Gauntlet - Parameter Recommendations for mEDGE and mMEV on Euler Yield (2025-02-26)
In light of the proposal by @midas, Gauntlet recommends the following risk parameters to the protocol:
Cap Recommendations
Gauntlet will recommend these assets are not initially borrowable. These assets are both less than two months old and presently have limited DeFi and DEX integration.
- mEDGE
- Set Supply Cap to 3,000,000
- Set Borrow Cap to 0
- mMEV
- Set Supply Cap to 3,000,000
- Set Borrow Cap to 0
Present TVL of mEDGE and mMEV are $2.02M and $1.74M respectively. The only liquidity available to liquidators at present is redemptions to USDC via Midas directly. Atomic redemptions are currently limited to ~$900K available per token in a shared liquidity pool, which if depleted will require non-atomic redemptions until the pool is topped up again.
The proposed supply caps are mindful of expected TVL growth for these tokens while recognizing the present liquidity constraints.
We note that as per Midas’ oracle documentation and their forum post, using their oracles for these assets will effectively price the assets to their NAV once per week. Therefore using their oracles, any potential disruption following a price update will be long lasting. In the rare case where NAV has decreased but the oracle price has not updated, assets could be borrowed against these tokens as collateral at a discount to market price.
Interest Rate Curve Recommendations
These assets are recommended to not be borrowable initially, so no IR recommendations are needed at this time.
LLTV Recommendations
Here we aim to maximize risk-adjusted capital efficiency for users. We note that Euler Yield does not presently contain any ETH or BTC-denominated assets as referenced in the proposal by @midas. We anticipate usage of markets in particular for looping mEDGE / USDC, mEDGE / USDT, and mEDGE / DAI (and similarly for mMEV).
This table assumes mEDGE and mMEV as the collateral assets (with the same initial recommendations for both).
Borrow LTVs are recommended as two percentage points less than the recommended LLTVs per collateral/debt pair.
| Debt | LLTV |
|---|---|
| wUSDM | 90% |
| wM | 90% |
| USDT | 95% |
| USDS | 90% |
| USDe | 90% |
| USDC | 95% |
| USD0 | 90% |
| RLUSD | 90% |
| PYUSD | 90% |
| FDUSD | 90% |
| DAI | 95% |
Next Steps
- We welcome community feedback