Author

Chaos Labs

Overview

Chaos Labs recommends increasing the Quota Limit on Gearbox for the following assets:

• rstETH on wstETH Pool

This recommendation was made utilizing our Quota Limit methodology.

Motivation

rstETH has exhibited a consistent growth trend over the past three months and has now reached 100% of its quota limit.

rstETH’s supply has declined over the past three months and currently stands at 26.5K as of the time of writing. Nevertheless, the current supply level still provides sufficient room to support an increase in the supply cap.

The majority of rstETH’s supply is concentrated in the wstETH/rstETH Liquidity Pool on Balancer, which currently holds a TVL of $2.7M.

In an effort to enhance protocol protection and enable deterministic safeguards against adverse scenarios, the native protocol has secured substantial liquidation commitments within the market (>6K). If triggered, these commitments would cyclically offload outstanding wstETH debt and acquire the corresponding rstETH collateral—adhering to Symbiotic’s non-atomic restaking withdrawal duration of two weeks—ultimately retrieving the underlying debt asset (wstETH) and reverting entity exposure to neutrality. In light of these significant safeguards, Chaos Labs supports a substantial increase in the quota limit to 20,000.

Specification

Pool	Asset	Recommended Quota Limit
wstETH v3	rstETH	20,000

Txn log

Txn log can be found here Md5 checksum is d2f66df7029a5ea54d7cd2975fbb515f

Execution

It's proposed to sign the txn listed above by the Technical Multisig as soon as the quorum is gathered (contingent on winning choice being "For"). Txn will be timelocked for 36 hours to be executed contingent on the actual result of the vote after it ends.

This structure is proposed to be able to execute the increase earlier.