Given the significantly increased paired on-chain liquidity across various venues relative to the available on-chain supply—since the initial recommendation, as illustrated below—we recommend raising both supply and borrow caps to align with the improved liquidity conditions.
From a growth standpoint, there is substantial external demand for leveraging eBTC. Therefore, rather than immediately relying on the risk steward for incremental increases stemming from correlated debt positions, we propose an initial supply cap of 750 eBTC. This approach accounts for expected demand while maintaining directional conservatism appropriate for an asset of this nature.
Conversely, as outlined in this LRT cap reduction proposal, we recommend launching eBTC as a non-borrowable asset, similar to the approach taken with LBTC. This is based on the limited expected borrow demand and the advantages of maintaining simplicity from both a risk and technical security perspective.
Updated Specification
| Parameter | Value |
|---|---|
| Network | Ethereum |
| Isolation Mode | No |
| Borrowable | No |
| Collateral Enabled | Yes |
| Supply Cap | 750 |
| Borrow Cap | - |
| Debt Ceiling | - |
| LTV | 67% |
| LT | 72% |
| Liquidation Bonus | 10% |
| Liquidation Protocol Fee | 10% |
| Variable Base | - |
| Variable Slope1 | - |
| Variable Slope2 | - |
| Uoptimal | - |
| Reserve Factor | - |
E-mode
| Parameter | Value | Value |
|---|---|---|
| Asset | eBTC | WBTC |
| Collateral | Yes | No |
| Borrowable | No | Yes |
| Max LTV | 83% | - |
| Liquidation Threshold | 85% | - |
| Liquidation Bonus | 3.0% | - |
Disclaimer
Chaos Labs has not been compensated by any third party for publishing this recommendation.
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