Summary
A proposal to increase:
Arbitrum
- USDC - supply and borrow cap
- ARB - supply cap
Motivation
The recommendations below were made utilizing Chaos’ supply and borrow cap methodologies and after analyzing user positions for each asset.
Please note that there are several other assets across V3 deployments with high supply and borrow cap utilization that were analyzed and do not have recommendations for an increase, given current market conditions. We maintain continuous monitoring of protocol usage and adjust our recommendations in response to evolving market conditions based on our simulations.
Arbitrum
USDC
The supply and borrow cap for USDC on Arbitrum V3 are currently at 100% and 96% utilization.
We recommend doubling the supply and borrow caps to 128M and 120M, respectively.
ARB
The supply cap for ARB on Arbitrum V3 is currently at 100% utilization.
Utilizing our supply cap methodology and given the debt ceiling set, and borrow distribution against ARB, we do not observe excess risk when increasing the supply cap for ARB on Arbitrum. We recommend doubling the supply cap to 40M ARB.
Specification
| Chain | Asset | Current Supply Cap | Recommended Supply Cap | Current Borrow Cap | Recommended Borrow Cap |
|---|---|---|---|---|---|
| Arbitrum | USDC | 64,000,000 | 128,000,000 | 60,000,000 | 120,000,000 |
| Arbitrum | ARB | 20,000,000 | 40,000,000 | 16,500,000 | No Change |
Next Steps
Once we receive feedback from @Gauntlet on the above recommendations, we will move forward to 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
