[ARC] Gauntlet Recommendations for Polygon V3 and Arbitrum V3

Risk
1

Simple Summary

The supply and borrow caps have been exceeded by the following assets, surpassing the 75% threshold.

  • BAL supply (92.4%) and borrow (76%) caps on Polygon v3.
  • EURS supply (78.4%) and borrow (78%) on Arbitrum v3.

In accordance to our Borrow and Supply Cap methodology, Gauntlet would like to raise the caps of the above assets to the following.

Arbitrum v3

Current Supply Cap Recommended Supply Cap Current Borrow Cap Recommended Borrow Cap
EURS 60,000 65,000 45,000 65,000

Our conservative methodology thresholds the caps for EURS to be 40% of the circulating supply for EURS on Arbitrum. The community can decide whether to adopt the aggressive methodology for EURS supply cap and threshold at 60% of the circulating supply, upon which the supply and the borrow caps will be raised to 100k.

We do not recommend changing the borrow and supply caps for BAL due to the low circulating supply (~525k) of BAL on Polygon, and to prevent excess concentration risk for the protocol (currently ~70%)

Specifications

EURS Arbitrum v3



1 Like
2

Thanks for putting forward this proposal @seawolf.

Please note there is already a proposal in place to increase the supply cap for WBTC on V3 Polygon - [ARFC] Chaos Labs Supply and Borrow Cap Updates - 04.21.2023

3

Thanks @ChaosLabs, we have edited the recommendation to reduce redundancy.

4

To follow up - we plan on putting up an AIP on Wednesday 5/3/2023.

5

AIP has been published here:

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The parameter changes have been implemented on-chain. We thank the community for their participation.