Author

Chaos Labs

Summary

Chaos Labs recommends increasing the Quota Limit on Gearbox’s Ethereum deployment for the following asset:

• rstETH
• steakLRT
• amphrETH
• pzETH

This recommendation was made utilizing our Quota Limit methodology, taking into account the fundamental oracle configuration on Gearbox.

On-chain Supply Growth

rstETH, steakLRT, amphrETH

The supply of all three Mellow LRTs assets on the Ethereum Mainnet has increased since their listing, with current figures showing rstETH at 65,708, steakLRT at 13,229, and amphrETH at 59,696.

pzETH

The supply for pzETH has increased steadily since its lising and is now at 46,199.

Liquidity

rstETH, steakLRT, amphrETH

rstETH, steakLRT, amphrETH currently share the same Balancer pool, with a total liquidity of $2.06 million, or 730 ETH. Currently, 17% of the pool's reserves consist of wstETH. Chaos Labs recommends further diversifying the liquidity by introducing additional pools and trading pairs over time.

pzETH

The pzETH pools on Curve and Uniswap currently holds a total liquidity of 311 wstETH.

Recommendation

The underlying assets of these vault tokens are robust LSTs, with a current LT of 90%. With the implementation of a fundamental oracle that effectively isolates delta exposure, the risk associated with increasing the quota limit is significantly reduced. Therefore, we recommend raising the Quota Limit in the WETH market for all four assets to 7,000 to allow these markets to safely grow.

Specification

Changes are recommended for Trade WETH v3 Pool on Mainnet.

Transaction log

Txs log can be found here Md5 checksum is d5039d8859330e15197e471dab90bfcd