[ARFC] Polygon & Arbitrum v3 Supply Cap Update 19.05.2023

I would like to see this increased but:

  1. There is nothing stopping these users from paying back their ETH and then taking USD/other denominated assets meaning we’ve got a high supply cap and the risk is increased.
  2. I don’t believe that using the supply on a given network provides any solid risk analysis here given that the 4650 wstETH on Arbitrum was bridged from Ethereum 2 days before this passed.

On the second point it feels somewhat like a fools errand to be basing limits using the circulating supply on a network given that it is so easy for any user to increase or decrease this supply by bridging. Available liquidity feels like the better metric for derivation of the cap.

Personally I’m desparate to see this limit be increased as much as possible but I believe there should be two supply caps, one for ETH denominated borrowing (which basically will never be liquidated) and another for BTC/USD.