Simple Summary

This SCCP proposes to update the ETH Wrapper configurations as per the below:

• Lower the burnFeeRate to zero from 50 bp
• Lowers the maxTokenAmount to zero from 20k ETH

Abstract

Below is a description of the parameter changes propopsed in the SCCP:

• burnFeeRate is the rate paid when unwraping ETH by burning sETH
• maxTokenAmount is the maximum amount of sETH that can be minted with ETH

Motivation

The proposed parameter changes are meant to facilitate arbitrage of the peg on L1, with arbitrages taking place by:

• buying cheap sUSD on L2
• bridging it to L1
• swapping to sETH at 5 bp
• unwrapping it to ETH
• Swapping the ETH to USDC

Copyright

Copyright and related rights waived via CC0.