Summary
A proposal to increase the supply and borrow cap for USDT on Aave Ethereum and Polygon V3.
Motivation
The recommendations below were made utilizing Chaos’ supply and borrow cap methodologies and after analyzing user positions for each asset.
The supply cap for USDT on Polygon and Ethereum has reached 80% utilization, with borrow caps reaching 77% and 74%, respectively.
Given the current market conditions and absolute sizes of the markets on each deployment, we recommend increasing the caps on Ethereum by 1.5X and on Polygon by 2X.
Recommendations
| Chain | Asset | Current Supply Cap | Recommended Supply Cap | Current Borrow Cap | Recommended Borrow Cap |
|---|---|---|---|---|---|
| Ethereum | USDT | 1,000,000,000 | 1,500,000,000 | 930,000,000 | 1,400,000,000 |
| Polygon | USDT | 45,000,000 | 90,000,000 | 45,000,000 | 85,000,000 |
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