[ARFC] - Chaos Labs Risk Stewards - Increase Supply Caps on V3 Ethereum, Arbitrum and Optimism - 12.26.2023

Response to Chaos Recommendations

Per Gauntlet’s supply and borrow cap methodology, we support the recommended cap increases. Gauntlet supports a higher cap increase of 100k for rETH on Ethereum.

Asset Chain ID Current Supply Cap New Supply Cap Current Borrow Cap New Borrow Cap
rETH Ethereum 60,000 100,000 19,200 No Change
rETH Arbitrum 3,400 5,100 1360 No Change
LINK Optimism 210,000 235,000 84,000 No Change
CRV Ethereum 7,500,000 10,000,000 5,000,000 No Change

Based on the communities’ preference for aggressive caps for LINK. Gauntlet supports the recommendation of 235k based on across chain liquidity. 25% DEX slippage for LINK on OP chain is currenlty at 43k.

Gauntlet recommends increasing the supply cap to 100k based on user positions and on-chain liquidity. rETH’s collateral usage on the Ethereum v3 market is near $43M with most of the large debt positions not borrowing WETH. As such, Gauntlet will continue to monitor rETH positions post cap increase.

Link to dashboard

With CRV having a debt ceiling of $1M, Gauntlet supports the increase of supply cap to 10M based on the limited exposure of CRV as collateral and overall ample cross chain liquidity for CRV.