Summary
A proposal to increase the following caps on V3 Scroll:
- USDC - Supply and Borrow cap
- WETH - Supply Cap
Motivation
The supply cap for WETH and borrow cap for USDC on V3 Scroll are both currently at 100% utilization. The USDC supply cap is currently at 75% utilization.
As the Scroll deployment only recently launched and has limited historical data and usage, we do not utilize our stress testing methodology for this set of recommendations. Instead, we utilized our previous interim supply cap methodology, which can be found here.
Given the current usage across the deployment and liquidity on Scroll, we support doubling the WETH supply cap and the USDC Supply and Borrow cap.
User Analysis
WETH Supply Cap and USDC Borrow Cap
The majority of USDC debt is collateralized by WETH and wstETH. Concurrently, about 23% of all supplied WETH is being utilized as collateral to borrow USDC.
USDC Supply Cap
Only 1.8% of supplied USDC is being utilized as collateral to borrow WETH or wstETH.
Considering the enhanced on-chain liquidity and the underutilization of USDC as collateral, we propose doubling all specified supply and borrow caps.
Specification
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