Summary
A proposal to:
- Increase BTCB’s supply cap on Aave’s V3 BNB deployment.
- Increase wstETH’s borrow cap on Aave’s V3 Base deployment.
- Increase AAVE’s supply cap on Aave’s V3 Arbitrum deployment.
Motivation
BTCB (BNB)
BTCB has reached 93% supply cap utilization on BNB, and its borrow cap is at 7% capacity.
Supply Distribution
Most top BTCB suppliers borrow stablecoins, with the largest borrowing WBNB. The largest BTCB supplier represents a significant portion of the total supply, indicating a somewhat concentrated distribution.
Overall, USDT represents 44.23% of the value borrowed against BTCB.
Recommendation
Given on-chain liquidity, we recommend increasing the supply cap.
wstETH (Base)
wstETH has reached 27% supply cap utilization on Base, and its borrow cap is at 98% capacity.
Borrow Distribution
The largest wstETH borrower uses weETH as collateral. The largest borrower represents a significant portion of the total market, with their position dwarfing the others shown. The largest open positions have low liquidation risk due to the close correlation between the borrowed wstETH and the supplied weETH.
In aggregate, weETH represents 48.6% of the value backing wstETH loans.
Recommendation
Given user behavior, we recommend increasing the borrow cap.
AAVE (Arbitrum)
AAVE has reached its supply cap on Arbitrum.
Supply Distribution
Supply is well distributed, with the largest supplier representing just 10% of overall supply.
USDC and WBTC are the most popular borrowed assets against AAVE collateral.
Recommendation
Given user behavior and on-chain liquidity, we recommend increasing the supply cap.
Specification
| Chain | Asset | Current Supply Cap | Rec. Supply Cap | Current Borrow Cap | Rec. Borrow Cap |
|---|---|---|---|---|---|
| BNB | BTCB | 600 | 1,200 | 180 | - |
| Base | wstETH | 14,000 | - | 800 | 1,600 |
| Arbitrum | AAVE | 3,600 | 7,200 | - | - |
Next Steps
We will move forward and implement these updates via the Risk Steward process.
For transparency, we aim to execute the risk steward transactions on August 20 at 10:00 am GMT
Disclaimer
Chaos Labs has not been compensated by any third party for publishing this ARFC.
Copyright
Copyright and related rights waived via CC0