[OGP-DRAFT] Integration of sfrxETH as Collateral on Ethos Reserve v2

Governance Proposals
1

Proposal Title: Integration of sfrxETH as Collateral on Ethos Reserve v2
Proposal Chain: Optimism
Proposal Author: Nader Ghazvini
Date: 01/11/2024

Executive Summary

This proposal seeks to expand the Ethos Reserve v2’s collateral options by adding Frax Finance’s sfrxETH. This integration is aimed at leveraging the growing prominence of both Ethos Reserve and Frax Finance as linchpins of the Optimism DeFi ecosystem to push the boundaries of capital efficiency.

Proposal Motivation:

The popularity of staking solutions for Ethereum has led to the emergence of assets like sfrxETH as premier staking assets. Its inclusion can attract a broader segment of DeFi users and give sfrxETH holders additional ways to utilize their assets.

Proposal Specifics:

Market trends indicate a rise in the usage of liquid staking derivatives within DeFi, suggesting their increasing demand as valuable collateral assets. With Ethos Reserve v2’s integration, it is opportune to consider these additional collateral options to drive user adoption and increase capital efficiency. Initially, deposit caps will be used to ensure minimized risk to the protocol. Over time, as the market demonstrates the demand for sfrxETH and protocol performance can be monitored to ensure it acts as intended, deposit caps can be increased.

sfrxETH Collateral Details:

Deposit Cap: 300
CCR: 135%
MCR: 110%

Team Experience

The development team, consisting of DeFi analysts and blockchain developers, has extensive experience in Ethereum-based protocols, staking mechanisms, DeFi primitives, and innovative assets like those offered by Frax Finance.

Key Objectives & Success Metrics

Objective: Successfully integrate sfrxETH as collateral in Ethos Reserve.

Success Metric: Capture at least 10% market share of sfrxETH on Optimism within the first six months post initial collateral offering.

Length of Engagement & Budget Breakdown

N/A

Partnerships

Identify collaboration opportunities with Frax Finance on Optimism to drive usage of sfrxETH in Ethos Reserve.

Risk Assessment

Price fluctuations of a sfrxETH oracle price feed during market volatility could add additional protocol risk.

Standard risks associated with integrating new assets & smart contracts into Ethos Reserve’s codebase.

Additional Details

Post-integration, continuous monitoring, and evaluation of sfrxETH performance as collateral will be essential. Deposit cap adjustments based on community feedback, protocol performance, and market trends will be considered.

References/Useful links

7 Likes
2

sfrxETH product offers some of the highest yield among the liquid staking derivatives, this should make the leverage through Ethos quite competitive especially as liquidity continues to scale in on Optimism.

Thanks to the FRAX team for considering Ethos as an additional utility to their staked Ethereum.

4 Likes
3

Extremely bullish on sfrxETH making it into Ethos.
A super competitive product with high conviction holders who can enjoy borrowing ERN 0 interest.
This is a home-run YES for me!

4

I also mark it ready for GPRC review given the similar approach to wstETH that is proving successful

5

Easy Peasy. Fully support.

2 Likes
6

Easy. LFG!!

7

Easily a yes. Maybe one day FXS?

8

I’ve been a big fan of sfrxETH since I first learned about it. This would be a great asset for for Ethos to leverage and I fully support the proposal!

9

Totally support. also highly suggest reaching out to the flywheel podcast focus when you’re ready to launch. They’re a great resource to mobilize the frax community

10

Ready for GPRC from my pov.

11

this would be an awesome contribution to the already expanding ethos eco. All for it.

12

Yes 100% LFG

13

sfrxETH is probably the best LST we could add after wstETH. Not only is it one of the better yielding ones, we can target the Frax Community and expand our reach with this integration.
Let’s gooo.

14

Who can say no to this kind of proposal? It’s a TRIPLE YES from me. Send it!

15

Definitely a yes, sounds like the logical next step after wstETH.

16

When this says Ethos V2 does it not mean V2.1?

17

Correct, I will update it when we go live on Snapshot

18

I am marking this ready for GPRC review. Very excited to move forward with sfrxETH

1 Like
19
  • sfrxETH would be a great addition to the existing CR types - diversification wise and esp. as 2nd LST. On top of that it comes with its own bridge.

would love to vote ‘YES’ - bring it on.

20

I am glad to see proposals that include great teams like Frax. Easy yes from me. Excited for what the team will bring on 2024.

1 Like