title: [ARFC] TokenLogic GHO Stewards - GHO Borrow Cap Update 02/06
author: @TokenLogic
created: 2025-02-09
Summary
This publication proposes increasing the GHO Borrow Cap on Core by 7M, from 170M to 177M, by the GHO Stewards.
Motivation
GHO continues to expand, hitting its 170M borrowing cap minutes after raising the cap. Its adoption has been fueled by strong demand, largely driven by competitive yields in liquidity pools and the safety module. Additionally, GHO remains the most cost-effective stablecoin debt, as illustrated in the graphic below. With its upcoming launch on Base, new demand is expected to surge, supported by ALC’s ongoing integrations and incentive programs. In response to this momentum, this proposal recommends raising the borrow cap by an additional 7M.
The supply of stkGHO continues to grow, reaching yet another all-time high with a market capitalization of $128.8M, now accounting for 68.6% of all issued GHO.
Meanwhile, the newly launched 3pool on Balancer v3 has attracted over $13.7M in TVL, achieving a more balanced distribution—only 41.6% of the pool consists of GHO, compared to 52.6% in the v2 pool. This healthier allocation signals sustained demand for GHO within the pool, ultimately reinforcing its peg.
GHO is also gaining momentum on Curve with the launch of the GHO/USR pool, which has already surpassed $1.5M in TVL. This pool is expected to grow further, driven by a special points program from Resolv and upcoming integrations that will allow for more composability on top of the LP token. Additional details will be revealed by ALC and its partners later this week.
The GHO peg remains strong, supported by the liquidity distribution in the tightly concentrated Maverick pool, where USDC constitutes 75% of total liquidity.
GHO is set to launch on Base tomorrow (February 10th) with an initial borrow cap of 2.25M units on Aave’s Base instance. This marks the beginning of a gradual expansion, with measured growth expected over time enabling integration and supply sinks to be built along the way.
Shortly after, a new stataUSDC GSM will be introduced with zero swap fees, even on the burn side and an initial 10M exposure cap— a key factor expected to drive GHO demand on the chain.
This rollout will follow the proven Balancer v3 playbook, which saw the new 3pool become the largest on the DEX within just 24 hours and still growing.
Additionally, the introduction of the AAVE/WETH pool on Aerodrome should further incentivize all types of Aave users to explore the expanding opportunities within the Aave ecosystem on Base.
Recommendation
The increasing demand for GHO, the strong performance of newly launched liquidity pools, and the imminent deployment on Base all reinforce the need for a borrow cap adjustment. To accommodate this momentum, the proposal suggests raising the cap from 170M to 177M.
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 | 170M | 177M | +7M |
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.