0xf7444f7b7396b7e1f20835dcf6e96cae540c5288fb15796ba8f9a4cf89cc0d59

Transaction

Succeeded
(
20377562
)
Ethereum
propose
Txn fee 0.0052407418 ETH
INV
+$207.85
ETH
+$2.28
ETH
-$13.68
INV
-$207.85
  • 0
    CALL
    639912 gas [RECV] Inverse Governor Mills.propose (targets=[2 elements], values=[2 elements], signatures=[2 elements], calldatas=[2 elements], description=# Proposal to Increase wstETH Market’s Supply Ceiling and FiRM Global Supply Ceiling Forum Link: https://forum.inverse.finance/t/proposal-to-increase-wsteth-markets-supply-ceiling-and-firm-global-supply-ceiling/440 #### Summary This proposal seeks to increase the supply ceiling of FiRM’s wstETH market to 50,000,000 DOLA and to expand the FiRM global supply ceiling from 50,000,000 DOLA to 100,000,000 DOLA. #### Background As part of our ongoing efforts to enhance FiRM's attractiveness as a lending platform, the Risk Working Group periodically advises on proposed adjustments to market parameters. These adjustments, which may include changes to supply ceilings, daily borrow limits, and liquidation factors, are meticulously evaluated by the RWG. The goal is to strike a balance between attracting new users and maintaining the platform's stability and security. The wstETH market has proven to be highly popular, reaching its supply ceiling of 10,000,000 DOLA. To accommodate growing demand and maintain FiRM's competitiveness, it is necessary to further increase this ceiling. Simultaneously, the overall growth of the FiRM platform necessitates an increase in the global supply ceiling to ensure adequate capacity for all markets. #### Risk Assessment The "blue chip" nature of wstETH adds confidence to our proposed parameter adjustments. wstETH is a highly liquid asset with strong on-chain liquidity and robust CEX depth, similar to wETH. Its risk profile aligns closely with wETH, providing a solid collateral backing for DOLA. For wstETH to be converted into wETH requires two actions: 1. Unwrap wstETH to stETH. 2. Redeem for wETH via the Lido beacon chain staking contract. Given the deep liquidity and the proven stability of wstETH, increasing the supply ceiling to 50,000,000 DOLA is a manageable risk. This adjustment ensures sufficient capacity to handle large liquidations without adversely impacting market prices. Additionally, the increase in the global supply ceiling from 50,000,000 DOLA to 100,000,000 DOLA is essential to support the overall expansion of FiRM. This increase will provide the necessary flexibility to accommodate the growing demand across various markets within the platform, fostering a healthy and competitive lending environment. #### Parameter Recommendations The RWG therefore approves an increase in the wstETH market's supply ceiling from 10,000,000 DOLA to 50,000,000 DOLA. At the same time, the RWG also approves an increase in the FiRM global supply ceiling from 50,000,000 DOLA to 100,000,000 DOLA. Other parameters such as collateral factors, liquidation factors, liquidation incentives, and minimum debt amounts are recommended to remain unchanged due to their effectiveness in managing risks and maintaining market equilibrium. These parameter settings are supported by detailed simulations and analyses, which are covered in our [Collateral Parameterization Model](https://forum.inverse.finance/t/behind-the-scenes-collateral-parameterization/376) and [Daily Borrow Limit Framework](https://forum.inverse.finance/t/behind-the-scenes-lp-analysis-and-firm-daily-borrow-limits-framework/421) “Behind the Scenes” blog posts. These models consider multiple factors, including supply ceilings, collateral factors, and liquidation dynamics against price impact simulations and liquidity pool data to ensure that the proposed settings are robust and resilient under severe market conditions. #### On-Chain Actions * Set FiRM’s wstETH market’s Supply Ceiling to 50,000,000 DOLA. * Set FiRM’s Global Supply Ceiling to 100,000,000 DOLA. This proposal aims to maintain FiRM's competitiveness and attractiveness as a leading lending platform, ensuring sufficient capacity for growth while managing risks effectively.) (206)