DIP065 - Adding saETH as collateral for minting USX on Arbitrum

Governance DIP
#1

Summary

This DIP aims to gain support from dForce community for adding saETH as collateral for minting USX on Arbitrum.

It is also proposed to adjust the interest rate for iwstETH from 10% to 16% on Arbitrum and Optimism.

Background

In addition to iwstETH, we are working to collaborate with our partners to onboard more LSD assets as collateral for minting USX, providing users with the option to best leverage the LSD assets of their choice.

Aspida is a liquid staking infrastructure designed to enhance Liquidity Staking Token (LST) assets across major cryptocurrencies. Aspida is committed to advancing decentralization by prioritizing the integration of underlying services that enhance decentralization, such as the collaboration with Distributed Validated Technology (DVT) solutions like SSV to decentralize validator sets. Aspida’s primary focus remains on optimizing risk-adjusted staking yields, achieved through initiatives like integrating native staking via Eigenlayer.

aETH

aETH is launched by Aspida, serving as the deposit certificate of the native ETH token and can be minted with ETH at a 1:1 ratio. It can also be withdrawn into native ETH via unstaking, or users can simply exchange between aETH and ETH via Aspida’s native liquidity module or external DEX.

saETH

saETH is a staking ETH LSD staking token, an ERC-4626 compliant token that is minted upon aETH staking. Users are required to stake their aETH into saETH to earn Ethereum’s staking yield. This mechanism provides structural liquidity yield, where staking yield is exclusively distributed to those who have staked aETH into saETH. Consequently, it offers a leveraged yield structure (higher than native staking yield) to saETH holders, with the saETH yield increasing as more aETH remains unstaked.

Motivation

USX can be minted through a vault at a predetermined fixed rate, with further adjustments made through governance. This approach aims to extend USX’s collateral to a diverse range of assets, maximizing USX’s utility while maintaining a satisfactory level of security through customized parameters for each vault.

By far, we have greenlit the use of wstETH and USX-2CRV LP tokens as collateral to mint USX on Arbitrum. We are also in discussions with several other protocols in hopes of onboarding more premier LSD assets for minting USX. This initiative aims to integrate USX into the broader DeFi ecosystem through collaborations and partnerships, offering users a variety of LSD assets (such as wstETH and saETH) to enhance capital efficiency and better align with their investment strategies.

Both dForce and Aspida will provide incentives to bootstrap the adoption of saETH on Arbitrum.

Specification

saETH vault will be firstly launched on Arbitrum.

The interest rate for iwstETH vault will also be adjusted from 10% to 16% on Arbitrum and Optimism.

Here are the proposed parameters for the saETH vault on Arbitrum:

  • LTV: 70%
  • Supply cap: 2,000 saETH
  • Mint cap: 4,000,000 USX
  • Borrow fee: 0%
  • Borrow interest: 16%
  • Liquidation fee: 5%
  • Close factor: 50%

Parameter update for iwstETH vault on Arbitrum and Optimism:

  • Borrow interest: 16%