Gauntlet has reviewed Objective Labs’ proposal to delist tBTC and eBTC from Euler Prime. Given the long-tail risks posed by the assets’ multi-layer minting and redemption mechanisms, combined with the vanishing organic supply and borrow demand, we agree that keeping these assets in Euler Prime adds low utility for users and the protocol relative to the downside risk.tBTC has only one collateral position of ~$18.7K against ~$9K USDC, and no borrows. eBTC has 6 collateral positions, its top collateral position by a significant margin is ~$27.5K against ~$12.2K wUSDM, and the only borrow position is < $2.We also recommend the delisting approach discussed in the previous offboarding proposal, except:
- After discussion with Euler Labs and Objective Labs, the protocol is aligned with disincentivizing prolonged borrow of delisted assets over disincentivizing lingering supply. Therefore we no longer recommend setting the IRM reserve factor to 100% as part of the delisting process in Euler. This recommendation was previously made to disincentivize all continued vault usage as soon as possible. We note that the reserve factor is only relevant during the course of the LLTV deramp period, after which no further borrowing will be possible (assuming efficient liquidations).