Authors

@apeir99n, @DeSnake

Summary

This proposal aims to change risk parameters for v3 Arbitrum deployment and add native USDC pool and corresponding Credit Managers.

Motivation

Risk parameters reassessment:

The major part of Gearbox utilization comes from Ethereum use cases, namely leveraged restaking and points farming. Mostly it’s due to Ethereum domination in terms of DeFi liquidity, however there is clearly a trend of LRTs and Ethena expansion to L2s. Moreover, currently unutilized margin trading use case is expected to benefit from the cheapness and speed of L2s. Proposing to update risk parameters, we pursue the goal of increasing Arbitrum deployment safety (mainly to pay more attention to Ethereum deployment) while keeping it suitable for existing use cases.

Native USDC onboarding:

Arbitrum One has supported Bridged USDC since conception, with over a billion Bridged USDC currently in circulation. On June 8th 2023, Circle added support for the Cross-Chain Transfer Protocol and launched Arbitrum-native USDC, which enables direct minting and burning of Arbitrum-Native USDC on Arbitrum One. Due to this, the Bridged USDC token symbol was renamed from USDC to USDC.e to accommodate Arbitrum-native USDC. As a part of Gearbox approved LTIPP programme we plan to direct part of approved grant to incentivize migration from USDC.e to USDC pool.

Technical specification

Tokens liquidity

• WETH 2000 WETH can be sold into ~7.8M USDC via Odos router with 0.89% slippage.
• WBTC 35 WBTC can be sold into ~2.4M USDC via Odos router with 0.87% slippage. 35 WBTC can be sold into ~607 WETH via Odos router with 0.82% slippage. Note: ~120 WBTC can be sold using liquidity sources that are not integrated into Gearbox router.
• wstETH 1700 wstETH can be sold into WETH via Odos router with 0.7% slippage. 1200 wstETH can be sold into ~5.5M USDC via Odos router with 0.93% slippage.
• rethETH 600 rETH can be sold into WETH via Odos router with 0.76% slippage. 550 rETH can be sold into ~2.4M USDC via Odos router with 0.93% slippage.
• cbETH 230 cbETH can be sold into WETH via Odos router with 0.9% slippage. 220 cbETH can be sold into ~900k USDC via Odos router with 0.91% slippage.
• USDe 5M USDe can be sold into USDC through Camelot V3 and Curve pools with 0.6% slippage Camelot V3 $10M TVL pool Curve $7M TVL pool
• ARB 1500000 ARB can be sold into ~1.9M USDC via Odos router with 0.88% slippage. 1500000 ARB can be sold into ~476 WETH via Odos router with 0.81% slippage.
• LINK 13000 LINK can be sold into ~56 WETH via Odos router with 0.96% slippage. 13000 LINK can be sold into ~220k USDC via Odos router with 0.9% slippage.
• GMX 4000 GMX can be sold into ~33 WETH via Odos router with 0.91% slippage. 4000 GMX can be sold into ~130k USDC via Odos router with 0.85% slippage.
• PENDLE 75000 PENDLE can be sold into ~134 WETH via Odos router with 1.04% slippage. 75000 PENDLE can be sold into ~528k USDC via Odos router with 0.85% slippage.

Key risk parameters

It’s proposed to increase liquidation premiums for all credit managers to match those of Mainnet deployment. It was initially set to lower values due to more frequent oracles updates on Arbitrum, but we believe it will be beneficial to set safer parameters to move risk monitoring attention to the most utilized Ethereum deployment.

Limits are proposed according to available liquidity.

WETH market parameters

Main WETH v3 pool limits

Token	Proposed limit
USDC	2000
WBTC	1500
ARB	450
wstETH	2000
rETH	1000
cbETH	500
LINK	0
GMX	0
PENDLE	0

Trade WETH Tier 1 Arbitrum Credit Manager parameters

It’ s proposed to add following adapters:

• Balancer
  • wstETH/WETH (0x9791d590788598535278552eecd4b211bfc790cb000000000000000000000498)
  • rETH/WETH (0xd0ec47c54ca5e20aaae4616c25c825c7f48d40690000000000000000000004ef)
  • wstETH/rETH/cbETH (0x2d6ced12420a9af5a83765a8c48be2afcd1a8feb000000000000000000000500)

minDebt	0.35
maxDebt	7
liquidationPremium	0.05
liquidationPremiumExpired	0.05

token	Proposed LT
USDC	0.87
USDC.e	0.87
WBTC	0.87
wstETH	0.9
rETH	0.9
cbETH	0.9

LT ramp start: 11 Jun 00:00 GMT LT ramp duration: 14 days

Trade WETH Tier 2 Arbitrum Credit Manager parameters

It’ s proposed to add following adapters:

• Uniswap V3:
  • WETH/USDC 0.05%
  • WETH/USDC.e 0.05%
  • WETH/WBTC 0.05%
  • WETH/ARB 0.05%
  • WETH/ARB 0.3%
  • wstETH/WETH 0.01%
  • ARB/USDC.e 0.05%
  • ARB/USDC 0.05%
  • WBTC/WETH 0.3%
• Balancer
  • wstETH/WETH (0x9791d590788598535278552eecd4b211bfc790cb000000000000000000000498)
  • rETH/WETH (0xd0ec47c54ca5e20aaae4616c25c825c7f48d40690000000000000000000004ef)
  • wstETH/rETH/cbETH (0x2d6ced12420a9af5a83765a8c48be2afcd1a8feb000000000000000000000500)

minDebt	0.35
maxDebt	7
liquidationPremium	0.05
liquidationPremiumExpired	0.05

token	New LT
USDC	0.87
USDC.e	0.87
WBTC	0.87
wstETH	0.9
rETH	0.9
cbETH	0.9
ARB	0.8

LT ramp start: 11 Jun 00:00 GMT LT ramp duration: 14 days

USDC.e market parameters

Since a new UDC pool will be launched, it is proposed to prohibit the opening of new positions in USDC.e pool. Taking this into account, it is proposed to keep current parameters for USDC.e pool.

USDC market deployment

Deploy Main USDC v3 pool with following parameters

token	minRate	maxRate	quotaIncreaseFee	limit
WETH	0.0004	0.12	1	7000000
WBTC	0.0004	0.12	1	2500000
wstETH	0.0004	0.12	1	5500000
rETH	0.0004	0.12	1	3000000
cbETH	0.0004	0.12	1	2000000
USDe	0.005	0.5	1	5000000
WETH	0.0004	0.12	1	7000000
ARB	0.0008	0.24	5	1500000
PENDLE	0.0008	0.24	5	500000

Interest Rate Model:

U1	7000
U2	9000
Rbase	0
Rslope1	100
Rslope2	125
Rslope3	10000
isBorrowingMoreU2Forbidden	TRUE

Trade USDC Tier 1 Arbitrum Credit Manager parameters

minDebt	20000
maxDebt	400000
feeInterest	0.25
feeLiquidation	0.005
liquidationPremium	0.05
feeLiquidationExpired	0.005
liquidationPremiumExpired	0.05
poolLimit	4000000

Collateral tokens:

token	Proposed LT
WETH	0.87
WBTC	0.87
wstETH	0.87
rETH	0.87
cbETH	0.87
USDe	0.9

Adapters:

• Uniswap V3:
  • WETH/USDC 0.05%
  • WETH/WBTC 0.05%
  • wstETH/WETH 0.01%
  • WBTC/WETH 0.3%
  • WBTC/USDC 0.05%
  • wstETH/USDC 0.05%
• Balancer
  • wstETH/WETH (0x9791d590788598535278552eecd4b211bfc790cb000000000000000000000498)
  • rETH/WETH (0xd0ec47c54ca5e20aaae4616c25c825c7f48d40690000000000000000000004ef)
  • wstETH/rETH/cbETH (0x2d6ced12420a9af5a83765a8c48be2afcd1a8feb000000000000000000000500)
• Curve
  • USDe/USDC (0x1c34204fcfe5314dcf53be2671c02c35db58b4e3)
• Camelot V3
  • USDe/USDC (0xc23f308CF1bFA7efFFB592920a619F00990F8D74)

Trade USDC Tier 2 Arbitrum Credit Manager parameters

minDebt	1000
maxDebt	20000
feeInterest	0.25
feeLiquidation	0.005
liquidationPremium	0.05
feeLiquidationExpired	0.005
liquidationPremiumExpired	0.05
poolLimit	2000000

Collateral tokens:

token	Proposed LT
WETH	0.87
WBTC	0.87
wstETH	0.87
rETH	0.87
cbETH	0.87
USDe	0.9
WETH	0.87
ARB	0.8
PENDLE	0.7

Adapters:

• Uniswap V3:

  • WETH/USDC 0.05%
  • WETH/WBTC 0.05%
  • wstETH/WETH 0.01%
  • WBTC/WETH 0.3%
  • WBTC/USDC 0.05%
  • wstETH/USDC 0.05%
  • PENDLE/WETH 0.3%
  • ARB/USDC 0.05%
  • WETH/ARB 0.05%
  • WETH/ARB 0.3%

• Balancer

  • wstETH/WETH (0x9791d590788598535278552eecd4b211bfc790cb000000000000000000000498)
  • rETH/WETH (0xd0ec47c54ca5e20aaae4616c25c825c7f48d40690000000000000000000004ef)
  • wstETH/rETH/cbETH (0x2d6ced12420a9af5a83765a8c48be2afcd1a8feb000000000000000000000500)

• Curve

  • USDe/USDC (0x1c34204fcfe5314dcf53be2671c02c35db58b4e3)

• Camelot V3

  • USDe/USDC (0xc23f308CF1bFA7efFFB592920a619F00990F8D74)

USDC & WETH pools farming contracts

It’s proposed to set ARB as a farming token of the new USDC pool and change WETH pool farming token to ARB for LTIPP grant distribution.

#Transaction log Transaction log can be found here, md5 checksum is 4a18cbf5e7a521cc9a969a60e99d1080.

Voting

Simple Approve/Reject