After conducting further analysis considering the empirical correlations across rETH, cbETH, and wstETH and analyzing their differing volume and liquidity profiles, below are 3 options for the community from a purely quantitative perspective. Because e-mode has one set of LT/LTV/LB parameters for all assets included in that e-mode, the addition of any assets to e-mode impacts the entire risk profile of the e-mode.
(1) Decrease the rETH supply cap to 8k and keep the current ETH-correlated eMode parameterizations.
(2) Update the eMode parameterizations to decrease LT/LTV and increase LB.
(3) Wait until the Shanghai upgrade in March and list rETH and cbETH with the current eMode parameters.
Each option has its pros and cons.
If the community decides to hold off on e-mode for now, we are happy to provide analysis and recommendations following the Shanghai upgrade (if that is the community’s preference).
If the community decides to move forward with e-mode, we will provide more color on options 1 and 2 and the tradeoffs for the community.