Gauntlet’s Recommendations
This report presents Gauntlet’s recommendations for the listing of FRAX on Arbitrum Aave v3. FRAX has shown significant liquidity since its initial listing.
| Symbol | Address | Market Cap (Circulating) | ADV | # Txns | Total Wallets |
|---|---|---|---|---|---|
| FRAX | 0x17FC002b466eEc40DaE837Fc4bE5c67993ddBd6F | $1B | $6M | 9,692 | 441,876 |
Given the ample liquidity, we propose listing FRAX as a collateral asset.
LTV, LT, LB, Liquidation Protocol Fee, IR
In line with the parameters of assets with a similar risk profile set on Aave v3, we recommend the following values:
Parameters
| Parameter | Recommendation |
|---|---|
| LTV | 75% |
| LT | 80% |
| Liquidation Bonus (LB) | 5% |
| Liquidation Protocol Fee | 10% |
| Uoptimal | 0.80 |
| Variable Base | 0 |
| Variable Slope 1 | 0.04 |
| Variable Slope 2 | 0.75 |
| Stable Slope 1 | 0.04 |
| Stable Slope 2 | 0.75 |
| Base Stable Rate Offset | 0.05 |
| Stable Rate Excess Offset | 0.08 |
| Optimal Stable to Total Debt Ratio | 0.20 |
| Reserve Factor | 10% |
Additional Recommendations
Following Gauntlet’s Isolation Mode Methodology, we propose listing FRAX in isolation mode with a debt ceiling of $3M.
Furthermore, according to our eMode recommendations, we advise listing FRAX in the Stablecoins eMode category on Arbitrum Aave v3.
Initial Supply and Borrow Caps
We use the lower of the conservative and aggressive recommendations generated under Gauntlet’s Borrow and Supply Cap Methodology.
| Cap | Conservative | Aggressive |
|---|---|---|
| Supply | 10M | 15M |
| Borrow | 6M | 9M |
The recommended supply caps are limited by the circulating supply, while the recommended borrow caps are limited by the top wallets.
Summary
Using our conservative recommendations where applicable, we propose the following parameters for the new asset listing:
| Parameter | Recommendation |
|---|---|
| Isolation Mode | YES |
| Borrowable | YES |
| Collateral Enabled | YES |
| Supply Cap (FRAX) | 10M |
| Borrow Cap (FRAX) | 6M |
| Debt Ceiling | $3M |
| LTV | 75% |
| LT | 80% |
| Liquidation Bonus | 5% |
| Liquidation Protocol Fee | 10% |
| Reserve Factor | 10% |
| Variable Base | 0.00% |
| Variable Slope 1 | 4.00% |
| Variable Slope 2 | 75.00% |
| Uoptimal | 80.00% |
| Stable Slope 1 | 4.00% |
| Stable Slope 2 | 75.00% |
| Base Stable Rate Offset | 5.00% |
| Stable Rate Excess Offset | 8.00% |
| Optimal Stable to Total Debt Ratio | 20.00% |