[ARFC] Onboard tBTC to Aave v3 on Base

[FREDY]

Authors: @FREDY - Contributor and Threshold Committee member / @Ethan - tLabs Head of Business Development

Date: 2025-05-30

Summary

This proposal seeks to onboard tBTC to Aave v3 on Base following a successful launch on Mainnet (Aave - Open Source Liquidity Protocol).

As proposals for onboarding assets already onboarded in other Aave instances does not require a TEMP CHECK it is presented as an Aave Request for Comment (ARFC).

Motivation/Background

tBTC is Threshold’s decentralized and permissionless bridge to bring BTC to Ethereum, Base and 7 other chains. Users wishing to utilize their Bitcoin on Ethereum & Base can use the tBTC decentralized bridge to deposit their Bitcoin into the system and get a minted tBTC token in their EVM wallet.

Threshold Network has recently brought direct minting of tBTC to Arbitrum and Base. It is live on Aave, Compound, GMX, EigenLayer, Synthetix, Morpho, Symbiotic and has strong, sticky liquidity to support liquidations.

Following its approval on AAVE 3 Ethereum, tBTC’s initial supply cap was reached within 72 hours, prompting an increase to meet the overwhelming demand and now sits at over 2,200 BTC TVL. This rapid adoption underscores the market’s appetite for trust-minimized BTC solutions in DeFi.

tBTC on AAVE v3 Arbitrum is just lacking an AIP and has already passed on ARFC and relevant risk analysis.

tBTC on Base has a current supply of 116 BTC worth $12M at current price.

Benefits for Aave

• High User Demand, since its initial deployment on Aave’s Ethereum market, tBTC reached its initial 500 BTC supply cap within the first week. The cap has been increased multiple times, now sitting at 2200 BTC, highlighting strong user interest. Something we hope to replicate on Base.
• Easy, direct onboarding of BTC capital via Threshold’s Base direct minting.
• Further decentralization and trust minimisation in the Aave stack.
• A range of lending options for those who wish to earn yield on their BTC.
• Preferable yields on tBTC through active incentive participation, boosting Aave protocol use, fees and TVL.

Specification

Ticker: TBTC

Contract Address:
Base: 0x236aa50979D5f3De3Bd1Eeb40E81137F22ab794b

Chainlink Oracle:
Base: 0x6D75BFB5A5885f841b132198C9f0bE8c872057BF

Useful Links:

Project: https: //www.threshold.network/
Minting Dashboard: https://dashboard.threshold.network/tBTC/mint
Bridge to other Chains: Portal Token Bridge | Fast and Secure Cross-Chain Transfers
GitHub: GitHub - threshold-network/tbtc-v2: Trustlessly tokenized Bitcoin everywhere, version 2
Docs: tBTC Bitcoin Bridge | Threshold Docs
Audit: About
Immunfi Bug Bounty: Threshold Network Bug Bounties | Immunefi
Llama Risk Report: Collateral Risk Assessment: Threshold BTC (tBTC) - HackMD
Twitter: https://twitter.com/thetnetwork
Discord: Threshold Network ✜

Dune: https://dune.com/threshold/tbtc
https://dune.com/sensecapital/tbtc-liquidity

What is the link between the author of the ARFC and the Asset?

Authors are community members and contributors of Threshold DAO. Authors are not compensated to present this ARFC proposal.

Provide a brief high-level overview of the project and the token.

tBTC is a decentralized wrapped Bitcoin that is 1:1 backed by native BTC. Unlike other wrapped Bitcoins, the BTC that backs tBTC is not held by a central intermediary, but is instead held by a decentralized network of nodes using threshold cryptography.

tBTC is trust minimized and redeemable for native BTC without a centralized custodian. It can be used across the entire DeFi ecosystem.

tBTC can be used as collateral, liquidity, a store of value, and can be integrated with DeFi apps across all supported blockchains.

As with other BTC wrappers, tBTC provides cryptocurrency traders and general users with a BTC-pegged token, that can be used to generate yield whilst holding native BTC.

Explain the positioning of the token in the AAVE ecosystem. Why would it be a good borrow or collateral asset?

Adding support for tBTC on Aave v3 (Base) as an asset would allow tBTC holders to obtain a yield on their BTC and get access to stables without selling their underlying Bitcoin.

tBTC is the only way to permissionlessly borrow and lend BTC in a decentralized manner. This gives Aave direct access to the 2.2 trillion market of BTC, for which centralised competitors provide limited access to.

Provide a brief history of the project and the different components: DAO (is it live?), products (are they live?). How did it overcome some of the challenges it faced?

tBTC was launched in May 2020 as a decentralized Bitcoin bridge on Ethereum by an effort of contributors. It was developed initially by Keep Network in collaboration with Summa and was designed to use a system of bonded operators to secure BTC deposits via a random beacon and threshold cryptography.

tBTC is now developed under the Threshold Network DAO. It extensively utilises the Threshold Network’s threshold cryptography to create a secure BTC asset. tBTC is a product launched on Threshold Network, on which many other decentralized applications are being built.

Threshold Network DAO was born out of the first on-chain merger between two decentralized protocols, Keep Network and NuCypher early in 2022. The DAO has successfully operated since that time, and supports an active community of contributors that work towards building tBTC liquidity and usability.

How is tBTC currently used?

tBTC is used across a variety of chains and use cases. Some key utilities include Aave, Maker (Spark), GMX, EigenLayer, Synthetix, Morpho, Symbiotic, collateral asset for crvUSD, thUSD and solvBTC.

A comprehensible list can be found here:
https://defillama.com/yields?token=TBTC 4 & Earn yield on your Bitcoin | Linktree

Emission schedule

tBTC is one-to-one backed with real Bitcoin, meaning that there isn’t an emissions schedule, but a mint and redeem function that adjusts the supply of tBTC based on native BTC coming into and out of the system.

Token (& Protocol) permissions (minting) and upgradability. Is there a multisig? What can it do? Who are the signers?

For tBTC, wallets are created periodically based on governance. In order for the wallet to move funds, it produces signatures using a Threshold Elliptic Curve Digital Signature Algorithm, requiring 51-of-100 Signers to cooperate. The 100 signers on each wallet are chosen with our Sortition Pool, and the randomness is provided by the Random Beacon. More can be found here - Wallet Generation | Threshold Docs

The Threshold Council multisig is a 6/9 Gnosis Safe multisig with 9 unique signers that form the Threshold Network Committee. The Council has limited upgrade privileges over the smart contracts. However, those privileges do not include any custodial power over deposited BTC.

Council Multisig Ethereum Address:
0x9F6e831c8F8939DC0C830C6e492e7cEf4f9C2F5f
Council Multisig Base Address:
0x518385dd31289F1000fE6382b0C65df4d1Cd3bfC

Market data (Market Cap, 24h Volume, Volatility, Exchanges, Maturity)

Market capitalisation: $490m USD / 4,678 BTC (Ethereum) and $12M / 116 BTC (Base)
Decentralized exchange liquidity pools: https://defillama.com/yields?token=TBTC
Dashboard on Decentralized LP liquidity: https://dune.com/sensecapital/tbtc-liquidity

Social channels data (Size of communities, activity on Github)

Discord: 10,175
Twitter: 38,400
Github: 4,596 commits
Number of transactions: 2.393.648 (across all chains)
Number of token holders: 15.918 (across all chains)

Risk parameters

We suggest waiting for the feedback from risk teams for suggested parameters.

Symbol: TBTC
Base Contract Address: 0x236aa50979D5f3De3Bd1Eeb40E81137F22ab794b

Market Risk Assessment

Maximum and current market cap of the token within the last 6 months on Base.
Max: $47,046,750 or 447 BTC
Current: $12,000,000 or 116 BTC

The largest exchanges where the token is listed and its respective liquidity on Base

Aerodrome tBTC/cbBTC Concentrated pool with 8,590,951 USD TVL
Aerodrome tBTC/cbBTC Basic Stable pool with 1,926,524 USD TVL
Aerodrome tBTC/USDC pool with 706,832 USD TVL
Aerodrome tBTC/WETH pool with 555,738 USD TVL
Aerodrome tBTC/USDC pool with 462,554 USD TVL
Aerodrome tBTC/WETH pool with 408,255 USD TVL
Aerodrome tBTC-/USDbC pool with 54,398 USD TVL
Aerodrome CL200-tBTC/T pool with 45,293 USD TVL
Curve Finance tricypto tBTC/ETH/crvUSD pool with 1,260,454 USD TVL
Pancakeswap tBTC/cbBTC pool with 84,506 USD TVL
Pancakeswap tBTC/WETH pool with 12,055 USD TVL

Liquidity example with no significant price impact

Disclaimer:

This proposal is powered by Threshold Network. The authors are FREDY (Contributor and Threshold Committee member) and @Ethan (tLabs Head of Business Development)

Next Steps:

1. Since proposals for onboarding assets already onboarded in other Aave instance does not require a TEMP CHECK it can go straight to an Aave Request for Comment (ARFC).
2. Publication of this ARFC, collect community and service providers feedback before escalating the proposal to the ARFC Snapshot stage.
3. If the ARFC Snapshot outcome is positive, publish an AIP vote for final confirmation and enforcement of the proposal.

Copyright:

Copyright and related rights waived under Deed - CC0 1.0 Universal - Creative Commons

[LlamaRisk]

Summary

LlamaRisk supports onboarding tBTC to Aave V3 on Base. Our analysis indicates a similar risk profile of Base tBTC to its Arbitrum version, and we are tentatively in favor of onboarding. However, the relatively low onchain circulating supply would require a limited initial supply cap of up to 100 BTC (~$10M). Given this limited capacity, it remains unclear whether the demand would justify the DAO’s operational efforts.

Price deviations between tBTC and BTC have been observed in secondary markets (notably Aerodrome pools), at times exceeding a few percent. This highlights the need to price the asset using Chainlink’s BTC/USD feed, consistent with practices on Ethereum, to reduce the risk of manipulation. While the tBTC v2 contracts have undergone multiple audits, the Base-specific cross-chain components have not been publicly audited. The system’s reliance on permissioned Beta Stakers, Minters, and Guardians also introduces operational risks that could disrupt the minting or deposit process.

The exact risk parameters will be presented jointly with @ChaosLabs.

1. Asset Fundamental Characteristics

1.1 Asset

tBTC (Threshold Bitcoin) is an ERC-20 token backed by Bitcoin 1:1 and pegged to its price. Unlike wBTC, which relies on a centralized custodian, tBTC uses a permissioned signer group that participates in a consensus mechanism to custody the Bitcoin backing it, reducing dependence on centralized third-party custodians. On Base it is deployed at the address 0x236aa50979D5f3De3Bd1Eeb40E81137F22ab794b. As of June 3, 2025, tBTC has a circulating supply of 139 on Base, representing a market capitalization of $14.75M. The token was deployed on August 3, 2023, and does not offer any yield.

Deposits typically take 1-3 hours to be processed and credited. Withdrawals follow a similar process: the tBTC token contract burns the tBTC, and the DepositBridge transfers BTC to the user’s specified Bitcoin address. This process includes a 3-5 hour processing delay. The platform fees are action-based, with no fee for minting and a 0.2% redemption fee. The accrued tBTC fees are periodically deposited into Threshold-owned Governor Bravo Timelock Controller on the mainnet.

1.2 Architecture

tBTC is a decentralized and permissionless alternative to wrapped Bitcoin tokens, where BTC is held not by a centralized custodian but by a distributed network of Threshold node operators. Users initiate the minting process by sending BTC to a one-time-use deposit address. Once the Bitcoin is moved from the deposit address, it goes to a randomly generated wallet by Threshold stakers in Bitcoin wallets controlled by signers participating in the Threshold ECDSA, which requires 51% of 100 signers to cooperate and sign the transaction. Though the Network operates on Ethereum, signers use an off-chain communication protocol called “libp2p” to coordinate signing events. On each wallet, 100 signers are selected randomly from Keep Network’s Sortition Pool. Random Beacon securely generates random numbers and is used with Threshold Cryptography to impart bias-resistant randomness and thus distribute trust across multiple nodes.

Source: List of tBTC Guardians and Minters, Threshold

Signers are stakers of the Threshold Network’s “T” token, and selection is weighted by stake. Currently, a restricted group of Beta Stakers is used for optimistic minting to reduce signer failures, but the network aims to open access to all qualifying stakers. Guardians and Minters are permissioned roles: Minters approve BTC deposits required for tBTC minting, while Guardians can veto them, introducing centralization risk. To mitigate this, a planned “Sweeping” mechanism would allow signers to bypass Guardian approval by enabling minting from unapproved deposits every 8 hours at regular intervals.

tBTC can be supplied to Base via two methods: native minting or bridging from Ethereum:

• In native minting, users deposit BTC into Threshold’s custody on Bitcoin L1, which triggers minting of tBTC directly on Base. This mechanism is designed to allow users to obtain Base-native tBTC without the need to interact with the Ethereum L1 tBTC ledger where minting occurs. Instead, the process is handled by off-chain relayers that submit mint-related calls to the L1BitcoinDepositor contract on Ethereum. These contracts then use the Wormhole protocol to send the minted L1 tBTC to Base, where it is unwrapped into canonical Base tBTC by the BaseWormholeGateway and the L2BitcoinDepositor.
• In the bridging method, tBTC is first minted or held on Ethereum and then locked into the Wormhole bridge. The BaseWormholeRelayer plays a key role here, it unwraps the Wormhole-wrapped tBTC received from Ethereum and mints the canonical tBTC on Base. The former method is more economical as users receive tBTC directly on Base, without needing to pay Ethereum gas fees.

Redemption requires burning tBTC via the tBTC token contract, after which the BridgeRouter facilitates BTC transfer from a redemption wallet to the user’s provided Bitcoin address. Redemptions have a size limit (based on wallet capacity) and a processing delay of 3-5 hours.

1.3 Tokenomics

tBTC represents 3.4% of the total BTC wrappers supply on Ethereum. Similarly, tBTC on Base is an extension of this product, with a total supply of 139 tBTC, representing 2.73% of tBTC’s total supply (4613.6 tBTC).

1.3.1 Token Holder Concentration

Source: tBTC Top 100 Holders on Base, BaseScan, June 3, 2025

The top 5 holders of tBTC are:

• Aerodrome CLPool: 38.53% of the total supply.
• Solv Protocol: 21.05% of the total supply.
• Moonwell tBTC (mtBTC): 8.51% of the total supply.
• Aerodrome Stable AMM tBTC/cbBTC: 5.04% of the total supply.
• Curve TriCrypto Pool: 3.23% of the total supply.

The majority of existing tBTC on Base is supplied to various DEXs, which positively contributes to its liquidity. However, that makes the top 10 holders to collectively own 87.2% of the supply, resulting in a high concentration.

2. Market Risk

2.1 Liquidity

Source: tBTC/USDC Swap Liquidity, DeFiLlama, June 3, 2025

Users can swap up to 48 tBTC ($5.08M) for USDC on Base within a 7.5% price impact.

2.1.1 Liquidity Venue Concentration

Source: Top tBTC Liquidity Pools on Base by Volume, GeckoTerminal, June 3, 2025

There are numerous tBTC pools available on Base with considerable liquidity (>$100K). However most of tBTC’s liquidity is supplied by the Aerodrome tBTC/cbBTC Concentrated Stable pool ($8.73M TVL) followed by Curve tricrypto crvUSD/tBTC/ETH pool ($1.43M TVL) and Aerodrome tBTC/cbBTC Basic Stable pool ($1.35M TVL).

2.1.2 DEX LP Concentration

tBTC’s DEX liquidity on Base is moderately concentrated, primarily supplied through yield optimizers like Beefy and YO, which are incentivized with yield boosts. This introduces a low risk of liquidity decline if the incentives are removed. Below is the breakdown (as of June 3, 2025):

• Aerodrome tBTC/cbBTC Concentrated Stable: The top liquidity provider is YO Protocol, supplying 29.5% of the pool’s liquidity.
• Curve tricrypto crvUSD/tBTC/ETH: 23.7% of the pool’s liquidity is supplied by Beefy.
• Aerodrome tBTC/cbBTC Basic Stable: 70.86% of the pool’s liquidity is supplied by Beefy.

2.2 Volatility

Source: tBTC/BTC Secondary Market Rate, TradingView, June 3, 2025

The chart above shows that tBTC’s price on Base has deviated from BTC by over 5% on several occasions. Notably, the tBTC/cbBTC pool on Aerodrome Base’s most liquid tBTC pool with over $8.6M in TVL experienced a near-total de-peg at one point in October 2024. Between February 24 and March 12, 2025, this pool saw sustained periods of significant de-pegs and heightened volatility. This suggests there is high volatility in the tBTC price in comparison with cbBTC on Base.

2.3 Exchanges

Source: tBTC CEX Markets, CoinMarketCap, June 3, 2025

Kraken is the only centralized exchange listing tBTC, offering three trading pairs. As a result, its trading volume and liquidity remain significantly lower than that of decentralized exchanges, which could pose challenges for large-scale OTC trades or CEX-DEX arbitrage.

2.4 Growth

Source: tBTC Circulating Supply on Base, Dune, June 3, 2025

tBTC circulating supply on Base reached an all-time high of 447 tBTC on December 4, 2024, but since then has been in a constant decline currently at 139 tBTC, with a noticeable supply shift away from the network. This indicates unclear growth outlook for the asset on Base chain.

3. Technological Risk

The tBTC technological risk on Base, including smart contract risk, bug bounty program, and dependency risk, remain unchanged since our tBTC Arbitrum onboarding review and are excluded here for brevity, as the underlying architecture remains identical and no new contracts specific to Base chain have been deployed.

4. Counterparty Risk

4.1 Governance and Regulatory Risk

The regulatory risk has been previously discussed in detail as part of the tBTC Arbitrum onboarding review. As there have been no material changes, that assessment remains applicable here.

4.2 Access Control Risk

4.2.1 Contract Modification Options

Here are the controlling wallets:

• Multisig A: 6/9 Safe multisig, owner of all contracts listed in the architecture.

The tBTC architecture on Base is powered by the following contracts:

• tBTC: ERC20 contract for the tBTC token. It is deployed behind an ERC1967Proxy that is controlled by the Multisig A.
• BaseWormholeGateway: Wraps and unwraps Wormhole tBTC into the canonical tBTC and ensures that only authorized cross-chain transfers modify token supply. It is deployed behind an ERC1967Proxy that is controlled by the Multisig A.
• L2BitcoinDepositor: It interacts with BaseWormholeGateway to facilitate the initialization of cross-chain deposits. It is deployed behind an ERC1967Proxy that is controlled by the Multisig A.

The tBTC ERC20 contract uses a role-based access control mechanism. The owner Multisig A can manage addresses authorized to mint tBTC, control Guardian roles, halt the transfers and minting, and withdraw mistakenly sent tokens. The roles are as follows:

Role	Role Granted To
Minter	BaseWormholeGateway
Guardian	Eastban, JohnPackel, sap, Luna5

Note: The four guardians listed above are Threshold Committee members.

4.2.2 Timelock Duration and Function

Threshold Network has not configured any timelock on tBTC Base contract upgrades. A timelock functionality for critical contract upgrades should be preferred to adhere with the standard risk practices.

4.2.3 Multisig Threshold / Signer identity

All tBTC contracts on Base are owned by Threshold Council’s 6/9 Safe multisig, composed of the following elected members.

Candidate	Signer Address
Eastban	0x2844a0d6442034D3027A05635F4224d966C54fD7
MrsNuBooty	0x739730cCb2a34cc83D3e30645002C52bA4B06167
ZeroInFo56	0xe989805835093e37E6b12dCddF718e0481024573
JohnPackel	0x12107242e2FbEd0a503e102751fa6Aa8cB7446eC
nico186	0x35B46702C5d1CD36194217Fb92F72B563eFf851A
sap	0xcE3778528fC73D46685069D455bbCcE16A6e22Af
Vict0r	0xeceC507477b969FC05053fB044619b723D458E8e
wuji	0xA6d76e990fE10C4b741ceb87590bE6cb23979a6e
Wailoaloa	0xe05808c1EFe0302b27Fc21F0E4a0f15e21e62e78

Aave V3 Specific Parameters

ChaosLabs will follow-up with the aligned tBTC risk parameters shortly.

Price Feed Recommendation

Chainlink’s BTC/USD price feed should be used instead of the tBTC/USD feed to price the asset on Aave V3 Base market, as low liquidity in secondary markets makes the latter susceptible to manipulation. Additionally, we recommend implementing a trigger switch mechanism, combined with a proof-of-reserve feed (currently unavailable), to prevent bad debt, as previously discussed during tBTC’s Ethereum onboarding.

Disclaimer

This review was independently prepared by LlamaRisk, a community-led decentralized organization funded in part by the Aave DAO. LlamaRisk is not directly affiliated with the protocol(s) reviewed in this assessment and did not receive any compensation from the protocol(s) or their affiliated entities for this work.

The information provided should not be construed as legal, financial, tax, or professional advice.

[ChaosLabs]

Overview

Chaos Labs supports the listing of tBTC on the Aave Base deployment. Below is our analysis and initial recommendations.

Technical Overview

Chaos Labs has conducted extensive technical analyses on tBTC for its listings on Ethereum and Arbitrum. tBTC on Base can be natively minted, simplifying the minting and redeeming process and reducing the asset’s reliance on bridging. The tBTC contract on Base is owned by a 6-of-9 multisig, creating some centralization risk, though this is mitigated by the relatively high signature threshold.

Minting and Redeeming

Minting tBTC begins when users send BTC to a monitored wallet address associated with a randomly selected signing group. The Optimistic Minting System enables accelerated issuance through Trusted Accelerators. These entities detect deposits via SPV proofs and trigger rapid mint requests, subject to a three-hour dispute window where Guardians validate transaction finality and system integrity. Uncontested mints auto-finalize, minting tBTC while accruing debt until wallet sweeps reconcile balances. A 0.2% fee is applied, with proceeds funding the Treasury and Coverage Pool. Withdrawing tBTC back to Bitcoin follows a similar process, requiring proof of signer control over the original address before redemption occurs.

The primary Minters authorized for optimistic minting include Curve DAO, Synthetix, and ACI.

Additionally, the Threshold Network enables native minting of tBTC on Base through its relayer system, bypassing Ethereum gas costs. Users deposit BTC into Threshold-controlled wallets, triggering SPV proof generation, coordinated threshold signature collection, and atomic minting of tBTC on Base.

Bridging

Bridging tBTC between Ethereum and Base using the Wormhole bridge involves a two-step process on each side: locking or burning the token on the source chain and minting or unlocking on the destination chain. When bridging from Ethereum L1 to Base L2, the user first locks tBTC in the Wormhole Token Bridge contract on Ethereum, waits for about 15 minutes for Ethereum block finality, then submits a mint transaction on Base to receive native tBTC there. Conversely, bridging from Base back to Ethereum requires burning tBTC on Base, waiting approximately 15 minutes for Base’s block finality, and then submitting an unlock transaction on Ethereum.

Market Cap and Liquidity

Currently, the protocol holds roughly $493M in BTC, having peaked at higher levels in the past. Additionally, tBTC’s supply on Base has shown a market share drop and stagnation, representing just over 2.5% of the total tBTC supply. However, as with the Arbitrum listing, we anticipate that listing tBTC on Aave’s Base instance will drive demand for the asset.

Despite these outflows, tBTC’s on-chain liquidity has improved significantly since last year, with some of this being due to price effects, especially in its pools with cbBTC. It also has multiple pools with WETH and USDC, providing a well distributed and relatively robust liquidity profile on Base.

Volatility

In its largest pool on Base, tBTC has traded at 0.9977 relative to cbBTC for the vast majority of the past year. Crucially, there have been no persistent negative depegs beyond this point, though there have been occasional downwards spikes because of large swaps.

These price deviations can be mitigated with the use of a fundamental oracle, as is the case on other tBTC listings.

LTV, Liquidation Threshold, and Liquidation Bonus

As with tBTC currently listed on the Ethereum Core, we recommend aligning its parameters to WBTC on the same chain. As such, we recommend an LTV and LT of 73% and 78%, respectively, with the Liquidation Penalty set to 7.50%.

Supply Cap and Borrow Cap

Taking into account the asset’s on-chain liquidity, we recommend an initial supply cap of 130 tBTC.

Given the limited demand for borrowing BTC-related assets, we recommend setting the UOptimal of the asset to 45% to ensure a healthy buffer, while setting its borrow cap to 10% of the supply cap.

E-Mode

While tBTC (borrowable) is included in an E-Mode with LBTC (collateral) on Ethereum, it is currently unused, with under $10 of LBTC being used as collateral to borrow tBTC.

Because of this, we do not recommend adding an E-Mode for this asset at this time. However, should we observe that there is demand to borrow tBTC against LBTC on Base, we may recommend this in the future.

Pricing

Taking into account tBTC’s occasional price spikes and rapid mean reversion, we again recommend using the BTC/USD feed to price tBTC on Base, as was recommended on Arbitrum. This setup mitigates risks of price manipulation and protects against liquidation cascades caused by significant price fluctuations.

With a deviation threshold of just 0.1% because of minimal network transaction costs, this feed ensures accurate pricing while maintaining alignment with broader market conditions.

Recommendation

Following the above analysis, we recommend the following parameter settings:

Parameter	Value
Isolation Mode	No
Borrowable	Yes
Collateral Enabled	Yes
Supply Cap	130
Borrow Cap	13
Debt Ceiling	-
LTV	73%
LT	78%
Liquidation Bonus	7.5%
Liquidation Protocol Fee	10%
Variable Base	0%
Variable Slope1	4%
Variable Slope2	60%
Uoptimal	45%
Reserve Factor	20%
Stable Borrowing	Disabled
Flashloanable	Yes
Siloed Borrowing	No
Borrowable in Isolation	No

Disclaimer

Chaos Labs has not been compensated by any third party for publishing this recommendation.

Copyright

Copyright and related rights waived via CC0