Summary
A proposal to:
- Increase cbBTC’s supply cap on Ethereum.
- Increase cbBTC’s supply cap on Base.
Motivation
cbBTC (Ethereum)
cbBTC has reached 100% supply cap utilization following rapid deposits after listing.
Liquidity
On-chain liquidity has improved significantly since our previous recommendation. For example, a 450 cbBTC to WETH swap can be completed at 10% slippage. As such, we recommend an increase in the supply cap.
Recommendation
Given on-chain liquidity, we recommend increasing the supply cap; there is no need to increase the borrow cap at this time.
cbBTC (Base)
cbBTC has nearly reached its supply cap on Base, while its borrow cap is lightly utilized.
Liquidity
As on Ethereum, cbBTC’s DEX liquidity has improved rapidly since its launch. Currently, a 350 cbBTC to WETH swap is possible at just 10% slippage. Given this, we recommend a supply cap increase.
Recommendation
Given on-chain liquidity, we recommend increasing the supply cap.
Specification
| Chain | Asset | Current Supply Cap | Recommended Supply Cap | Current Borrow Cap | Recommended Borrow Cap |
|---|---|---|---|---|---|
| Ethereum | cbBTC | 450 | 900 | 45 | - |
| Base | cbBTC | 200 | 400 | 20 | - |
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