Proposal Title: Integration of wstETH as Collateral in Ethos Reserve v2
Proposal Chain: Optimism
Type (Choose one): OIP
Proposal Author: A S
This proposal offers the addition of Wrapped Staked Ether (wstETH) as a new collateral type in the Ethos Reserve v2. Recognizing wstETH’s growing prominence in the DeFi space and user desires to utilize wstETH as collateral, this integration aims to enhance Ethos Reserve v2 to become the best place to drive DeFi on Optimism.
- DeFi Growth: With the increasing popularity of staking solutions for Ethereum, wstETH has emerged as a premier staking asset. Its inclusion in Ethos Reserve can attract a new segment of DeFi users to the protocol.
- Strategic Advantage: Implementing this proposal could position OATH as a forward-thinking protocol that adapts to evolving DeFi trends.
Market trends indicate a rise in wstETH usage within DeFi, suggesting its increasing demand as a valuable collateral asset. With the launch of Ethos Reserve v2, considering additional collateral options to drive increased user adoption makes sense. As wstETH has become battle tested over time, it offers a unique opportunity to push the boundary of capital efficiency and thus warrants a conversation regarding adding it as collateral on Ethos Reserve.
The development team is composed of DeFi analysts and blockchain developers with extensive experience in Ethereum-based protocols, staking mechanisms, and DeFi primitives.
Key Objectives & Success Metrics
- Objective: Successfully integrate wstETH as collateral in Ethos Reserve.
- Success Metric: Increase total value locked (TVL) in Ethos Reserve and capture at least 10% of market share of wstETH on Optimism in the first six months from initial collateral offering
Length of Engagement & Budget Breakdown
Target: Lido Finance. Potential collaboration for wstETH integration and promotion.
wstETH price fluctuations and oracle price feeds during market volatility add additional protocol risk.
Standard risks associated with integrating new assets & smart contracts into Ethos Reserve’s codebase.
Post-integration, continuous monitoring and evaluation of wstETH’s performance as collateral will be essential. Further adjustments based on community feedback, protocol performance, and market trends will be considered.