[ARFC] Onboard ezETH to Arbitrum and Base Instances

[ARFC] Onboard ezETH to Arbitrum and Base Instances Author: ACI Date: 2024-10-29 Summary This is an ARFC to gauge community sentiment for adding borrow/lend support for Renzo Protocol and its Liquid Restaking Token (LRT) ezETH on AAVE V3 Base and Arbitrum.

Motivation As productive assets, staking tokens are high quality collateral to borrow against. ezETH is one of the largest liquid restaking tokens. With strong demand for ezETH on mainnet this proposal seeks to provide the opportunity for Aave users to make use of ezETH on leading Layer 2 networks: Base and Arbitrum.

The onboarding of ezETH on these L2s will create increased ezETH demand and increased revenues for both Aave and Renzo Protocol, whilst also bolstering the liquidity and peg stability of ezETH.

Chain to be deployed/listed Aave v3 instances on Base and Arbitrum.

Proof of Liquidity and Deposit Commitments ezETH deposits and wstETH borrows will be incentivized with Renzo Points.

Specification ezETH contracts:

Arbitrum: 0x2416092f143378750bb29b79eD961ab195CcEea5

Base: 0x2416092f143378750bb29b79ed961ab195cceea5

Risk Parameters: These will be provided by risk service providers and this ARFC updated with parameters accordingly.

ARFC updated with Risk Parameters by Risk Service Providers. 2024-10-31

Parameter Value Chain Arbitrum Isolation Mode No Borrowable Yes Collateral Enabled Yes Supply Cap 1,750 Borrow Cap 175 Debt Ceiling - LTV 72% LT 75% Liquidation Penalty 7.5% Liquidation Protocol Fee 10.00% Variable Base 0.0% 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 ETH-correlated, ezETH/wstETH Parameter Value Chain Base Isolation Mode No Borrowable Yes Collateral Enabled Yes Supply Cap 1,200 Borrow Cap 120 Debt Ceiling - LTV 72% LT 75% Liquidation Penalty 7.5% Liquidation Protocol Fee 10.00% Variable Base 0.0% 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 ETH-correlated, ezETH/wstETH CAPO Following the analysis in this post, we recommend using a 14-day MINIMUM_SNAPSHOT_DELAY and a maxYearlyRatioGrowthPercent of 10.89%.

maxYearlyRatioGrowthPercent ratioReferenceTime MINIMUM_SNAPSHOT_DELAY 10.89% monthly 14 days Useful Links Renzo Protocol

Documentation

Github

Audits

Chainlink Data Feed

Composable Stable Pool

TEMP CHECK for onboarding on Ethereum Instance

TEMP CHECK Snapshot for onboarding on Ethereum Instance

ARFC for onboarding on Lido Instance

ARFC Snapshot for onboarding on Lido Instance

Disclaimer This proposal is powered by Skywards. ACI is not directly affiliated with Renzo Protocol and did not receive compensation for creation this proposal.

Next Steps Publication of a standard ARFC, collect community & service providers feedback before escalating proposal to ARFC snapshot stage. 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.