Chaos Labs Risk Stewards - Decrease ZK Supply Cap and Debt Ceiling on Aave V3 ZkSync - 04.15.25

Summary

A proposal to:

  • Decrease ZK’s debt ceiling and supply cap.

ZK (ZKsync)

The ZKsync team has identified a compromised admin account that claimed $5M worth of ZK tokens that had gone unclaimed since the airdrop. The account then began swapping these tokens for ETH, driving down the price of ZK.

While this situation remains fluid, we recommend taking action to ensure the Aave protocol is properly protected.

ZK’s debt ceiling utilization utilization is currently at 31% and its supply cap utilization is at 37%; its borrow cap (just 20M) is 24% utilized.

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While the asset’s supply cap and debt ceiling currently pose no cause for significant concern, it is preferable for Aave to reduce any potential risk vectors.

Recommendation

While its debt ceiling is already relatively low, we recommend lowering the value to $250K to prevent new borrowing activity in the market. Additionally, we recommend lowering its supply cap to 150M to prevent significant new deposits.

Specification

Instance Asset Current Supply Cap Recommended Supply Cap Current Debt Ceiling Recommended Debt Ceiling
ZKSync ZK 288,000,000 150,000,000 $800,000 $250,000

Next Steps

We will move forward and implement these updates via the Risk Steward process.

Disclaimer

Chaos Labs has not been compensated by any third party for publishing this AGRS recommendation.

Copyright

Copyright and related rights waived via CC0

4 Likes

While the risk is pretty small I still agree to do this. Thanks for being that fast and updating us all in here.