Summary
A proposal to:
- Increase LBTC’s supply caps on the Ethereum Core instance.
LBTC (Ethereum Core)
The supply cap for LBTC has reached 100% utilization.
Supply Distribution
The supply of LBTC is somewhat concentrated, with the largest user accounting for 377 LBTC out of 800 total. However, the top three suppliers are all borrowing BTC-correlated assets against their collateral, significantly reducing the likelihood of liquidations.
Overall, uncorrelated borrowing is relatively limited, with USDC being the most popular uncorrelated debt asset.
Liquidity
LBTC’s liquidity against USDC has been relatively stable and is sufficient to support a supply cap increase.
Recommendation
Given user behavior and on-chain liquidity, we recommend doubling the supply cap.
Specification
| Instance | Asset | Current Supply Cap | Recommended Supply Cap | Current Borrow Cap | Recommended Borrow Cap |
|---|---|---|---|---|---|
| Ethereum Core | LBTC | 800 | 1,600 | 1 | - |
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