Summary
A proposal to:
- Increase ETHx’s supply cap on Aave’s V3 Ethereum deployment.
Motivation
ETHx (Ethereum)
ETHx has reached 100% supply cap utilization on Ethereum, and its borrow cap is at 9% capacity.
Supply Distribution
Most top ETHx suppliers maintain a varied range of collateral. The most common borrowed asset is WETH, with many also borrowing GHO. The largest ETHx supplier represents a significant portion of the total market, indicating a somewhat concentrated supply distribution. The largest open positions generally have low liquidation risk, as they have safe health scores and involve borrowing GHO or WETH against ETHx collateral.
Overall, WETH and GHO represent most of the value borrowed against ETHx.
Recommendation
Given on-chain liquidity and user distribution, we recommend increasing the supply cap.
Specification
| Chain | Asset | Current Supply Cap | Recommended Supply Cap | Current Borrow Cap | Recommended Borrow Cap |
|---|---|---|---|---|---|
| Ethereum | ETHx | 5,000 | 10,000 | 320 | - |
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