Title: [PRE-GIP] Decrease Supply Cap for wstETH Pool on Gearbox
Author(s): Anthias.xyz Team
Related Discussions: https://gov.gearbox.fi/t/gip-30-lm-adjustment-1/1875
Submission Date: 21 May 2023
Abstract
This is a proposal to decrease the supply cap for collateral asset wstETH on Gearbox to 50K wstETH from the current 100K wstETH supply cap. It is currently not necessary to have a high supply cap for this asset when utilization is so low.
About Anthias
Anthias is a group of builders, researchers, and governance participants from the Dartmouth Blockchain club at Dartmouth College. The Anthias team has contributed to a variety of DeFi projects on the governance and development side, most recently through grants to build risk management tooling for Aave, Euler, and Compound.
Specification
Analysis of wstETH as Collateral
wstETH is a relatively new asset. It was first launched in October 2022, so it hasn’t had as much time to gain adoption as other DeFi assets like ETH or USDC.
It does not have the demand for borrowing now that other more established assets have, so it is not necessary to incentivize its supply at this time.
Compare Supply Caps and Utilization for Top 3 Assets on Gearbox to wstETH
* wstETH
* Supplied: $67.07k
* Utilization: 0.00%
* Supply Cap: 100k wstETH
* WETH
* Supplied: $21.83M
* Utilization: 80.62%
* Supply Cap: 100K WETH
* USDC
* Supplied: $21.28M
* Utilization: 76.82%
* Supply Cap: 100M USDC
* DAI
* Supplied: $13.37M
* Utilization: 83.59%
* Supply Cap: 100M DAI
wstETH Supply Caps on Other Protocols (Supplied/Supply Cap)
* AAVE
* 199.96K/200.00K
* COMPOUND
* 18.128K/72.497K
Value at Risk
There are currently 0 active wstETH credit accounts, thus there would be no immediate Value at Risk with this change. There have only ever been 5 credit accounts borrowing wstETH on Gearbox, and they are currently all closed. The most recent wstETH credit account was last open 128 days ago.
An Alternative to Discuss
- As part of GIP-30, which was approved via Snapshot on November 13, 2022, all incentives for suppliers to the wstETH pool on Gearbox were cut. This was done as a result of the low borrowing utilization also outlined in this proposal.
- An alternative to dropping the supply cap for wstETH (and potentially, eventually eliminating this pool) would be to bring back some incentives to this pool. As part of this forum post, we would love to hear if the community would be interested in a plan closer to this instead. If this is the case, the Anthias team can model scenarios in the case of re-implementing incentives.
Conclusion
This is a proposal to decrease the supply cap for collateral asset wstETH on Gearbox to 50K wstETH from the current 100K wstETH supply cap. It is currently unnecessary to have such a high supply cap for this asset when utilization is so low. We may recommend at a later date that the protocol further decreases the wstETH supply cap in order to incentivize all wstETH suppliers to instead supply to a different pool, but we would like to gauge the community sentiment here first.
Voting
- Yes: Decrease the supply cap for wstETH to 50,000 wstETH
- No: Do not decrease the supply cap for wstETH to 50,000 wstETH
