Abstract
RFP Idea-40 proposes integrating rsETH (KelpDAO’s Liquid Restaking Token) as a full collateral and borrow market within Radiant Capital’s Ethereum deployments.
Brief introduction to Kelp
KelpDAO (https://www.kelpdao.xyz/restake/) is one of the largest liquid restaking protocol built on top of the Eigen Layer. Restakers on Kelp get access to multiple benefits like restaking rewards, staking rewards and DeFi yields.
Latest stats:
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USD 1.1 Bn+ (~300k Eth) TVL
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40K restakers onboarded
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Live across mainnet and 9 L2s such as Arbitrum, Op, Base, Scroll, Linea etc.
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Withdrawals are enabled on Kelp and rsETH holders can unstake rsETH for any of the LSTs on mainnet on KelpDAO
KelpDAO has undergone multiple security audits by top tier audit firms including Sigma Prime, Code4rena. More about KelpDAO’s security here: Kelp DAO Audit reports
Motivation and Rationale
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.
KelpDAO’s rsETH allows users to restake ETH and LSTs and earn staking and additional restaking rewards in return. Currently, about 300k ETH ($1.1 Bn) has been restaked with Kelp and has been deployed through EigenLayer.
Users can deploy their rsETH liquidity in DeFi opportunities across major protocols such as Pendle, Curve, Uniswap, Gearbox, Maverick and many more. Here’s a list of DeFi opportunities for rsETH across chains- link.
This governance proposal seeks approval to integrate rsETH as an accepted form of collateral and as a borrowing market within Radiant Capital’s Ethereum network deployment. This expansion aligns with Radiant Capital’s vision of offering its users a comprehensive and diverse set of assets.
Useful links-
- KelpDAO’s Dapp
- Contract Address: 0xA1290d69c65A6Fe4DF752f95823fae25cB99e5A7
- Github Docs
- Oracles
- Chainlink Market feed: RSETH / ETH | Chainlink
- Redstone market feed: https://app.redstone.finance/tokens#/app/token/rsETH\ETH
Key Terms
rsETH - KelpDAO restaked ETH
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 rsETH as a full collateral and borrow market
Point incentives: Kelp to provide 3x Kelp Miles to rsETH lenders and borrowers. 1x EigenLayer points to lenders.
Chaos Labs and Radiant Capital team to share more inputs on Max LTV, Liquidation Threshold, and Liquidation Bonus
Steps to Implement
Chainlink Integration: To list rsETH, a Chainlink feed for the rsETH/eETH exchange ratio must be integrated. This feed will provide accurate, real-time exchange rate data for the rsETH token. Ethereum: Chainlink Ethereum Feed.
Smart Contract Implementation: Based on the defined parameters, the Radiant team will implement the necessary updates to enable the integration of rsETH as a collateral and borrow 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 rsETH as a collateral and borrow market. This includes providing users with the option to select rsETH as collateral and borrow assets, as well as displaying relevant information such as rsETH exchange rates, available loan options, 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 Ethereum 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 rsETH collateral and borrow market.