RFP Idea-38: Onboard gmBTC & gmETH on Arbitrum

RFP Idea-38: Onboard gmBTC & gmETH on Arbitrum

Abstract

RFP-38 proposes integrating gmBTC & gmETH (GMX v2 liquidity tokens) as a full collateral market within Radiant Capital’s Arbitrum deployment.

Motivation

Radiant Capital aims to provide a decentralized platform for lending and borrowing cryptocurrencies, offering users an efficient and secure means to access financing and generate yields. As the DeFi market evolves, expanding the platform’s offerings by incorporating new, high-quality assets as collateral and borrowing options is essential.

GMX Protocol is the largest derivatives exchange on Arbitrum. The introduction of several new features and integration with Chainlink Data Stream in GMX V2 have significantly reduced the risks of exploitation and price manipulation compared to GMX V1. gmBTC is a BTC-USD Liquidity Token on GMX V2, and it earns fees from leverage trading, borrowing fees, and swaps.

This governance proposal seeks approval to integrate gmBTC & gmETH as an accepted form of collateral within Radiant Capital’s Arbitrum deployment. This expansion aligns with Radiant Capital’s vision of offering its users a comprehensive and diverse set of assets.

Chaos Labs and the Risk Committee have evaluated gmBTC & gmETH and recommended the parameters for its integration into the platform, which is outlined below:

https://chaos-labs.notion.site/EXT-gmBTC-gmETH-Listing-on-Arbitrum-8d782822085d4b818852cefc31e92726

Key Terms

  • gm - GMX liquidity token

  • Max LTV - The Maximum LTV ratio represents the maximum borrowing power of a specific collateral. For example, if a collateral has an LTV of 75%, the user can borrow up to 0.75 worth of ETH in the principal currency for every 1 ETH worth of collateral.

  • Liquidation Threshold - This represents the threshold at which a borrow position will be considered undercollateralized and subject to liquidation for each collateral. For example, if a collateral has a liquidation threshold of 80%, it means that the position will be liquidated when the debt value is worth 80% of the collateral value.

Specifications

  • Add gmBTC and gmETH as collateral market

  • gmBTC Max LTV: 55%

  • gmBTC Liquidation Threshold: 60%

  • gmBTC supply cap: 3,390,000

  • gmETH Max LTV: 60%

  • gmETH Max Liquidation Threshold: 65%

  • gmETH supply cap: 3,390,000

Monitor the market and introduce allocation points (incentive emissions) for lending as user behavior is analyzed.

Steps to Implement

  • Chainlink Integration: To list gmBTC & gmETH, a Chainlink feed must be integrated. This feed will provide accurate, real-time exchange rate data for the GM tokens.

  • gmBTC Chainlink oracle: 0x395D5c5D552Df670dc4B2B1cef0c4EABfFba492f

  • gmETH Chainlink oracle: 0xfb3264d1129824933a52374c2c1696f4470d041e

  • Smart Contract Implementation: Based on the defined parameters, the Radiant team will implement the necessary updates to enable the integration of gmBTC & gmETH as a collateral market with the parameters as laid out above. This implementation will involve coding and testing the smart contracts to ensure their functionality and security.

  • User Interface Update: The Radiant Capital user interface will be updated to reflect the addition of gmBTC and gmETH as collateral markets. This includes providing users with the option to select gmBTC and gmETH as collateral and displaying relevant information such as gmBTC and gmETH exchange rates and associated risks.

Overall Cost/Impact

Minimal.

Timeline

Integration is expected to occur swiftly, subject to the following stages:

  • Local Testing: The Radiant team will conduct thorough testing of the implementation in a local environment to ensure its functionality, security, and compatibility within the Arbitrum ecosystem.

  • Staging: Following Chainlink Feed integration, the implementation will proceed to a staging phase, where further testing will verify the integrity and functionality of the gmBTC & gmETH collateral market.

Voting

  • In Favor: Supportive of RFP-38, adding gmBTC & gmETH to the Arbitrum deployment of Radiant

  • Against: Against implementation of the RFP-38 proposal

  • Abstain: Undecided, but contributing to quorum

Sounds great!

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