SAIP #61: Add single-sided gmBTC and single-sided gmETH Cauldrons
TL;DR: Introduce two new markets on Arbitrum using single-sided gmBTC and single-sided gmETH as collateral.
Cauldron Parameters:
- gmBTC:
- Loan-to-Value (LTV): 85%
- Interest Rate: 8%
- Borrow Fee: 0.3%
- Liquidation Fee: 6%
- gmETH:
- Loan-to-Value (LTV): 85%
- Interest Rate: 8%
- Borrow Fee: 0.3%
- Liquidation Fee: 6%
Initial Top-Up: Cumulative 4 million MIM across both cauldrons, starting with low six-figure amounts for beta testing, and ability to scale up to 10m.
Introduction:
Building upon our commitment to the GMX ecosystem and the success of previous gmCauldrons, we propose adding gmBTC and gmETH single sided markets. This expansion allows users to leverage the yields generated by gmBTC and gmETH, while still maintaining full exposure to the underlying BTC and ETH assets.
Risk Assessment:
The single-sided cauldrons have been live since May 2024 and have amassed substantial TVL.Currently, gmBTC has ~$60M of TVL and gmETH has ~$70M of TVL. Given this liquidity, we are confident that these pools can support substantial MIM borrowing and efficient liquidation processes.
The cauldron contracts have undergone rigorous internal testing to ensure reliability. Notably, audits by Guardian, a leading auditor involved with GMX V2, have already been completed.
Profitability:
The proposed interest rates are competitive with the parameters of Abracadabra’s other GMX cauldrons. While exact projections for MIM top-ups and earnings depend on market demand, we anticipate that these additions will contribute positively to the protocol’s revenue streams.
Technology:
These cauldrons utilize a modified version of our standard contracts, specifically designed to handle gm tokens as collateral with looping capabilities. Collateral pricing is determined through Chainlink oracles (single-sided ETH, single-sided BTC) ensuring accurate real-time pricing. The cauldrons support adjustable settings for interest rates, borrow fees, and liquidation fees, all subject to modification via DAO governance.
Voting:
This proposal will follow the Speedlane AIP process, remaining open for community discussion for 48 hours before proceeding to a 24-hour voting period. Upon approval, the single-sided gmBTC and single-sided gmETH cauldrons will be deployed, and beta testing will commence immediately.
Snapshot can be found here.