[Gauntlet] Add TETH as Collateral for USDC,USDT0 on Euler Arbitrum

Euler DAO Markets
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Add TETH as Collateral for USDC,USDT0 on Euler Arbitrum

Summary

Gauntlet recommends adding USDC & USDT as borrow tokens for tETH on Euler Arbitrum.

Overview

While the DEX Liquidity for tETH is low. There is liquidity available on Arbitrum to support 150 tETH supply caps on Euler and during stressed scenarios, the collateral can be bridged to Ethereum and curve pools on ethereum will be able to provide sufficient liquidity to swap. more details are here

tETH Arb Liquidity
tETH Arb Liquidity3024×810 158 KB

LLTVs

Gauntlet recommends adding the following LLTVs for TETH.

Collateral Debt LLTV
tETH USDC 80%
tETH USDT0 80%

Borrow LTVs are 2% lower than LLTV

Next Steps

  • We welcome community feedback
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Objective Labs supports Gauntlet’s proposal to enable tETH as collateral for USDC and USDT0 on Euler Arbitrum.

While local Arbitrum liquidity can support the current 150 tETH cap, we recommend setting a more conservative LLTV of 75% initially instead of 80%. This adjustment accounts for current liquidity depth (~$1–1.2M within 5% slippage), oracle lag, and execution costs.

We can revisit increasing the LLTV to 80% once on-Arbitrum liquidity improves to $3–5M at 1% slippage or bridge redemption becomes faster and more reliable.