RFP-20: Addition of wbETH as a Lend/Borrow Market to Arbitrum

Abstract

RFP-20 proposes the integration of wbETH (Wrapped Beacon ETH) as a full collateral and borrow market within the BNB Smart Chain deployment of Radiant Capital.

Motivation

Radiant Capital aims to provide a decentralized platform for lending and borrowing cryptocurrencies, offering users an efficient and secure means to access financing and generate yields. As the DeFi market evolves, it is essential to expand the platform's offerings by incorporating new, high-quality assets as collateral and borrowing options.

Wrapped Beacon Ethereum (wbETH) represents a liquid staking derivative token that mirrors the value of staked ETH and its associated rewards. This token is created by Binance Earn, providing users with the opportunity to participate in ETH staking rewards from the Ethereum network. Wrapped tokens, such as wbETH, enable the utilization of cryptocurrencies on different blockchains while remaining backed by the underlying asset.

To learn more about wbETH, please visit the following link.

To learn more about Binance ETH Staking, visit the following link.

The objective of this governance proposal is to seek approval for the integration of wbETH as an accepted form of collateral and as a borrow market within the Binance Smart Chain deployment of Radiant Capital. This expansion aligns with Radiant Capital's vision of offering a comprehensive and diverse set of assets to its users.

The Risk Committee has evaluated wbETH and recommended the parameters for its integration into the platform, which will be outlined below.

Key Terms

• wbETH - Wrapped Beacon Ethereum from Binance

• Max LTV - The Maximum LTV ratio represents the maximum borrowing power of a specific collateral. For example, if a collateral has an LTV of 75%, the user can borrow up to 0.75 worth of ETH in the principal currency for every 1 ETH worth of collateral.

• Liquidation Threshold - This represents the threshold at which a borrow position will be considered undercollateralized and subject to liquidation for each collateral. For example, if a collateral has a liquidation threshold of 80%, it means that the position will be liquidated when the debt value is worth 80% of the collateral value.

Specifications

• Add wbETH as a full collateral and borrow market

• Max LTV: 70%

• Liquidation Threshold: 80%

• Scale allocation points (incentive emissions) for lend and borrow markets as deposits grow for a two-week period, at which point AP will be stabilized

Steps to Implement

• Chainlink Integration: In order to list wbETH, the integration of a Chainlink feed for the wbETH/bETH exchange ratio is necessary. This feed will provide accurate and real-time exchange rate data for the wbETH token. A similar implementation can be observed on Arbitrum through the following link: Chainlink Arbitrum Feed.

• Alternative: The Radiant team is actively engaging with both Chainlink and Binance teams to explore an alternative workaround option. This solution involves utilizing the bETH/ETH-USD ratio for determining the wbETH exchange rate. Discussions are ongoing to ensure the availability of reliable and accurate exchange rate data for wbETH.

• Smart Contract Implementation: Based on the defined parameters, the Radiant team will implement the necessary updates to enable the integration of wbETH as a collateral and borrow market with parameters as laid out above. This implementation will involve coding and testing the smart contracts to ensure their functionality and security.

• User Interface Update: The Radiant Capital user interface will be updated to reflect the addition of wbETH as a collateral and borrow market. This includes providing users with the option to select wbETH as collateral and borrow assets, as well as displaying relevant information such as wbETH exchange rates, available loan options, and associated risks.

Overall Cost/Impact

Minimal.

Timeline

Integration is expected to occur swiftly, subject to the following stages:

• Local Testing: The Radiant team will conduct thorough testing of the implementation in a local environment to ensure its functionality, security, and compatibility with the BNB Smart Chain ecosystem.

• Staging: Following Chainlink Feed integration, the implementation will proceed to a staging phase, where further testing to verify the integrity and functionality of the wbETH collateral and borrow market will take place.

Voting

• In Favor: Supportive of RFP-20, adding wbETH to the Binance Smart Chain deployment of Radiant
• Against: Against implementation of the RFP-20 proposal
• Abstain: Undecided, but contributing to quorum