All assets on Gnosis V3 stuck when holding USDC

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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USD//C. In other words, if the non-USD//C collateral value (adjusted for LT) exceeds total debt, those assets can be withdrawn normally.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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