QIP235: Add bsdETH as Collateral for MAI

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network: Base
author: Reserve Protocol
implementor: Guardians
implementation-date: Post Approval
created: 2024-04-17

Summary

Based ETH (bsdETH) is an overcollateralized ETH LST index eligible for early Diva ecosystem rewards that provides broad, efficient exposure to Ethereum staking yield. Based ETH’s asset basket comprises yield-bearing Coinbase Wrapped Staked ETH (cbETH) and Lido Wrapped Staked ETH (wstETH).

bsdETH has ~$8M of TVL and ~$16M of liquidity on Aerodrome.

More information can be founnd at https://app.reserve.org/base/token/0xcb327b99ff831bf8223cced12b1338ff3aa322ff/overview

Security

bsdETH is overcollateralized and governed by RSR stakers, who provide first-loss capital in exchange for 10% of the yield generated by the basket.

The Reserve Protocol has been live on Mainnet and Base collectively for over a year now with no security incidents. 8 major audits have been completed and a $5M ImmuneFi bug bounty continues to contribute to the safety.

Vault specifications:

• Collateral asset to be used: bsdETH
• Minimum collateral to debt ratio: 125%
• Fees: 10% variable interest rate
• Minimum debt: 10 MAI
• Maximum debt: 500,000 MAI
• Oracle provider: Custom oracle, with underlying tokens price via Chainlink
• Risk grading: C
• Risk methodology: https://docs.google.com/spreadsheets/d/1X85z8yMCHcwloKVC6TqO_fWtL2pSlof6ysfaLvyIBTg/edit?usp=sharing

Motivation

bsdETH is the first ETH LST index on Base and has grown to ~$8M TVL in under 2 months since deployment. bsdETH holders also accrue early Diva ecosystem rewards, which will be converted to DIVA tokens after TGE following mainnet launch. QiDao's isolated lending model can provide a unique use case for bsdETH, attracting new TVL into the protocol.

Quorum Standards

The option with the most votes will be adopted

Options

• Approve proposal
• Further discussions needed
• Abstain