A proposal to track adjustments to the GHO borrow cap.
Motivation
With the GHO Stewards permissions in place, this thread is to track adjustments to the GHO Borrow Cap and grant visibility to the Aave Community.
Specification
As the first proposed adjustment, the GHO borrow cap is to be increased in 1M.
Description
Current (%)
Proposed (%)
Delta
Borrow cap
46M
47M
1M
Next Steps
We will move forward and implement these updates via the GHO Steward process. We will closely monitor market behavior and evaluate this decision with every increase.
Disclaimer
Chaos Labs, ACI, TokenLogic and karpatkey have not been compensated by any third party for publishing this ARFC.
A proposal to track adjustments to the GHO borrow cap.
Motivation
With the GHO Stewards permissions in place, this thread is to track adjustments to the GHO Borrow Cap and grant visibility to the Aave Community.
Specification
As the first proposed adjustment, the GHO borrow cap is to be increased in 1M.
Description
Current (%)
Proposed (%)
Delta
Borrow cap
48M
50M
2M
Next Steps
We will move forward and implement these updates via the GHO Steward process. We will closely monitor market behavior and evaluate this decision with every increase.
Disclaimer
Chaos Labs, ACI, TokenLogic and karpatkey have not been compensated by any third party for publishing this ARFC.
Is the current adjustment strategy regarding the upper limit of GHO too conservative? If you want to reach the upper limit of US$1 billion, how long will it take to adjust? Will it take many years at the current pace? GHO currently only ranks 31st in terms of issuance in the entire stablecoin market. How can GHO develop rapidly and allow more people to use it? Is it a more important issue?
In the past GHO struggled with peg issues. To counter them the GLC was established and is closely monitoring how and where GHO is being used. To make sure it is staying at peg, the cap has to be opened step by step and then again be monitored to be sure everything is fine.
The higher the mcap of GHO will be, the bigger the cap raises can be too. As it is getting more stable and more liquidity.
So in the beginning it may be that the cap raises are small but the higher it gets, the bigger the cap raises will be. And soon there will be GHO on a L2 (which is currently being voted on). This will make sure GHO can reach 70-100m pretty fast.
This publication proposes increasing the GHO Borrow Cap from 50M to 52M.
Motivation
With the GHO Stewards permissions in place, this thread is to track adjustments to the GHO Borrow Cap and grant visibility to the Aave Community.
Specification
As the first proposed adjustment, the GHO borrow cap is to be increased in 2M.
Description
Current (%)
Proposed (%)
Delta
Borrow cap
50M
52M
2M
Next Steps
The GHO Stewards will revise the GHO Borrow Cap to 52M and closely will closely monitor market behaviour and evaluate this decision with every increase.
Disclaimer
Chaos Labs, ACI, TokenLogic and karpatkey have not been compensated by any third party for publishing this ARFC.
This publication proposes increasing the GHO Borrow Cap from 52M to 54M.
Motivation
With the GHO Stewards permissions in place, this thread is to track adjustments to the GHO Borrow Cap and grant visibility to the Aave Community.
Specification
As the first proposed adjustment, the GHO borrow cap is to be increased in 2M.
Description
Current (%)
Proposed (%)
Delta
Borrow cap
52M
54M
2M
The increase is to be implemented when practical to do so.
Next Steps
The GHO Stewards will revise the GHO Borrow Cap to 54M and closely will closely monitor market behaviour and evaluate this decision with every increase.
Disclaimer
Chaos Labs, ACI, TokenLogic and karpatkey have not been compensated by any third party for publishing this ARFC.
Once again, if the existing risks of GHO are controlled, the issuance of GHO should be rapidly increased in order to occupy more market share, so that more people can use GHO, and take advantage of this bull market to obtain more users. In the bear market, you will increase the upper limit of 1 billion at a time, which is not necessarily needed by anyone。
I really don’t understand the difference between increasing the cap by $1 million each time and increasing the cap by $100 million. Is it to increase the workload?
This publication informs the Aave community that the USDC to GHO and USDT to GHO Fee will be reduced from 0.20% to 0.00%.
Motivation
With the new version of the GSM Stewards deployed, the USDC to GHO and USDT to GHO Fee can be reduced to 0.00%. Upon reducing the GHO Mint Fee to zero, whenever GHO trades above peg swaps will be routed via the GSM. Provided the cap for each GSM has not been reached, this will result in USDC and USDT inflows to the respective GSM.
Specification
The GHO Stewards will perform the following:
GSM Parameter
Current Value
Proposed Value
USDC to GHO Fee
0.20%
0.00%
USDT to GHO Fee
0.20%
0.00%
Next Steps
The GHO Stewards will revise to 0.00% the fee for minting GHO via the USDC and USDT GSMs.
Disclaimer
Chaos Labs, ACI, TokenLogic and karpatkey have not been compensated by any third party for publishing this ARFC.
In response to recent market events, this publication proposes reducing the GHO Borrow Rate by 100bps.
Motivation
In response to following prevailing conditions:
Stable coin borrow rates decreasing
Demand for GHO debt easing
Merit Rewards APR being diluted
The GHO Stewards intend to reduce the Borrow Rate by 100 bps.
The chart below shows the GHO, USDC and USDT borrow rates from the beginng of April.
GHO’s borrow rate has remained consistently higher than the broader market on Aave v3 with the majority of this premium being offset by the Merit program. The net borrow rate for GHO is now higher than the broader market conditions.
As a result, the GHO Stewards propose reducing the Borrow Rate by 100 bps.
Specification
Implement the following changes:
Description
Current APR (%)
Proposed APR (%)
Non Discounted Borrow Rate
12.00%
11.00%
stkAAVE Discount
30.00%
30.00%
Discounted Borrow Rate
8.4%
7.70%
Do note the above table does not include any compounding.
Disclosure
TokenLogic, ACI, Chaos Labs and karpatkey receive no payment for this proposal. TokenLogic, ACI and karpatkey are both delegates within the Aave community.
In response to recent market events, this publication proposes reducing the GHO Borrow Rate by 100bps.
Motivation
With the GHO Stewards permissions in place, this thread is to track adjustments to the GHO Borrow Rate and grant visibility to the Aave Community.
Borrowing rates for USDC and USDT are meaningfully lower than the current non-discounted GHO borrow rate. The image below highlights the relative cost of GHO debt relative to USDC and USDT. The GHO Stewards intend to reduce the GHO Borrow Rate by 100 bps periodically, until GHO’s Borrow Rate aligns with broader market conditions.
Specification
The GHO Stewards are to reduce the Borrow Rate by 100 bps.
Description
Current (%)
Proposed (%)
Delta
Borrow Rate
11.00%
10.00%
-100 bps
Next Steps
We will closely monitor market behavior and evaluate this decision with every adjustment.
Disclaimer
Chaos Labs, ACI, TokenLogic and karpatkey have not been compensated by any third party for publishing this ARFC.
In response to recent market events, this publication proposes reducing the GHO Borrow Rate by 100bps.
Motivation
With the GHO Stewards permissions in place, this thread is to track adjustments to the GHO Borrow Rate and grant visibility to the Aave Community.
Borrowing rates for USDC and USDT are meaningfully lower than the current non-discounted GHO borrow rate. The image below highlights the relative cost of GHO debt relative to USDC and USDT. The GHO Stewards intend to reduce the GHO Borrow Rate by 100 bps periodically, until GHO’s Borrow Rate aligns with broader market conditions.
This is the second implementation of the -100 bps adjustment.
Specification
The GHO Stewards are to reduce the Borrow Rate by 100 bps.
Description
Current (%)
Proposed (%)
Delta
Borrow Rate
10.00%
9.00%
-100 bps
Next Steps
We will closely monitor market behavior and evaluate this decision with every adjustment.
Disclaimer
Chaos Labs, ACI, TokenLogic and karpatkey have not been compensated by any third party for publishing this ARFC.
In response to recent market events, this publication proposes reducing the GHO Borrow Rate by 100bps.
Motivation
With the GHO Stewards permissions in place, this thread is to track adjustments to the GHO Borrow Rate and grant visibility to the Aave Community.
Borrowing rates for USDC and USDT are meaningfully lower than the current non-discounted GHO borrow rate. The image below highlights the relative cost of GHO debt relative to USDC and USDT. The GHO Stewards intend to reduce the GHO Borrow Rate by 100 bps periodically, until GHO’s Borrow Rate aligns with broader market conditions.
This is the third implementation of the -100 bps adjustment.
Specification
The GHO Stewards are to reduce the Borrow Rate by 100 bps.
Description
Current (%)
Proposed (%)
Delta
Borrow Rate
9.00%
8.00%
-100 bps
Next Steps
We will closely monitor market behavior and evaluate this decision with every adjustment.
Disclaimer
Chaos Labs, ACI, TokenLogic and karpatkey have not been compensated by any third party for publishing this ARFC.
