[Gauntlet] Offboard rUSD and srUSD from Euler Yield

Euler DAO Markets
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Offboard rUSD and srUSD from Euler Yield

Summary

Gauntlet recommends delisting rUSD and srUSD from Euler Yield. Demand for this vault is expected to be weak, with little demonstrated user demand in the future. Thus, removing rUSD and srUSD from Euler Yield will reduce the protocol’s overall risk exposure.

Description

rUSD and srUSD have significantly reduced their supply in the past 30 days. The combined supply amount (in $) for these assets is currently less than $ 20 K.

Supply of rUSD and srUSD
Supply of rUSD and srUSD3320×1564 193 KB

Offboarding Process

Gauntlet proposes offboarding these assets from Euler Yield, utilizing the following offboarding process listed below:

  1. Set supply and borrow caps to 0 (to allow repayments and withdrawals only).
  2. Inform users about the offboarding on public channels.
  3. Ramp down collateral LTVs on offboarded vaults to 0 over 30 days.
  4. Once the vaults hit zero supply, they can be safely delisted from the UI.

Next Steps

  • We welcome community feedback.
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Reservoir has experienced a significant contraction in supply over the past 2 weeks, from a peak of $560M on Oct 28 to $41M on Nov 12, a >90% drop in TVL. rUSD and srUSD supply on Euler Yield has declined concomitantly as all major lenders and borrowers have exited their Reservoir positions. Given these developments, we no longer believe Reservoir is a good fit for Euler Yield, and has a poor risk-reward profile. We recommend delisting rUSD and srUSD from Euler Yield in the established manner.