Summary

Following the ongoing isolation of rsETH on the Ethereum WETH Comet, a mechanical constraint prevents existing rsETH-backed borrowers from unwinding their positions in an orderly manner. With the rsETH borrow collateral factor currently at 0%, the Comet requires a borrower to repay their outstanding WETH debt in full before any rsETH collateral can be withdrawn. For looped rsETH/ETH positions, this makes gradual, iterative unwinding impossible and forces a single full repayment that many users cannot complete in a single step.

To resolve this, Gauntlet recommends raising the borrow collateral factor for rsETH to 80%, below its original level of 88%, so that existing borrowers can partially repay and progressively withdraw collateral to wind down their positions.

More details about this proposal can be found here