ARC Proposal: Onboarding sfrxETH from Frax Protocol to Aave V3 Ethereum Market

Chaos Labs supports adding sfraxETH due to the token’s low counter-party risk and decentralized nature. Considering the recent recommendations for other LSDs, such as cbETH and rETH, we believe the same parameters could be applied in this case.

We support the suggested supply cap of 5K. It reflects the differences in market cap and liquidity compared to the recommendations for cbETH and rETH (10K) while taking into account the ability to unstake to frxETH and the deep liquidity for frxETH on Curve.

Symbol Isolation Mode Borrowable Collateral Enabled LTV LT LB RF LPF Debt Ceiling Supply Cap Borrow Cap
sfraxETH NO NO YES 67% 74% 7.5% N/A 0.10 N/A 5K N/A
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