Author

Chaos Labs

Summary

Chaos Labs has conducted research regarding a potential integration involving Mellow restaking vaults. Note: The following analysis is based exclusively on market risk considerations, deliberately excluding centralization and third-party risk factors. Should the community seek to mitigate exposure to Mellow, it may be prudent to consider the implementation of more conservative supply and borrow caps.

Analysis

What is Mellow? Many of the vault tokens associated with Mellow exhibit limited on-chain liquidity, or lack any liquidity altogether. This deficiency necessitates a substantial withdrawal time buffer, often extending over multiple days, which complicates the feasibility of atomic liquidations. In light of these liquidity constraints, the immediate integration of the following vaults will be approached with relatively low caps to ensure stability and effectively manage risk:

• pzETH: On-chain liquidity with a liquidation bonus below 3% (900 ETH) Contract: 0x8c9532a60E0E7C6BbD2B2c1303F63aCE1c3E9811
• rstETH: On-chain liquidity below 350 ETH Contract: 0x7a4EffD87C2f3C55CA251080b1343b605f327E3a
• steakLRT: On-chain liquidity below 350 ETH Contract: 0xBEEF69Ac7870777598A04B2bd4771c71212E6aBc
• amphrETH: On-chain liquidity below 350 ETH Contract: 0x5fD13359Ba15A84B76f7F87568309040176167cd

The underlying assets that constitute these vault tokens are sound liquid staked tokens (LSTs), for which an LT of 90% is recommended for all. These vaults utilize a fundamental oracle for valuation purposes.

Recommendation

pzETH

Asset: pzETH Chain: Ethereum Credit Manager: Restaking WETH Quota Limit: 1800 minRate: .5% maxRate: 30% Liquidation Threshold: 0.90

rstETH

Asset: rstETH Chain: Ethereum Credit Manager: Restaking WETH Quota Limit: 700 minRate: .5% maxRate: 30% Liquidation Threshold: 0.90

steakLRT

Asset: steakLRT Chain: Ethereum Credit Manager: Restaking WETH Quota Limit: 700 minRate: .5% maxRate: 30% Liquidation Threshold: 0.90

amphrETH

Asset: amphrETH Chain: Ethereum Credit Manager: Restaking WETH Quota Limit: 700 minRate: .5% maxRate: 30% Liquidation Threshold: 0.90

Trade adapters:

Add the following pools to the trade adapter of Restaking WETH CM

1. Curve:
   1. ezETH/pzETH 0x8c65cec3847ad99bdc02621bdbc89f2ace56934b
   2. ezETH/WETH 0x85de3add465a219ee25e04d22c39ab027cf5c12e
2. Balancer:
   1. ezETH/WETH 0x596192bb6e41802428ac943d2f1476c1af25cc0e000000000000000000000659
   2. amphrETH/rstETH/wstETH/Re7LRT/steakLRT 0x4216d5900a6109bba48418b5e2ab6cc4e61cf4770000000000000000000006a1
3. Uniswap:
   1. ezETH/WETH 0.01% (0xBE80225f09645f172B079394312220637C440A63)
   2. wstETH/pzETH 0.01% (0xfc354f5cf57125a7d85e1165f4fcdfd3006db61a)
   3. amphrETH/wstETH 0.3% (0xf3ae577b0ce3f7cfba28b5d07eccee54a959ef3c)

Txs log

Md checksum is 7f260956ba3443b0c6c16b41f427fc2b Txs log can be found here