Summary
Gauntlet recommends the following risk recommendations to the v3 markets:
- Increase WETH Ethereum ezETH Supply Cap from 8,000 to 12,000
- Increase WETH Arbitrum weETH Supply Cap from 6,000 to 12,000
Analysis
The integration of exchange rate price LRTs allows Gauntlet to recommend more capital-efficient parameters, as these assets are shielded from market fluctuations. However, this approach does introduce exposure to tail-end risks. By utilizing exchange rate price feeds, Gauntlet is able to recommend supply caps that are not constrained by market impact or on-chain liquidity constraints, although liquidity considerations remain relevant for comprehensive risk assessment.
ezETH Review
ezETH Liquidity on Ethereum
| Dex Category | Pool address | TVL(mil) |
|---|---|---|
| balancer_ethereum | 0x596192bb6e41802428ac943d2f1476c1af25cc0e | 27.06 |
| balancer_ethereum | 0x848a5564158d84b8a8fb68ab5d004fae11619a54 | 6.90 |
| curve | 0x8c65cec3847ad99bdc02621bdbc89f2ace56934b | 3.36 |
| uniswap_v3 | 0xbe80225f09645f172b079394312220637c440a63 | 2.02 |
| curve | 0x85de3add465a219ee25e04d22c39ab027cf5c12e | 1.29 |
| uniswap_v3 | 0x1b9d58bea5ed5d935cc2e818dde1d796abff0bc0 | 0.83 |
The total TVL for ezETH on the Ethereum network is currently $41.45M. Notably, the largest liquidity pool for ezETH on Balancer, with a TVL of $27M, has a significant concentration of ezETH holdings. This concentration should be flagged to the community as a precautionary measure, given its potential impact on ezETH’s liquidity.
Balanacer Pool Composition
Top ezETH Suppliers on WETH Mainnet
The top three positions can be liquidated safely using DEX liquidity on the Ethereum Mainnet. $7.5M of ezETH can be exchanged for WETH with a slippage of 1.26%.
weETH Review
weETH Liquidity on Arbitrum
| Dex Category | Pool address | TVL(mil) |
|---|---|---|
| balancer_arbitrum | 0xcdcef9765d369954a4a936064535710f7235110a | 3.42 |
| ramses-v2 | 0x2d4bfb17db454cf582a74902c91fb09a3883a5cc | 2.83 |
| camelot-v3 | 0x293dfd996d5cd72bed712b0eeab96dbe400c0416 | 1.39 |
| uniswap_v3_arbitrum | 0xa169d1ab5c948555954d38700a6cdaa7a4e0c3a0 | 1.27 |
| pancakeswap-v3-arbitrum | 0x64dae6685725dbd0a0e63fe522c9134d0eaa7258 | 0.55 |
| traderjoe-v2-2-arbitrum | 0x2088eb5e23f24458e241430ef155d4ec05bbc9e8 | 0.16 |
| balancer_arbitrum | 0x4b3af34eb1135d59df8b9cdc2ff07d30d05334c4 | 0.13 |
| uniswap_v3_arbitrum | 0x14353445c8329df76e6f15e9ead18fa2d45a8bb6 | 0.08 |
| ramses-v2 | 0xc23f681729ad2e970c2e630cbef67edfab0c37e0 | 0.02 |
| balancer_arbitrum | 0x026a586b3fe3b3d07375b4a11a505c8b4ef07eec | 0.01 |
The total TVL for weETH on Arbitrum is $9.88M. Compound holds collateralized positions amounting to 4.1% of the circulating weETH supply on Arbitrum. This represents a relatively minor market share compared to Aave, which holds 64% of the circulating weETH supply.
Top weETH Suppliers on WETH Arbitrum
The top two positions can be safely liquidated through DEX liquidity on Mainnet. Specifically, $3.1M of weETH can be converted to WETH with an estimated slippage of 1.41%.
Next Steps
- Welcome feedback from the community
- Push recommendations to an on-chain proposallan