All assets on Gnosis V3 stuck when holding USDC

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1

Assets on Gnosis V3 are stuck now due to the borrow and supply being equal for USDC on V3 Gnosis.

For example having wstETH and USDC (not USDC.e.) both as supply and collateral. It is not possible to withdraw or swap wstETH since USDC has to be withdrawn first. But for USDC withdrawal is impossible because of the total borrows are equal to the total supplied.

In short, having USDC supplied results in all supplied assets on Gnosis being stuck there.

Shouldn’t the borrow limit be put in place first and then supply cap lowered so it is actually possible to withdrawal USDC or at least other assets. Now this might take a while before people notice they pay 68% interest on their USDC loan.

4

We understand that the current state of the deprecated bridged USDC reserve can create confusion, so we want to clarify what is happening and the actual impact.

Context on the Deprecated USDC Implementation

The legacy bridged USDC on Gnosis (USD//C) is in the process of being deprecated, for which more information can be found here. This “unofficial” token no longer aligns with the infrastructure and directionality of the chain, and a newer, Circle-canonical form of USDC is now available. As part of the deprecation process, demand patterns shift significantly: when a reserve transitions toward phase-out, both borrowing and supplying behaviors diverge from normal market conditions, especially when constrained. In this specific case, the reserve is now fully utilized because a single inelastic borrower with a $750K debt has not yet repaid their position, resulting in total borrows equal to total supply.

Impact on Withdrawals and Cross-Asset Behavior

It is important to emphasize that this does not create cross-contagion across the rest of the Gnosis V3 market:

  1. All non-USD//C reserves remain fully withdrawable. The situation in the deprecated USD//C market does not propagate to wstETH or any other listed assets.
  2. Users supplying USD//C with no collateral usage (0% HF exposure) can withdraw all other assets without restriction.
  3. Users supplying USD//C with some collateral usage can still withdraw other assets, as long as their outstanding debt is sufficiently covered by the collateral value of assets other than USD//C. In other words, if the non-USD//C collateral value (adjusted for LT) exceeds total debt, those assets can be withdrawn normally.

Because of these mechanics, the amount of *non-*USD/C liquidity actually constrained by the fully utilized USDC pool is relatively small, approximately $11K in aggregate across all affected users.

We recognize this situation is inconvenient for a subset of users, and the teams are monitoring it closely. As with any deprecation process, the pool will return to normal withdrawability once the remaining borrower eventually closes their position.

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6

Thanks for this clarification.

I am one of the users in the unfortunate position where I am supplying USD/C and borrowing EURe and in the situation where I cannot swap USD/C in the Aave dashboard nor withdraw it.

If the single inelastic borrower with a $750K debt pay back it back or get liquidated, would I be able to withdraw my USD/C position, at least, partially? If so, what’s the easiest way to track this user?

Thanks for your answer.