This is the conclusion of the team analysis: sAVAX supplier’s leverage demand is very strong.
After the proposal is passed, sAVAX suppliers can still gain a good APY.
Title: Prediction about the increase of sAVAX supply cap
Author: CIAN_team
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Analysis of sAVAX on AAVE V3
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- Analysis of users’ strategies
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- Analysis of increase of sAVAX
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The impacts of the proposal after it is passed
Analysis of sAVAX on AAVE V3
Total Supply: 500K
Total Supply/ Supply Cap: 100%
Addresses of sAVAX supplies ： https://snowtrace.io/token/0x513c7e3a9c69ca3e22550ef58ac1c0088e918fff#balances
Number of suppliers: 2,487
Proportion of the top 36 token holders: 98.39%
Below is the snapshot of main suppliers on 19 th July at 10:00 UTC
Analysis of suppliers ’ strategies
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50% of suppliers are using the leveraged staking strategy and half of their health factors are below 1.1.
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61.3% of suppliers health factors is under 1.4, which means they are using a high leverage.
Analysis of increase of sAVAX
sAVAX launched on AAVE since 30th June. After the launch, the total supply of sAVAX increased fast by 26%, about 800,000. According to estimates, there is about 200,000 - 300,000 new sAVAX tokens minted because of the leveraged staking strategy.
The impacts of the proposal after it is passed
The supply APY of sAVAX on AAVE is 3.55%, and the borrow APY is 4.4%.
If the supply cap of sAVAX doubles, and is full, the supply APY will be 1.77%.
About 250,000 AVAX will be borrowed due to leveraged staking , so the borrow APY of AVAX will be around 5.76%.
By using CIAN’s leveraged staking strategy, the APY for AVAX can be 30.536%.
Reference
Explanation on SAVAX’s leverage staking strategy: Leveraged Staking Strategies for sAVAX | by CIAN | Jul, 2022 | Medium