[ARFC] Increase Supply and Borrow Caps for weETH on Base

Governance
1

[ARFC] Increase Supply and Borrow Caps for weETH on Base

Title: [ARFC] Increase Supply Cap for weETH on Base

Date: 2024-07-13

Author: @ACI

Summary

This is a straight-to-AIP proposal to raise the supply caps for weETH on Base to accommodate growing demand and participate in Superchain rewards programs.

Motivation

weETH has been consistently hitting its current supply cap across networks, often immediately after risk steward raises caps.

We propose this ARFC to increase the supply caps, which will bring in in line with market demand and allow new depositors to participate in OP rewards from Optimism’s Superfest program.

Specification

Supply cap for weETH on Aave V3 Base will be increased to 20,000 weETH. The borrow cap will be increased to 9,000 weETH.

Disclaimer

The ACI is not presenting this ARFC on behalf of any third party and is not compensated for creating this ARFC.

The ACI is a delegate of Ether.Fi and members hold eETH.

Next Steps

  1. If consensus is reached on this [ARFC Addendum], escalate this proposal to AIP stage.

Copyright

Copyright and related rights waived via CC0.

2 Likes
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@ChaosLabs @LlamaRisk would you please be able to confirm before we vote that this proposed increase in supply cap is appropriate from a risk perspective?

2 Likes
3

The implementation of this ARFC has completely altered the Base market, spiking borrow costs across the board and leaving zero borrowable assets at the time of this post. Likewise, there is a “resting” (100% fill) borrow APR which is causing significant loss of principle.

Is there a remedy that can be put in place here ASAP to resolve this? It certainly seems that this proposal was not adequately planned out, especially related to the additional markets (cbETH, wstETH) where there is not as quick of a recovery in the market rates.

1 Like
4

this is the most (redacted) proposal I have seen in Aave.

From small 2k increases, 300-700 borrow WEETH increases, to 16k lend and 8k increase in borrow. Whoever proposed this needs to be fired for either bad faith or negligence. To make things worse, it is implemented on a Sunday evening???

People has to be compensated.

And whoever proposed this needs to be fired as soon as possible.

6

also, the super fest

The bonus was 10% APR at 1k borrowed WEETH.

At 9k, the weeth borrowed bonus is 1% but with a -53% APR even at full 20k weeth lent.

You wanted to max extract from the super fest. Well enjoy your fest at -52% borrow rate.

7

This has destroyed base markets, nothing available to borrow. The worse thing is releasing this on a Sunday is suspicious.
Can someone respond why Sunday night was chosen ?

1 Like
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