 1 ETH worth of collateral.

• Liquidation Threshold - This represents the threshold at which a borrow position will be considered undercollateralized and subject to liquidation for each collateral. For example, if a collateral has a liquidation threshold of 80%, it means that the position will be liquidated when the debt value is worth 80% of the collateral value.

Specifications

• Add ezETH as a full collateral and borrow market

Parameter	Value
Enable Borrowing	Yes
LTV	70.00%
LT	73.00%
Liquidation Bonus	7.50%
Supply Cap	550
Borrow Cap	55
U-Optimal	45%
Slope1	10.00%
Slope2	300.00%
Reserve Factor	25.00%

• Scale allocation points (incentive emissions) for lend and borrow markets as deposits grow for a two-week period, at which point AP will be stabilized

Steps to Implement

• Chainlink Integration: To list ezETH, a Chainlink feed for the ezETH/ETH exchange ratio must be integrated. This feed will provide accurate, real-time exchange rate data for the ezETH token.

• ezETH/ETH chainlink feed: 0x989a480b6054389075CBCdC385C18CfB6FC08186

• Smart Contract Implementation: Based on the defined parameters, the Radiant team will implement the necessary updates to enable the integration of ezETH as a collateral and borrow market with the parameters as laid out above. This implementation will involve coding and testing the smart contracts to ensure their functionality and security.

• User Interface Update: The Radiant Capital user interface will be updated to reflect the addition of ezETH as a collateral and borrow market. This includes providing users with the option to select ezETH as collateral and borrow assets and displaying relevant information such as ezETH exchange rates, available loan options, and associated risks.

Overall Cost/Impact

Minimal.

Timeline

Integration is expected to occur swiftly, subject to the following stages:

• Local Testing: The Radiant team will conduct thorough testing of the implementation in a local environment to ensure its functionality, security, and compatibility within the Arbitrum ecosystem.

• Staging: Following Chainlink Feed integration, the implementation will proceed to a staging phase, where further testing will verify the integrity and functionality of the ezETH collateral and borrow market.

Voting

• In Favor: Supportive of RFP-41, adding ezETH to the Arbitrum deployment of Radiant

• Against: Against implementation of the RFP-41 proposal

• Abstain: Undecided, but contributing to quorum