Background
CapRiskSteward was introduced ~2 months ago as a mechanism for fast-lane risk management of Euler DAO’s vaults. CRS is governed by Euler DAO with the steward role given to a multisig comprised of signers from Euler Labs, Gauntlet and Objective Labs. More context about CRS can be found in the main thread.
Performance
CRS has been highly effective in reducing the time to result for incremental risk updates instrumental to the growth and competitiveness of Euler DAO’s markets. Objective Labs and Gauntlet have maintained a high standard of transparency for CRS updates, notifying the community about proposals, rationale, and execution (April, May).
Since the introduction of CRS, Euler DAO’s risk managers have averaged ~2 CRS proposals per week, addressing crucial supply- and borrow side limitations in a timely manner. CRS was crucial for the growth of WETH, rsETH, eUSDe, PT-sUSDe, PT-cUSDO vaults, as well as proactive interest rate adjustments in line with the market’s benchmark rates (which have experienced more volatility in recent weeks).
Proposal
CRS’s current configuration (1.5x every 3 days) has proven to be a bottleneck in scaling vaults with highly elastic demand such as PT-cUSDO and eUSDe on Ethereum, and weETH and USDT0 on Unichain. Because of the inability to meet demand quick enough, we assess that Euler DAO has failed to capture 20-60M in supply which has gone primarily to Morpho where similar markets are uncapped. With Euler’s growth trajectory and the increasing number of third-party incentive campaigns we expect that demand elasticity is going to increase in the near term.
To keep Euler DAO markets scaling effectively we recommend the following parameter adjustments to CRS:
| Parameter | Value |
|---|---|
| MAX_ADJUST_FACTOR | 1.5 → 2 |
| CHARGE_INTERVAL | 72h → 24h |