[GIP-159] Change ETH Interest Rate Model parameters on Arbitrum
AI summary
This proposal seeks to adjust the interest rate model for Wrapped Ether (WETH) on the Arbitrum network within the Gearbox protocol. The goal is to make borrowing WETH more attractive, especially for users engaged in strategies involving wstETH (wrapped liquid staked Ether). The current model makes wstETH farming less profitable when WETH utilization is high, leading to lower returns for WETH suppliers compared to other safe yield sources like stETH.
If passed, the base borrow rates for WETH on Arbitrum will decrease, particularly at lower utilization levels. This change aims to benefit users leveraging wstETH by making their strategies more profitable, potentially increasing WETH borrowing activity. WETH suppliers might see a slight decrease in interest earned at certain utilization rates, but the overall goal is to stimulate more activity in the market.
Voting results
🐳 Whale votes
0 votes > 5% VPFull proposal
Authors
desnakeee.eth
Summary
This proposal aims to change Interest Rate Model parameters for WETH market on Arbitrum.
Motivation
Currently leveraging wstETH contributes to more than 75% of the WETH market utilization on Arbitrum (quota utilization stats). Many previously valued points were repriced and users return to "Real" as opposed to the "Expected" yield strategies.
The problem is that profitable wstETH farming is currently possible only below 80% utilization, or even lower as there is usually nonzero quota rate. As a result, under low high-ris…