Gauntlet supports the addition of native USDC on Arbitrum. Per Gauntlet’s borrow and supply cap methodology, we recommend setting the supply cap no higher than 60% of on-chain token supply. The current on-chain supply is 68,424,160.9, which implies a supply cap of 41M. Our methodology also implies setting the borrow cap equal to the supply cap.
We agree with the approach of setting all other parameters equal to the current parameters of USDC.e. We expect native USDC to maintain its peg to USD at least as well as USDC.e, as it is essentially the same asset but without the cost and risk associated with bridging.
| Parameter | USDC.e | USDC (native) |
|---|---|---|
| LTV | 81% | 81% |
| LT | 86% | 86% |
| LB | 5% | 5% |
| Supply Cap | 150M | 41M |
| Borrow Cap | 100M | 41M |
| RF | 10% | 10% |
| emode | YES | YES |
| emode LTV | 93% | 93% |
| emode LT | 95% | 95% |
| emode LB | 1% | 1% |
| Base rate | 0% | 0% |
| slope1 | 3.5% | 3.5% |
| Slope2 | 60% | 60% |
| optimalUtilization | 90% | 90% |
| stable borrowing | YES | NO |