MIR-35┃Add rETH as collateral for paUSD on Parallel on Ethereum

Integration Request (PIR) Approved PIRs
1

Summary:

This proposal aims to add rETH as new collateral for paUSD on Parallel on Ethereum.

Rationale:

Rocket Pool is a decentralized Ethereum-based protocol that provides a decentralized way to stake your Ether (ETH) and earn rewards in the form of interest. It enables individuals and businesses to contribute their Ethereum holdings towards a shared pool, which is then used to stake on the Ethereum 2.0 network.

The Rocket Pool network is designed to be highly decentralized, with multiple nodes operating across the world. It uses a unique system of smart contracts and algorithms to ensure that the pool is secure and efficient, and that rewards are distributed fairly among all participants.

One of the key benefits of Rocket Pool is that it allows anyone to participate in Ethereum 2.0 staking, regardless of the amount of ETH they hold. This makes it an attractive option for small investors who may not have the resources to stake on their own.

Overall, Rocket Pool is an innovative protocol that is helping to make Ethereum 2.0 staking more accessible and decentralized.

You can learn more about these mechanisms in their documentation / whitepaper.

Once the vote is accepted on Snapshot, we will determine the associated liquidation ratio, minimal collateral ratio, debt ceiling, liquidation bonus on a second MIR discussion.

Project Presentation:

Protocol name : Rocket Pool
Token requested : rETH
Token contract address :
rETH : https://etherscan.io/token/0xae78736cd615f374d3085123a210448e74fc6393
Audit(s) links :

Chain requested : Ethereum
Relation with the project : None.
Website: https://rocketpool.net/
Github: Rocket Pool · GitHub
Twitter : https://twitter.com/Rocket_Pool
Discord : Rocket Pool

Token metrics & Risk assessment:

1127×444 19.2 KB

  • Smart Contract risk: B+

rETH launched on Ethereum on 9 November 2021. The code has multiple audits from Sigma Prime and ConsenSys Diligence (cf. Audits | Rocket Pool Community Site) in addition of a Immunefi bug bounty. rETH is Rocket Pool’s staked ETH derivative token. Minting rETH is limited exclusively to the Deposit Pool contract. In effect, this acts as an intermediary for each new user depositing ETH in Rocket Pool. rETH has generated more than 250k transactions.

  • Counterparty risk: B

rETH is minted when stakers deposit ETH into the Rocket Pool deposit pool, and rETH is burnt when stakers withdraw their ETH. The Rocket Pool contracts do not have permissions that grant administrators mint/burn capabilities. The Rocket Pool Protocol is intended to be run by a “Dual DAO Model 1” - one Oracle DAO (oDAO) and one Protocol DAO (pDAO). Further details and respective DAO responsibilities are set out below. rETH currently has 18k holders on Ethereum.

  • Market Risk: B-

rETH is ranked 2nd in the list of Ethereum Liquid Staking assets with a capitalization of $1,5B. Furthermore, rETH is the wrapped version of rETH and is swappable at any time through LPs, the price is correlated to the ETH since rETH is the representation of ETH staked through Rocketpool. When withdrawals from the Beacon chain will be introduced (cf EIP Shanghai), it will be possible to redeem ether by burning rETH at the same 1:1 ratio. For these reasons, we consider the risks of rETH mitigated by his principal collateralized assets: ETH. The rETH liquidity available is nearly $50M with approximately $2M of volume per day on Ethereum.

Ethereum Staking wars : Ethereum Staking Wars

  • Chain Risk : A

Ethereum had 0 outages over the last 6 months. (https://etherscan.com/chart/blocks)

  • Liquidity Risk of PAR on Ethereum: C-

The paUSD/wUSK/USDC pool on Balancer has $245k liquidity composed of 17,8% USDC, 27,67% wUSK and 54,53% paUSD. The paUSD/wUSK pool Uniswap (Bunni) has $17k liquidity.

This provides the following price impact on the following trade sizes:

1000 USDC → paUSD: 0.12%
10000 USDC → paUSD: 0.29%
25000 USDC → paUSD: 0.48%
50000 USDC → paUSD: 0.68%

  • Overall Risk : B-

The Overall Risk is the average of the points mentioned above.

  • Community size :

Twitter: 48k followers
Discord: 21k members

Means:

  • Human resources: If the proposal is approved, multisig DAO signers will need to sign and execute transactions to add rETH as collateral on Parallel.
  • Treasury resources: There is no cost for the treasury to add rETH on Parallel on Ethereum.

Technical implementation:

  1. Add rETH in the ConfigProvider Contract with all parameters decided by the Mimo governance.
  2. Set the chainlink oracle related to the rETH into PriceFeed Contract
    → rETH-ETH price feed | ETH-USD price feed

Voting options:

  • Add rETH as new collateral for paUSD on Parallel on Ethereum
  • Against adding rETH as new collateral for paUSD on Parallel on Ethereum
  • Abstain

Authors: @starny & @JeanBrasse from Mimo Labs

Community poll:

  • Add rETH as new collateral for paUSD on Parallel on Ethereum
  • Against adding rETH as new collateral for paUSD on Parallel on Ethereum
  • Abstain
0 voters
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2

the vote is now live on Snapshot: Snapshot

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3

The vote has been approved by the dao, result: Snapshot

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