Thanks for you comments @akshatmittal and your follow-up @pete.
While it’s a shame that adequate DD hasn’t been completed on Origin’s OETH given that we’ve been discussing their integration into the ETHplus collateral basket since Pete posted the original RFC back in Sept 2024 I do think Akshat raises some good points. I completed this work and posted this RFC focussing solely on optimising for liquidity and the redemption curve of ETHplus giving some of the comments of our larger LPs expecting some concerns over OETH allocation and then after some discourse to settle on a lower allocation so i’m grateful for you comments.
Personally, I support your first two points and would also be concerned with holding 30% TVL of OETH in the collateral basket for the points you mentioned. I also don’t like the fact that liquidity levels may not support large redemptions without OETH facilitating these on a case by case basis, this is a centralised process and could be a point of failure in a crisis. On the first OETH RFC there was some comments about the ARM from @river0x, has anything changed to address River’s previous concerns @pete? Are there any external LPs providing ETH to the ARM now?
I do feel these first two points can be mitigated by opting for a smaller allocation and Origin pushing their new Curve pool live reducing dependency and centralisation risks and mitigating any price impact if ww decide to rebalance out of OETH at a later date.
Points 3 and 4 are less of a concern for me, especially as Pete pointed out that sfrxETH operates a AMO with some exposure to restaked ETH and feel this is maybe something that should be highlighted and discussed at a later date with ETHplus governors.
I also have another concern with completing the collateral basket rebalance at this stage, staked RSR slashing. In the past few quarters we’ve seen avoidable slashing events during collateral basket changes on both dgnETH and hyUSD, which rightly so caused some upset with our most aligned RSR holders. Where possible I want to avoid RSR slashing especially on our largest RToken. My concern is since ABC labs doesn’t currently have the bandwidth to complete the OETH DD required to support this proposal they definitely don’t have the bandwidth to support a collateral basket rebalance either which means a higher risk of a slashing event for stakers. It’s for this reason that I encourage the Origin team to hold off moving this proposal to IP until the necessary bandwidth is available to complete the DD and support the basket rebalance sometime in late Q3.
Collateral basket
Thank-you for posting an updated collateral basket @pete. I feel this basket takes into mind the liquidity analysis and previous comments on the RFC and I would support it once ABC labs are ready to take on the rebalance. We could also consider a two-step process giving you 4/5% until some TVL and on-chain liquidity criteria has been met when. we can double the allocation similar to what we did with ETHx.