March 2023
Overview
This update highlights the past month’s activities and proposals and shares our planned work.
Highlights
- USDC depeg - following the USDC depeg, the Chaos team started a “war room” to monitor and analyze the markets while providing community recommendations to mitigate risk. The summary of events can be found in our blog post.
- We published our evaluation of the stablecoin e-Mode category. In this analysis, we examined several alternatives to mitigating future shortfalls due to stablecoin depegs while examining their impact on risk and protocol reward.
- GHO
- Provided our analysis and recommendations for the GHO genesis parameters, including bucket capacity, borrowing rates, and target DEX liquidity figures.
- Launched the GHO Risk Monitoring Dashboard. This new dashboard, currently supporting the Goerli test net version of GHO, provides real-time monitoring of the stablecoin and allows users and developers to dive deep into GHO data and usage. For more details and product run-through, please read our dedicated blog post.
- We are constantly iterating and improving the Chaos Risk Monitoring Platform and have added support for Ethereum V2 data and analytics. In addition, we added support for Optimism on the Chaos Labs Parameter Recommendation Platform.
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We published our E-Mode Methodology. In the methodology, we analyze two key properties as a requirement for E-mode assets: Pairwise prices must (1) be historically mean reverting and (2) they must mean-revert fast. The full paper can be found here.
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Published our Isolation Mode Methodology. We have adopted a stress-testing
framework to recommend debt ceilings for isolated assets and utilize this methodology in our recommendations for new asset listings. The full paper can be found here. -
We provided our recommendations on the V2 → V3 migration process. Chaos views this as an iterative process while evaluating individual use cases and taking appropriate actions accordingly. The full post can be found here.
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Eight proposals were published (listed below) across V2 and V3 deployments for risk parameter updates and risk mitigation.
- Supply/Borrow Cap Updates V3 Arbitrum, Optimism, Polygon - a proposal to update supply and borrow caps for (1) V3 stablecoins that have excessive supply caps set and/or have no set borrow cap and (2) V3 assets that have reached over 75% utilization of either cap.
- Risk Parameter Updates for MKR - Aave V2 Ethereum - a proposal to reduce the viability of different attack vectors on V2 assets.
- Risk Parameter Updates - Aave V3 Arbitrum - a proposal to increase LTVs and LTs for WBTC, WETH, USDC, and DAI on V3 Arbitrum.
- Disable agEUR borrows on Aave v3 Polygon a proposal to disable borrows of agEUR on the Aave V3 Polygon market, following the depeg event due to the Euler hack.
- Supply and Borrow Caps Update - LUSD - v3 Ethereum - A proposal to increase the LUSD supply and borrow caps.
- Supply/Borrow Cap Updates V3 Polygon and Arbitrum - a proposal to adjust supply and borrow caps across several assets.
- Freeze DPI on V2 Ethereum - a proposal to freeze DPI on the Aave V2 Ethereum market.
- Configure Isolation Mode Borrowable Assets - V3 Ethereum - a proposal to enable all stablecoins listed on V3 Ethereum as borrowable in isolation mode.
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Provided analysis and supported the following proposals:
- Activate emode for cbETH Aave Ethereum V3
- Add LUSD to Optimism V3 Market
- GHST Polygon V3 “Soft Freeze”
- MaticX SupplyCap Increase Polygon v3
- Add support for LDO on Ethereum v3
- Increase cbETH Supply Cap
- Add support for LDO on Ethereum v3
- Add MKR to Ethereum
- Add YFI to Ethereum v3
- Add SNX to Ethereum v3
- Add UNI to Ethereum v3
- Add GMX to Arbitrum v3
What’s Next
In the coming month, the Chaos team will focus on the following few areas:
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Community plan for V2 → V3 migration is based on the principles laid here
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Continuous optimization of risk parameters on V3 deployments
- Integrate and support V3 Polygon into the Chaos Labs Parameter Recommendation Platform.
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New features on the Chaos Risk Monitoring Platform to improve community engagement.
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Analysis and parameter recommendations for new assets and markets.
Current WIP: