title: [ARFC] TokenLogic GHO Stewards - GHO Borrow Cap Update 02/06
author: @TokenLogic
created: 2025-02-06
Summary
This publication proposes increasing the GHO Borrow Cap on Core by 5M, from 165M to 170M, by the GHO Stewards.
Motivation
Amid current market conditions, GHO has sustained steady growth, recently reaching its 165M borrowing cap. Strong demand, driven by attractive yield opportunities in GHO liquidity pools and the safety module, has further reinforced its adoption. To accommodate this demand, this proposal recommends a measured 5M increase to the borrow cap.
This week, stkGHO supply reached a new all-time high, with a market capitalization of 127.8M, representing 70% of all issued GHO. This growing demand is largely driven by declining funding rates and broader market uncertainty. In this environment, users seek yield in stablecoins and resilient assets—an area where stkGHO excels by offering returns in both GHO and AAVE.
Additionally, the launch of Balancer V3 this week marked the beginning of the migration of GHO pools from Balancer V2 to V3. This transition has been highly successful, with the newly introduced 3Pool and GHO/PYUSD pool collectively reaching 18.8M in TVL. Notably, this growth has not significantly drained liquidity from the V2 pool, which still holds 11.45M in TVL. This indicates not just a migration effort but also a net increase in demand for GHO.
The GHO peg remains robust, as evidenced by the liquidity distribution in the tightly concentrated Maverick pool, where USDC accounts for 70% of the total liquidity.
Recommendation
The growing demand for stkGHO, the success of newly launched liquidity pools, and current market conditions serve as strong catalysts supporting the proposed borrow cap increase of 5M from 165M to 170M.
The GHO Stewards will continue to closely monitor market conditions to evaluate the need for future adjustments.
Specification
The GHO Supply Cap is to be revised as follows:
| Description | Current | Proposed | Change |
|---|---|---|---|
| Supply Cap | 165M | 170M | +5M |
This proposal is to be implemented by the GHO Stewards.
Disclosure
TokenLogic does not receive any payment for this proposal.
Next Steps
The GHO Stewards will implement this proposal.
Copyright
Copyright and related rights waived via CC0.