We would like to propose on addition of a wsuperOETHb market to the Compound V3 stablecoin markets for USDC and USDS.
Token Asset Name
Wrapped Super OETH (wsuperOETHb)
Specification
wsuperOETHb is already well supported on Compound V3 via the Base Ethereum market. This is beneficial for leverage looping the underlying superOETH yields, but not for taking a long position on the price of ETH, since ETH-based assets are both the collateral and the borrow token. I am proposing to onboard wsuperOETHb alongside the other supported LSTs and crypto assets on the Base USDC market, and as the first Ethereum LST on the Base USDS market.
Adding support for wsuperOETHb to these markets would lead to additional increased TVL for Compound, additional revenue to the Compound Protocol and DAO from active loans and liquidations, and will attract a wider user base for users looking to take a long position on ETH using Compound.
[Gauntlet] wsuperOETHb Risk Recommendations for Base USDC & USDS Comets
Simple Summary
wsuperOETHb is already supported and listed on the Base WETH Comet. If the community wishes to proceed listing it on the Base USDC and USDS Comets, Gauntlet recommends the following risk parameters:
Given the observed slippage of around one percent, Gauntlet recommends setting both supply caps to 2,000 wsuperOETHb. This enables the entire supply cap to be liquidated with slippage well under the liquidation penalty.
CF/LF/LP
Gauntlet recommends aligning the CF, LF, and LP for the USDC Comet and USDs Comet to the other WETH derivatives currently listed on these Comets.
Add wsuperOETHb as collateral into cUSDCv3 on Base
Proposal summary
WOOF! proposes to add wsuperOETHb into cUSDCv3 on Base network. This proposal takes the governance steps recommended and necessary to update a Compound III USDC market on Base. Simulations have confirmed the market’s readiness, as much as possible, using the Comet scenario suite. The new parameters include setting the risk parameters based off of the recommendations from Gauntlet.
The first proposal action adds wsuperOETHb to the USDC Comet on Base. This sends the encoded ‘addAsset’ and ‘deployAndUpgradeTo’ calls across the bridge to the governance receiver on Base.
Add wsuperOETHb as collateral into cUSDSv3 on Base
Proposal summary
WOOF! proposes to add wsuperOETHb into cUSDSv3 on Base network. This proposal takes the governance steps recommended and necessary to update a Compound III USDS market on Base. Simulations have confirmed the market’s readiness, as much as possible, using the Comet scenario suite. The new parameters include setting the risk parameters based off of the recommendations from Gauntlet.
The first proposal action adds wsuperOETHb to the USDS Comet on Base. This sends the encoded ‘addAsset’ and ‘deployAndUpgradeTo’ calls across the bridge to the governance receiver on Base.
Hi @pete. The listing for stablecoin markets on Mainnet is temporarily paused. wOETH is listed on the ETH Mainnet market but has not traction. We would like to see any inflow to move forward.
I felt it prudent to explain my “no” votes on these listings. I’m supportive of every aspect of the proposal except the supply caps.
It seems to me like Gauntlet’s methodology for assessing collateral asset liquidity is flawed here by ignoring correlation between liquidation events across markets. Perhaps the expectation is that Compound would not list assets that carry any meaningful risk of depegging, which is a fair position to take. However, if the need somehow arose to absorb all wsuperOETHb collateral in the USDS market, the same underlying event could easily also trigger such a need in the USDC and ETH markets. One only need look at the situation with deUSD and sdeUSD where absorptions were triggered on the USDC and USDT markets simultaneously.
Should supply caps not be set to account for this reality? If the supply cap is set for the USDC and USDS markets at 2000 wsuperOETHb each, then together with the 2000 wsuperOETHb supply cap on the Base ETH market, Compound could in theory need to absorb 6000 wsuperOETHb in short order to avoid bad debt. The available wsuperOETHb liquidity on Base is inadequate (slippage on the cited Base Curve pool greatly in excess of the liquidation penalty just to swap for ETH).
I would support a proposal that reduces the supply cap for wsuperOETHb on the ETH market to 1000 and lists wsuperOETHb on USDC and USDS markets with supply caps of 500 each.
Hi @allthecolors, appreciate your transparency on why you’re voting against. It appears no LSTs or LRTs currently supported on Base are capable of a swap for 6000 WETH:
superOETH is actually in the best position slippage-wise for a 6000 WETH swap by returning 4581.543 WETH. superOETH is also the only Base ETH LST that is secured through merkle proofs, thanks to the recent upgrade to OETH that makes up most of the backing of superOETH.
Redemptions are also always available 1:1 through the superOETH dapp:
Hi everyone. @allthecolors was the only delegate who raised concerns about the Elixir listing. As a responsible delegate and vendor, we cannot ignore the input about wsuperOETHb listing.
After consulting with Gauntlet, we agreed that the caps need to be revisited. Because of this, we decided to cancel the proposal to list wsuperOETHb until the updated caps are published.
We understand that onboarding wsuperOETHb has already taken significant time and effort. Once the new caps are finalized, we will prioritize this listing immediately.
I would just like to make sure my comment above on LRT/LST slippage does not go ignored here. If Gauntlet is revisiting the caps for wsuperOETHb, shouldn’t all the LRT/LST caps need to be revisited?
