Chaos Labs Launch Parameter Recommendations
Chaos Labs supports listing WETH, USDC, and WMATIC as the initial assets on the proposed deployment on Polygon zkEVM. Launching these assets on a new deployment will help ensure a smooth and successful debut while minimizing risk. Additionally, these assets are widely used in the DeFi space, making them a reliable choice for early adoption on the zkEVM L2 network.
Following the guidelines of our approach to start with the battle-tested parameters of V3, we begin with a baseline of LT, LTV, Liquidation Penalty, and IR Curves similar to the values set today for WETH and USDC on Ethereum V3 and WMATIC on Polygon V3.
For the initial supply and borrow caps, following the same principles as our recommendations for launching new assets and introducing Aave on other new deployments, we suggest setting the supply cap at 2x the liquidity level available under the Liquidation Penalty price impact for each asset, and the borrow cap as (supply cap* UOptimal). These caps will be optimized via Risk Steward after observing usage on the new deployment and considering market and liquidity conditions.
Recommended Initial Parameters
| Risk Parameter | WETH | USDC | WMATIC |
|---|---|---|---|
| Isolation Mode | NO | NO | NO |
| Enable Borrow | YES | YES | YES |
| Borrowable in Isolation | NO | YES | NO |
| Enable Collateral | YES | YES | YES |
| Loan To Value | 80% | 77% | 68% |
| Liquidation Threshold | 82.5% | 80% | 73% |
| Liquidation Bonus | 5% | 5% | 10% |
| Reserve Factor | 15% | 10% | 20% |
| Liquidation Protocol Fee | 10% | 10% | 10% |
| Borrow Cap | 280 | 1.26M | 375K |
| Supply Cap | 350 | 1.4M | 500K |
| Debt Ceiling | N/A | N/A | N/A |
| Base | 1% | 0% | 0% |
| Slope1 | 3.8% | 4% | 6.1% |
| Uoptimal | 80% | 90% | 75% |
| Slope2 | 80% | 60% | 100% |