Summary
Gauntlet recommends the following risk recommendations to the protocol:
- Increase WETH Arbitrum Comet’s rsETH Supply Cap from 920 to 3,500
- Increase USDT Ethereum Comet’s wstETH Supply Cap from 9,000 to 15,000
Analysis
rsETH DEX Liquidity
Concentration of rsETH on Arbitrum
Pendle holds the largest concentration of rsETH, which is encapsulated within its SY-rsETH token. Increasing the cap allows potential large borrowers to leverage rsETH to leverage WETH. The recommended supply cap represents 21% of circulating supply.
wstETH DEX Liquidity on Ethereum
Total DEX liquidity on Ethereum is $361M. Swapping 15k wstETH to USDT incurs ~4.5% slippage. There is substantial liquidity to increase the current cap on USDT.
Next Steps
- Welcome feedback from the community
- Post recommendations to on-chain proposal