We appreciate the ongoing discussions around the upcoming vote and the options presented. We would like to emphasize a few points that are important for an effective governance process and informed decision-making:
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We believe that the real value in this proposal and community discussion is related to the mechanism and definition of the E-Modes. Therefore, we recommend limiting the options in the upcoming Snapshot to focus on the following questions, without specific supply cap recommendations:
a. Should we implement separate caps for E-Mode?
b. Should we have single LSD-BASE pools or include all LSDS in the same pool?
c. Should there be no borrowing outside of e-mode? -
We recommend not incorporating supply cap updates in this proposal. Instead, we propose addressing cap updates on a more granular, asset-by-asset basis, considering individual factors such as Oracle calculation, redeemability mechanisms, asset utilization and more. Examples for these can be found in current governance proposals such as MaticX, stMATIC and Chaos Labs Supply and Borrow Cap Updates.
- Additionally, if the community opts for options requiring protocol developments, the presented caps will anyways need to be updated to reflect the market conditions at the time of completion.
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We have some concerns regarding Gauntlet’s recommended caps:
a. The “Aggressive” option effectively freezes stMATIC, MaticX, and sAVAX. According to our methodology and recommendations, we do not think this is neccesary. Furthermore, for wstETH and rETH on Ethereum, the current caps are sufficient to handle new supply. Gradual increases while tracking utilization seem to be a better option, as is the current process.
b. The “Conservative” option effectively freezes all future supply for all assets on the list except wstETH and rETH on Ethereum, which will impede the growth of the protocol. @Pauljlei could you please explain why this is Gauntlet’s current recommendation?
this is contrary to the comment here:
To summarize, we stand firm with our previous comments and recommendations.