Overview
In light of the substantial growth in rlUSD’s supply and liquidity over the past two months, Chaos Labs has conducted a targeted parameter update to align with the latest market dynamics.
Market Cap and Liquidity
Since the previous assessment, rlUSD’s total supply has increased significantly—from 52 million to 132 million tokens—bringing its market cap to $132.56 million. The following chart illustrates the progression in rlUSD’s total supply over time:
rlUSD’s liquidity has also significantly improved since our last analysis. Currently, it is primarily concentrated in two pools: the rlUSD/USDC pool on Curve, with a total TVL of $48.40M, and the rlUSD/USDC pool on Uniswap, with a total TVL of $2M. The chart presented here displays rlUSD’s aggregated on-chain liquidity over time:
Supply Cap and Borrow Cap Recommendations
In accordance with Chaos Labs’ standard risk framework, based on the available on-chain liquidity—we recommend a supply cap of 50,000,000 rlUSD.
After syncing with growth and aligning with the preferences of the team, we recommend limiting the initial borrow cap to 10% of the supply cap.
Oracle Integration
An rlUSD/USD market oracle has been deployed since the initial listing. We recommend utilizing this feed as the price source for the asset.
Interest Rate Curve Adjustment
Consistent with the rationale outlined in this governance proposal, we advise updating the Slope 1 parameter to 6.5%. This adjustment reflects a more appropriate cost of capital for borrowing stablecoins under current market conditions.
Final Recommendation
Given rlUSD’s role as a stablecoin, it is recommended that the asset be listed as borrowable only, with no collateral functionality enabled at the moment. The table below summarizes the proposed configuration, which has been aligned on with @LlamaRisk:
| Parameter | Proposed Value (Ethereum) |
|---|---|
| Isolation Mode | No |
| Borrowable | Yes |
| Collateral Enabled | No |
| Supply Cap | 50,000,000 |
| Borrow Cap | 5,000,000 |
| Debt Ceiling | - |
| Loan-to-Value (LTV) | - |
| Liquidation Threshold (LT) | - |
| Liquidation Bonus | - |
| Liquidation Protocol Fee | - |
| Variable Base Rate | 0% |
| Variable Slope 1 | 6.5% |
| Variable Slope 2 | 50% |
| Optimal Utilization (Uoptimal) | 80% |
| Reserve Factor | 10% |
| Stable Borrowing | Disabled |
| Flashloanable | Yes |
| Siloed Borrowing | No |
| Borrowable in Isolation | No |
| E-Mode Category | N/A |
Disclaimer
Chaos Labs has not been compensated by any third party for publishing this recommendation.
Copyright
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