Proposal for the Introduction of rETH as Collateral to Mint R
Dear Raft Community Members,
We write to propose a new form of collateral - the rETH, a liquid staking derivative from RocketPool, to be added alongside our existing collateral option, the stETH from Lido.
The introduction of rETH provides an opportunity for diversification, broadening our collateral base and thereby mitigating specific risks associated with dependency on a single type of collateral. rETH carries a significant market cap of $835 million, over $150 million liquidity in decentralized exchanges, and holds an 8% share within the liquid staking industry. These metrics suggest a robust and active market for rETH, making it a viable candidate as a new form of collateral.
We propose the following parameters for using rETH as collateral to mint R, alongside a comparison with the existing parameters for stETH:
|Minimum Collateralization Requirement||120%||120%|
|Collateral cap||uncapped||20,000 rETH|
|Collateral cap per Position||uncapped||1,000 rETH|
The conservative approach to rETH parameters, including higher borrowing/redemption fees, and the limit on maximum rETH collateral in Raft, as well as on a per-Position basis, reflects the currently lower liquidity of rETH compared to stETH. These parameters are designed to account for potential market volatility and risk.
However, we view these parameters as not static, but dynamic and adjustable according to market conditions. As the liquidity of rETH potentially increases, and its market presence becomes more robust, we could review and possibly relax these parameters.
We invite all community members to provide their feedback on this proposal. Our objective is to ensure that the integration of rETH within Raft benefits all stakeholders. We are eager to start a discussion about the potential of rETH as a collateral option and how best to incorporate it within our ecosystem.
Thank you for your time and consideration. We look forward to your insights and discussions on this important proposal.