Summary
A proposal to:
- Increase USDC’s supply cap on Aave’s Scroll deployment.
Motivation
USDC (Scroll)
USDC has reached 95% supply cap utilization on Scroll, and its borrow cap is at 45% capacity.
Supply Distribution
Many top USDC suppliers maintain deposit-only positions, with a few borrowing WETH or wstETH. The largest USDC supplier represents a significant proportion of the total market, contributing over 21% of total supply. The largest open positions have low-to-medium liquidation risk, as they are either supply-only or involve assets with moderate volatility.
Overall, WETH represents 81.14% of the value borrowed against USDC.
Recommendation
Given on-chain liquidity, as well as user distribution and behavior, we recommend increasing USDC’s supply cap by 50% and leaving its borrow cap unchanged.
Specification
| Chain | Asset | Current Supply Cap | Recommended Supply Cap | Current Borrow Cap | Recommended Borrow Cap |
|---|---|---|---|---|---|
| Scroll | USDC | 50,000,000 | 75,000,000 | 45,000,000 | - |
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