Add wstETH/DAI Markets

Simple Summary:

The Knox Finance team proposes the addition of a staked ETH(wstETH) market on arbitrum. The market serves the following purposes. 1.) It allows Premia LPs to earn yield while their assets are idle as well as while in use. 2.) It allows potential arbitrage between the ETH and wstETH pool creating a more efficient market 2.) It allows Premia and Knox finance to tap into the Lido community(marketing, liquidity mining programs, future integrations).

Abstract

This proposal is to garner support for adding a new options market for wstETH. wstETH is a liquid staked ETH product managed by Lido. wstETH (or wrapped staked-ETH is the non-rebasing version of the stETH (staked-ETH) product. Currently both stETH and wstETH are exclusively on mainnet but in the coming weeks and months wstETH will be bridged to L2 chains like Arbitrum.

Specification and Implementation:

Arbitrum: Launch wstETH/DAI pools on Arbitrum when Chainlink price feed is made available. This will allow Premia to create a market from zero liquidity. Previous proposals have stated the data collection required for surface creation takes approximately a week.

(Optional) Mainnet: Launch wstETH/DAI on mainnet immediately. The appropriate price feeds are available via Chainlink. Chainlink Price Feeds below:
https://data.chain.link/ethereum/mainnet/crypto-usd/steth-usd

Motivation

Lido is the biggest and most liquid staked ETH derivative. The creation of a wstETH/DAI market allows for a variety of opportunities to be accessed.

Furthermore, the Lido core team encourages these connections and can supports integrations with marketing/publicity efforts. Moreover, by being an initial use case for wstETH on arbitrum Premia and Knox finance have the opportunity to gain a significant portion of the wstETH market share on arbitrum.

Finally, the Lido community is discussing a new liquidity mining(LM) program for the launch of wstETH on L2s. Combining Lido’s LM program with Premia’s LM program creates opportunity for increased adoption for the pool.

Voting Options:

• 1.) Approve the addition of stETH market on arbitrum when Chainlink oracles become available
• 2.) Approve the creation of a stETH/DAI market on Mainnet now and Arbitrum when Chainlink oracles become available
• 3.) Do not approve the addition stETH/DAI market

As stated above this proposal is to garner support for a stETH/DAI market. If the community approves the addition of stETH/DAI pool, an additional proposal will be made to determine potential change in emission to pools.