Summary
It is proposed to create two Vaults (available on Arbitrum & Optimism) for $wstETH on dForce and reward users of $wstETH on dForce with $LDO token received from Lido Finance (subject to Lido’s monthly reWARD budget planning):
- $iwstETH Vault with 3m USX debt ceiling and 3% interest on each network
- $wstETH/$ETH LP Vault (LP token from Curve Finance) with 3m USX debt ceiling and 3% interest on each network
Background
dForce announced collateral support to $wstETH in December 2021 and has contributed 5,634 newly minted $wstETH (or >$7m in dollar value) from our referral link: 0x0cf797324f358aca98acfc9cb94d14c9738921f7 since then.
dForce now ranks #2 on Arbitrum with a total holding of 5,000 $wstETH, and #4 on Optimism with a total holding of 2,110 $wstETH.
Lido Finance will partner with dForce to incentivize lending activities around $wstETH with $LDO rewards (subject to Lido’s monthly reWARD budget planning), further growing the two communities towards long-term success on different layers in a meaningful way.
Motivation
To facilitate wider adoption of $wstETH, users will be rewarded with $LDO token by lending $wstETH to dForce on Arbitrum and Optimism. Also, you can further enhance capital efficiency by borrowing $USX against collateralized $wstETH, or leverage dForce to borrow $wstETH and $ETH and pair them to provide liquidity on Curve.
All $LDO rewards dForce receives from Lido Finance will be distributed to users of $wstETH on dForce.
Specification
We propose to support $wstETH and its related collaterals by creating two Vaults on Arbitrum and Optimism simultaneously:
-
$iwstETH Vault. $wstETH holder can deposit $wstETH into dForce lending and use the certificate token ($iwstETH) as collateral to mint $USX from the $iwstETH Vault. By doing so, users will be able to earn multiple rewards including $wstETH staking yield, deposit interest on dForce Lending, as well as $LDO rewards.
Risk Parameters:
- Collateral: $iwstETH ($wstETH yield token on dForce Lending)
- Supply Cap: subject to dForce deposit cap
- Debt Ceiling: 3m $USX
- Interest Rate: 3% per annum
- LTV: 82.5% (consistent with dForce Lending risk parameter)
-
wstETH/ETH Curve LP Token Vault. $wstETH users can provide wstETH/ETH liquidity on Curve and use their LP token as collateral to mint $USX from this Vault, further leveraging dForce Lending to improve capital efficiency.
Risk Parameters:
- Collateral: wstETH/ETH Curve LP token
- Supply Cap: equivalent to 50,000 $wstETH
- Debt Ceiling: 3m $USX
- Interest Rate: 3% per annum
- LTV: 70%
Both Vaults will be incentivised with $LDO rewards.
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