Proposal: Support wstETH as collateral on Venus on ETH Mainnet

Summary

A proposal was published on the Community Forum to add support for both stETH and wstETH but due to stETH being a rebasing token, that could increase the complexity and it would require a deep analysis to check implications on liquidations, rewards, etc and further delay deployment.

For this reason, we are proposing to add support for Lido’s wstETH market only at this time on ETH mainnet.

Rationale

wstETH is a well-established and widely recognized token in the decentralized finance (DeFi) ecosystem.

wstETH is a wrapped version of stETH. It’s more composable with DeFi protocols.

Motivations

By integrating wstETH into its markets, Venus Protocol would allow its users to earn lending APY on their staked ETH holdings, loop yield vs ETH and borrow other assets like stables for their daily operations. Furthermore, supporting these tokens would also enhance Venus Protocol’s overall liquidity and trading volume.

Conclusion

Adding support for wstETH tokens on Venus Protocol would provide users with access to a wider range of investment opportunities, enable them to earn lending APYs on top of staking rewards on Ethereum, and enhance the liquidity and trading volume on the platform.