Deploy Venus Protocol on ZKsync Era

Proposals
1

Proposal Deploy Venus Protocol on ZKsync Era

Rationale

We (Matter Labs team) propose the L2 expansion of Venus Protocol to ZKsync Era (referred to as “ZKsync”). Through deploying on ZKsync, Venus can provide users fast and cheap transactions, without compromising on security or decentralization. We look forward to the opportunity to welcome Venus Protocol to the ZKsync ecosystem.

Motivation

ZKsync is a Layer 2 rollup solution for Ethereum that provides high speed and low-cost transactions by using zero knowledge proofs. Scalability is achieved through processing and bundling transactions off-chain and then verifying the bundles on Ethereum, via validity proofs. ZKsync has one billion+ in TVL and millions of active users. Venus Finance can take advantage of ZKsync’s high performance, while tapping into its DeFi ecosystem and user base.

Benefits of Deploying on ZKsync:

Fast and Cheap Transactions: Support more users with the high throughput and single cent gas fees offered by ZKsync.
Ecosystem and User Base: Access ZKsync’s ~$1.1Billion TVL and serve 3.6Million monthly active users.
Interoperability: Plug into the liquidity and user base of other blockchains using ZKsync technology with native interoperability and account abstraction (e.g., Cronos blockchain, from Crypto.com).
EVM Compatibility: Refactoring will be limited considering ZKsync is EVM compatible.
Partnership Support: Co-marketing, introduction to ZKsync Defi teams, and technical support will be provided by the Matter Labs team, a core contributor to ZKsync.

Risk Analysis

ZKsync has undergone numerous internal and external audits by OpenZeppelin, Halborn, and Spearbit. Over $8m has been spent on audits and bug bounties so far. Currently, there is a $1.1m bug bounty.

Key Discussion Points

  • Venus Deployment Timeline
  • Marketing Support

Additional Resources

8 Likes
2

Greatly support new partner

But need absolutely to know what Matter Team going to do to help Venus launch on ZkSync , especially on the incentive part for providing liquidity/ borrow asset

3

I strongly support the proposal to deploy the Venus Protocol on ZKsync Era. This initiative will allow Venus to benefit from fast and cost-effective transactions while maintaining high standards of security and decentralization. Additionally, the integration with the ZKsync ecosystem and its large user base, along with technical and marketing support from Matter Labs, will significantly strengthen our position in the DeFi space. It is an excellent opportunity to expand and enhance our platform.

4

I am looking forward to deploying Venus on ZKSync. This proposal has my full support.

5

Lets gooo.

Hopefully it will be possible to farm points and maybe get some liquidity mining rewards :cold_face:

6

I would love to see Venus deploy on ZKsync! looking forward to it! <3

7

This has my support. I hope there will be opportunities for airdrops and cross marketing more specifically. ZKsync will benefit from the value inherent in the venus protocol.

1 Like
8

Good proposal, but we need Matter lanbs team to provide detailed cooperation plans and incentive rewards, so that it is easier for the Venus team to evaluate

9

EVM solutions have already found a fair number of followers. This is a great offer, let’s take it.

10

Very supportive of this proposal! Let’s do it :wink:

11

I am in support if ZKsync provides some sort of incentive for early adopters/loyal Venus users

12

Summary

Chaos Labs has completed a comprehensive analysis to provide informed recommendations for the launch parameters for the Venus deployment on zkSync. These initial recommendations aim to ensure a safe and efficient launch and are the basis for future optimization post-launch after observing usage on each pool.

Core Pool

Collateral Factor

  • We used battle-tested parameters for native USDT.
  • For USDC.e, we recommend slightly more conservative parameters than typical given the unique risks associated with bridged tokens. We advise migrating to native USDC once it approaches parity in supply and liquidity.
    • At present, native USDC’s transaction count and on-chain supply ($6.69M) remains significantly smaller than USDC.e’s.
  • For WBTC and WETH, we set this in the range of 75%-80%.
  • For ZK we recommend starting with far more conservative parameters and increasing them as we monitor usage and risk with new positions.

Supply and Borrow Caps

  • Derived from on-chain liquidity; specifically, 2x the current amount of liquidity available in a single swap on a DEX aggregator at the point where slippage equals liquidation incentive (10%).
  • Borrow caps are derived from the supply cap, using the Kink as the optimal point for borrow amounts, and from that, calculating a borrow cap at slightly higher than the Kink.

IR Curves

  • For analogous assets already listed on BNB Chain: parameters are aligned to Venus BNB Chain deployment.
  • We recommend targeting a 7% borrow rate (at par with Maker’s latest DAI savings rate) for stables at the Kink.

Additional Parameters

  • Close Factor: 50%
  • Liquidation Incentive: 10%
  • minLiquidatableCollateral: 100 USD

XVS Bridge Parameters:
ZKsync bridge to/from Ethereum, BNB, and opBNB

  • Daily limit: 100,000 USD
  • Single transaction: 20,000 USD
  • mintable XVS on ZKsync: 500,000 XVS

Recommendations

Asset WETH USDT USDC.e WBTC ZK
Collateral Factor 77% 77% 72% 77% 35%
Liquidation Threshold 80% 80% 75% 80% 40%
Supply Cap 2,000 4,000,000 5,000,000 40 25,000,000
Borrow Cap 1,700 3,300,000 4,200,000 20 12,500,000
Kink 80% 80% 80% 45% 45%
Base 0% 0% 0% 0% 2%
Multiplier 4.25% 8.75% 8.75% 9% 20%
Jump Multiplier 80% 80% 80% 200% 300%
Reserve Factor 20% 10% 10% 20% 25%