[ARFC] - Supply and Borrow Caps Update - LUSD - V3 Ethereum

Risk
1

Summary

This ARFC proposes to increase the LUSD supply cap to 6M and the borrow cap to 2.4M.

Motivation

LUSD is currently at ~96% of its supply cap and ~89% of its borrow cap on Aave V3 Ethereum. This increase in supply and borrow has happened over the past few days following the de-peg events of several stablecoins, including LUSD.

Given the on-chain liquidity levels, current conservative caps set, and the fact that LUSD is a non-collateral asset, we recommend doubling the supply and borrow cap.

Screen Shot 2023-03-14 at 8.41.03 PM
Screen Shot 2023-03-14 at 8.41.03 PM942Ă—884 58.4 KB

The proposal represents a 100% increase from the current caps, making this ARFC compliant with the “direct-to-AIP” framework.

Specification

Ticker: LUSD (LUSD)

Contract Address: 0x5f98805A4E8be255a32880FDeC7F6728C6568bA0

Parameter Current Proposed
Supply Cap 3M 6M
Borrow Cap 1.2M 2.4M
3 Likes
2

We have published AIP-181 for community members to vote on, starting in 24h.

Thank you in advance for your participation in the vote.