Summary
A proposal to increase the supply cap for WETH and CRV on Aave V3 Polygon.
Motivation
Following the community approval of the AIP to update IR curve parameters on V2 Polygon, aimed at encouraging users to migrate positions to V3, we propose increasing the supply caps for WETH and CRV to allow enough room for the V2 positions.
For all other assets, the current caps are sufficient to accommodate the transfer of all V2 positions.
| Asset | V2 Supply | V3 Available | V3 Current Supply | V3 Supply Cap | Recommended Supply Cap |
|---|---|---|---|---|---|
| wETH | 38,090 | 22,160 | 27,840 | 50,000 | 75,000 |
| CRV | 140,860 | 0 | 1,130,000 | 1,130,000 | 1,400,000 |
The recommendations provided in this proposal were derived using Chaos Labs’ Supply and Borrow Cap Methodology. Below are the data considerations and recommendations for all assets:
WETH
CRV
Given the current market conditions and LT configuration on V3 Polygon, we propose a modest increase in the supply cap to facilitate the migration of positions from V2. In the near future, we aim to further decrease the LTs for CRV, which would provide room for a more substantial increase in the supply cap.
Specification
| Chain | Asset | Current Supply Cap | Recommended Supply Cap | Current Borrow Cap | Recommended Borrow Cap |
|---|---|---|---|---|---|
| Polygon | WETH | 50,000 | 75,000 | 14,795 | No Change |
| Polygon | CRV | 1,130,000 | 1,400,000 | 900,190 | No Change |
Next Steps
Once we receive feedback from @Gauntlet on the above recommendations, we will be able to move forward to 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