The Compound Growth Program along with the Scroll team, proposes the addition of the ETH Comet on Scroll. Addition of the ETH market will open a new avenue for users in the Scroll ecosystem to make use of their idle assets.
Motivation
Scroll’s layer-2 scaling solution provides low-cost, high-speed transactions, unlocking new possibilities for DeFi users. Integrating ETH markets on Compound within the Scroll ecosystem can drive broader adoption and deepen liquidity, enhancing user experience and network growth
Scroll’s commitment to Ethereum alignment ensures security and compatibility, offering Compound users a seamless and scalable experience. With its zkEVM architecture, Scroll brings trustless, efficient transactions that attracts a diverse user base and strengthens DeFi ecosystems across the Ethereum landscape. The Scroll Mainnet was launched on October 2023, since then Scroll has emerged as the number one zk-rollup in terms of TVL.
Point of Contact: Sharp form AlphaGrowth
Proposed Collateral
We propose adding the following asset as collaterals for the market
weETH
wrsETH
puffETH
STONE
wstETH
We invite the community to suggest and give inputs for any other collateral assets.
Next Steps
We invite the community to consider this application for listing the ETH market and welcome suggestions in this direction.
Additionally, we look forward to the community to suggest
Collateral Factor, Liquidation Factor and Liquidation Penalty
We tailor the liquidation penalty, collateral factors and liquidation factors based on parameters on mainnet WETH comet. We advise to align pufETH parameters for Scroll WETH comet with those of Mainnet WETH.
Next Steps
Welcome Community Feedback
Work with community to get asset listed on WETH Comets
From September to December 2024 STONE total supply on Scroll has nearly halved from 130K to 65K.
Supply Cap and Liquidation Penalty
Given the above liquidity and downward trending total supply data, we recommend setting liquidation penalty on the more conservative side at 5%. Assuming an exchange rate oracle for the market, supply cap can be set less conservatively at 10,000, ~15% of the current max supply on Scroll. This achieves a high degree of capital efficiency while accounting for both low risk of slashing-induced liquidation and potential of continuing total supply reduction.
Liquidation Factor (LF) and Collateral Factor (CF)
Based on the provided metrics and the proposed liquidation penalty, Gauntlet recommends setting a liquidation factor (LF) of 88% and a collateral factor (CF) of 91% for the WETH comet. These choices again aim to balance capital efficiency with risk mitigation.