[ARFC] Chaos Labs Risk Stewards - Increase Borrow Caps for cbETH on V3 Base - 06.23.2024

Summary

A proposal to increase the borrow caps for cbETH on Base

Motivation

cbETH (Base)

cbETH has hit its borrow cap following new borrowing demand in recent days; it has previously reached its borrow cap before the debt was repaid.

Borrow Distribution

The top two cbETH borrowers are both looping the asset with WETH-correlated assets, putting their positions at limited risk of liquidation.

Recommendation

Given on-chain liquidity, user behavior, and the relatively small borrow cap relative to total supply, we recommend doubling the borrow cap.

Specification

Chain Asset Current Supply Cap Recommended Supply Cap Current Borrow Cap Recommended Borrow Cap
Base cbETH 3,000 No Change 200 400

Next Steps

We will move forward and implement these updates via the Risk Steward process.

Disclaimer

Chaos Labs has not been compensated by any third party for publishing this ARFC.

Copyright

Copyright and related rights waived via CC0

The tx for this proposal has now been executed