Summary
A proposal to:
- Increase osETH’s supply cap on the Ethereum Core instance.
osETH (Ethereum Core)
The supply cap for osETH has reached 97% utilization.
Supply Distribution
The largest supplier of osETH holds approximately 36% of the total osETH supply, indicating a concentration risk. However, since this user is borrowing WETH, the risk of liquidation is significantly mitigated. Among the remaining top suppliers, all are either borrowing WETH or maintaining a high health score (>3.4), thereby presenting limited liquidation risk at this time.
The largest borrowed asset against osETH is WETH, accounting for approximately 97.61% of the borrowed asset distribution, significantly reducing the likelihood of large-scale liquidations.
Liquidity
osETH’s liquidity has remained relatively stable, with a 10K osETH sell currently incurring less than 7.5% price slippage.
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 | osETH | 40,000 | 80,000 | 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