Summary
Following a reassessment of current market conditions, we propose the following adjustments to the syrupUSDC parameters on the Core Instance:
- Increase the syrupUSDC supply cap at launch
- Exclude USDS from the Stablecoin E-Mode configuration
These recommendations are informed by observed shifts in market dynamics—namely, a sustained decline in USDS utility and lending activity and a substantial improvement in the depth and stability of syrupUSDC liquidity.
E-Mode Adjustment
Over the past 90 days, USDS supply on the Core Instance has declined from 150 million to 60 million, representing a more than 60% reduction. Concurrently, borrowing volumes have contracted by approximately 70%, indicating diminished market demand and utility for USDS within the ecosystem. Given this sustained downward trajectory, we recommend excluding USDS from the E-Mode configuration.
Supply Cap Adjustment
During the initial assessment conducted in July 2025, syrupUSDC liquidity exhibited substantial variability in both depth and trading volume across major pools. Subsequent months have demonstrated improved market maturity, characterized by consistent depth and peg stability, along with reduced volatility. At the time of writing, a sell order of 15 million syrupUSDC for USDC would incur a conservative 0.2% slippage, reflecting robust on-chain liquidity. These conditions support an expansion of the supply cap to 150 million tokens.
Recommendation
We recommend excluding USDS from E-Mode due to declining demand and increasing the syrupUSDC supply cap to 150 million to reflect the asset’s persistent and deep liquidity profile.
Updated Specification
| Parameter | Value |
|---|---|
| Isolation Mode | No |
| Borrowable | No |
| Collateral Enabled | Yes |
| Supply Cap | 150,000,000 |
| Borrow Cap | - |
| Debt Ceiling | - |
| LTV | 73% |
| LT | 78% |
| Liquidation Bonus | 6% |
| Liquidation Protocol Fee | 10% |
| Variable Base | - |
| Variable Slope1 | - |
| Variable Slope2 | - |
| Uoptimal | - |
| Reserve Factor | - |
E-Mode
| Parameter | Value | Value | Value |
|---|---|---|---|
| Asset | syrupUSDC | USDC | USDT |
| Collateral | Yes | No | No |
| Borrowable | No | Yes | Yes |
| Max LTV | 90.00% | - | - |
| Liquidation Threshold | 92.00% | - | - |
| Liquidation Bonus | 4.00% | - | - |
Disclaimer
Chaos Labs has not been compensated by any third party for publishing this recommendation.
Copyright
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