Do you have any data on current v3 stable eMode usage?
With only supporting USDC, DAI in eMode, how much of the current usage will be covered? - does this eMode make sense? - i think not.
Assuming this is a true summarization of usecases:
1.) Shorting/longing the Euro.
Some markets (polygon) offer stable-eMode for both EURO and USD denominated stablecoins. This was a popular way to bet against the falling EURO in H2 2022.
2.) Shorting USDT
Or more generally, people use eMode to short stables which, they view, are more likely to depeg (to the downside).
3.) Arbitrage (as mentioned earlier)
With what you(and gauntlet) propose seems like a useless eMode eliminating all use-cases.
If that’s true, does it perhaps make sense to just not have an stable eMode?
Alternatively I think it could make sense to explore:
This would require us to set a very low LT/LTV to mitigate the risk of bad debt, which is not our goal with E-mode.
The goal with eMode is to have a more attractive, but not inherently less save liquidations i’d say. This doesn’t mean it must be 96.5% LT - it just needs to be noticeable more attractive than non eMode.
Let’s assume non-eMode LT should never exceed 80%¹ - in this case a 90% LTV, and 93% LT, 1.5% Bonus(random numbers) on eMode could still be attractive, but allow including more stable assets.
¹On a side note I think it would make sense to actually to embrace a rule like that, as 86% outside eMode is imo quite risky in pools where volatile low cap coins are listed.