Author[s]: Mendi Core Team
Title: Adjusting ezETH collateral factor and enable Borrows
Type: Mendi Improvement Proposal
Link to Snapshot: Snapshot
Proposal
Due to shifting market conditions and the repeg of ezETH, along with the opening of ezETH withdrawals by Renzo, the Mendi core team proposes the following adjustments to the ezETH market:
- Collateral factor increase on ezETH
- Enabling borrows of ezETH collateral
| Market | Old C-factor | New C-factor |
|---|---|---|
| ezETH | 50% | 70% |
Motivation
With this adjusted collateral factor and borrows enabled on ezETH the lending protocol can capture a larger market share within the ezETH market.
The Mendi community will gain significant benefits from enabling borrows in the ezETH market:
- The core team believes we can capture a larger market of ezETH on Linea, generating additional revenue to be distributed to stakers.
- New strategies will be possible, enabling LPing with borrowed ezETH funds on DEXs.
- Increased yield for ezETH suppliers through borrowing activity, as seen in the Kelp and Ether.fi markets.
Technical considerations
The Core Team will adjust the ezETH collateral factor and enable borrows with a 24 hour timelock.
Expected Timeline
- Governance Vote: From 07/16 to 07/19
- Deployment Target: After governance vote, there is a 24 hour timelock to adjust ezETH ratio and enable borrows.
Conflict of Interest
There are no conflict of interest for the proposal.
Next Steps
Core team will adjust the ezETH collateral ratio and enable borrows of ezETH collateral