MIR-20┃Add cbETH as collateral on Mimo on Ethereum

Summary:

This proposal aims to add cbETH as new collateral on Mimo on Ethereum.

Rationale:

Coinbase, Inc. is a prominent cryptocurrency trading platform in the United States. As of 2/05/2023, the company and its global affiliates had 100M+ verified users, $100B assets on platform, and offered services in 100+ countries. Coinbase is allowing customers who stake ETH to wrap it for an ERC20 utility token called Coinbase Wrapped Staked ETH (“cbETH”), which is a liquid representation of their staked-ETH.

Coinbase Wrapped Staked ETH (“cbETH”) is a utility token that represents Ethereum 2 (ETH2), which is ETH staked through Coinbase. Coinbase customers can wrap their locked staked ETH to receive cbETH, which is an asset that can be traded, moved on-chain, and used in DeFi and other dApps. cbETH is known as a liquid staking token because it allows holders to get the benefits of staking without lockups or unbonding periods.

You can learn more about these mechanisms in their documentation / whitepaper.

Once the vote is accepted on Snapshot, we will determine the associated liquidation ratio, minimal collateral ratio, debt ceiling, liquidation bonus on a second MIR discussion.

Project Presentation:

Protocol name : Coinbase ETH Token requested : cbETH Token contract address : https://etherscan.io/token/0xBe9895146f7AF43049ca1c1AE358B0541Ea49704 Audit(s) links : https://blog.openzeppelin.com/coinbase-liquid-staking-token-audit/ Chain requested : Ethereum Relation with the project : None. Website: https://www.coinbase.com/price/coinbase-wrapped-staked-eth Github: https://github.com/coinbase/wrapped-tokens-os Twitter : https://twitter.com/coinbase

Token metrics & Risk assessment:

• Smart Contract risk: D

cbETH launched on Ethereum on 25 August 2022. The code has 1 audit from OpenZeppelin. Coinbase controlled all the privileged keys such as minting/burning and the possibility to blacklist an address. cbETH has generated more than 48k transactions.

• Counterparty risk: B

As mentioned above, Coinbase controlled different privileged keys over the cbETH smartcontract. There is no DAO and cbETH isn’t permissionless. There are currently 6990 holders on Ethereum.

• Market Risk: B-

cbETH is currently ranked 2nd in the list of Ethereum Liquid Staking assets with a capitalization of $1,8B. Furthermore, the price is correlated to the ETH since cbETH is the representation of ETH staked through Coinbase. For this reason, we consider the risks of cbETH are mitigated by his principal collateralized assets: ETH. The liquidity available on Ethereum is nearly $30,4M with approximately $10M of volume per day on Ethereum.

Ethereum Staking wars : https://www.defiwars.xyz/wars/eth

• Chain Risk : A

Ethereum had 0 outages over the last 6 months. (https://etherscan.com/chart/blocks)

• Liquidity Risk of PAR on Ethereum: A

The PAR-USDC UniV3 pool has 1,68M$ in concentrated liquidity, composed of 50% PAR and 50% USDC. The PAR-USDC Curve pool has 425k$ in liquidity, composed of 52,1% PAR and 47,9% USDC at the time of writing. The MIMO-PAR Balancer pool has 310k$ in liquidity, composed of 80% MIMO and 20% PAR.

This provides the following price impact on the following trade sizes:

1000 USDC → PAR: 0.00% 10000 USDC → PAR: 0.03% 25000 USDC → PAR: 0.07% 50000 USDC → PAR: 0.14%

• Overall Risk : B

The Overall Risk is the average of the points mentioned above.

• Community size :

Twitter: 5,5M followers

Means:

• Human resources: Multisig DAO signers will need to sign and execute transactions to add cbETH as collateral on Mimo.
• Treasury resources: There is no cost for the treasury to add cbETH on Mimo Ethereum.

Technical implementation:

1. Add cbETH in the ConfigProvider Contract with all parameters decided by the Mimo governance.
2. Set the chainlink oracle related to the cbETH: cbETH/ETH + ETH/USD into PriceFeed Contract

Voting options:

• Add cbETH as new collateral on Mimo on Ethereum
• Against adding cbETH as new collateral on Mimo on Ethereum
• Abstain

Authors: @starny & @JeanBrasse from Mimo Labs

Community poll: