Gauntlet has reviewed Objective Labs’ 4/29 proposal for parameter changes.
- We agree that the wstETH IRM can have the kink rate lowered to 0.5% to better align with current market demand and cause minimal disruption for current users.
- USDe liquidity has marginally improved since our previous recommendation for eUSDe and PT-eUSDe caps. We recommend a more moderate increase of the supply cap to 45M for eUSDe and PT-eUSDe, and of the borrow cap to 36M for eUSDe, and to revisit as needed if cap usage rises further.
- After discussion with Objective Labs, we are aligned with lowering of caps for mMEV and mEDGE. The backing portfolios for these assets have increased their exposure to intrinsically leveraged assets and to lending positions that could materially affect the NAV if liquidated. Meanwhile instant redemption capacity has continued to remain a low proportion of TVL, and oracle pricing may not be in lockstep with the true NAV.