[ARFC] Onboard STONE to Aave V3 on Scroll

Title: [ARFC] Onboard STONE to Aave V3 on Scroll

Author: ACI

Date: 2024-09-02

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Summary

StakeStone is the protocol issuing STONE, the liquid ETH, with over 150k users. Currently, StakeStone is seeking support to onboard STONE to Aave V3 on Scroll and is launching a series of initiatives to boost liquidity and Aave adoption.

Motivation/Background

STONE is an ERC-20 rebalancing token that generates risk-free rewards for ETH based on blue-chip underlying assets like Lido, EigenLayer, and Symbiotic in a decentralized manner through our OPAP governance mechanism. StakeStone currently has $350 million worth of STONE deployed on Scroll. To ensure that STONE has robust liquidity, in addition to the STONE-ETH DEX liquidity on Scroll, STONE also has PMM powered cross-chain liquidity. Users can perform cross-chain redemption and receive ETH on the Ethereum mainnet within 40 seconds, with optimized pricing.

STONE aims to become the liquid ETH, covering users’ opportunity costs while creating more use cases for STONE holders. Thanks to its architecture supporting multiple underlying assets, STONE can maintain market adaptability and stability over the long term, allowing users and the protocol to avoid the need to mint or integrate a new asset.

Benefits of listing STONE token:

STONE is collaborating with Scroll to build a DeFi ecosystem. STONE works closely with various protocols to support the ecosystem and facilitate their go-to-market strategies. Currently, STONE is the largest asset category on Scroll, accounting for over 30% of the total TVL across the chain, with a high utilization rate (close to 90%). The StakeStone team is dedicated to offering services to protocols that support STONE while fostering collaboration for shared prosperity, which is reflected in the high utilization of STONE across various DeFi use cases.

Market Impact:

As of today, over 180,000 ETH have been staked in StakeStone, with a historical high of 340,000 ETH. StakeStone has also successfully processed nearly 1 billion dollars in inflows and outflows. Meanwhile, STONE has a wide user base, and all users are very active on-chain. We hope that this active community can bring more liquidity and activity to AAVE.

Chain to be deployed/listed:

Scroll chain. Scroll grew to become the top zk rollup in terms of TVL and shows continued strength in community and volume.

Proof of Liquidity (POL) and Deposit Commitments

StakeStone has collaborations with external parties to bootstrap liquidity for a more robust and diverse liquidity environment at AAVE. Large liquidity providers are highly interested in using STONE in AAVE and further boosting DEX liquidity for STONE. StakeStone will also have its own liquidity mining incentive campaign for STONE in AAVE.

To incentivize the use of STONE in AAVE, StakeStone will provide boosted STONE points for STONE suppliers and is planning a yield-boost campaign specifically designed to maximize engagement.

Among our active liquidity providers, we have gathered strong interest in using STONE for lending and borrowing. The team will actively engage with liquidity providers to achieve a supply of at least 5,000 STONE, gradually increasing it over time as risk parameters are adjusted.

Specification

Following analysis from Chaos Labs, the recommend the following parameter settings are:

Parameter	Value
Isolation Mode	No
Borrowable	Yes
Collateral Enabled	Yes
Supply Cap	4,800
Borrow Cap	480
Debt Ceiling	-
LTV	72.5%
LT	75%
Liquidation Bonus	7.5%
Liquidation Protocol Fee	10.00%
Variable Base	0.00%
Variable Slope1	7.00%
Variable Slope2	300.00%
Uoptimal	45.00%
Reserve Factor	15.00%
Stable Borrowing	Disabled
Flashloanable	Yes
Siloed Borrowing	No
Borrowable in Isolation	No
E-Mode Category	N/A

Other relevant information

STONE has undergone multiple rounds of audits conducted by firms such as Quantstamp, Slowmist, Veridise, and Secure3, and closely collaborates with security organizations like Cobo and Coincover.

Useful Links

Dune Analytics for data about STONE

Security audits

Governance votes about asset

OPAP proposal example

Disclaimer

This proposal is powered by Skywards. ACI is not directly affiliated with StakeStone and did not receive compensation for creating this proposal.

Next Steps

1. Publication of a standard ARFC, collect community & service providers feedback before escalating proposal to ARFC snapshot stage
2. If the ARFC snapshot outcome is YAE, publish an AIP vote for final confirmation and enforcement of the proposal.

Copyright

Copyright and related rights waived under CC0