Radiant Capital

Abstract

RFP-34 proposes integrating weETH (Ether.Fi Liquid Restaking Token) as a full collateral and borrow market within Radiant Capital’s Ethereum and Arbitrum deployments.

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.

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

This governance proposal seeks approval to integrate weETH as an accepted form of collateral and as a borrowing market within Radiant Capital’s Ethereum and Arbitrum deployment. This expansion aligns with Radiant Capital’s vision of offering its users a comprehensive and diverse set of assets.

The Risk Committee has evaluated weETH and recommended the parameters for its integration into the platform, which will be outlined below.

Key Terms

• weETH - Wrapped EtherFi 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 weETH as a full collateral and borrow market

• Max LTV: 72.5%

• Liquidation Threshold: 75%

• Liquidation Bonus: 15%

• 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 weETH, a Chainlink feed for the weETH/eETH exchange ratio must be integrated. This feed will provide accurate, real-time exchange rate data for the weETH token. You can find a similar implementation on Arbitrum through the following link: Chainlink Arbitrum Feed, and for Ethereum: Chainlink Ethereum Feed.

• Smart Contract Implementation: Based on the defined parameters, the Radiant team will implement the necessary updates to enable the integration of weETH 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 weETH as a collateral and borrow market. This includes providing users with the option to select weETH as collateral and borrow assets, as well as displaying relevant information such as weETH 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 Ethereum and Arbitrum ecosystems.

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

Voting

• In Favor: Supportive of RFP-34, adding weETH to the Ethereum and Arbitrum deployments of Radiant

• Against: Against implementation of the RFP-34 proposal

• Abstain: Undecided, but contributing to quorum