Summary
A proposal to:
- Increase the supply cap of PT-sUSDe-7MAY2026 on the Ethereum Core Instance
- Increase the supply cap of XAUt on the Ethereum Core instance.
- Decrease the supply cap of wsrETH on the Mantle Instance
All cap increases are backed by Chaos Labs’ risk simulations, which consider user behavior, on-chain liquidity, and price impact, ensuring that higher caps do not introduce additional risk to the platform.
PT-sUSDe-7MAY2026
PT-sUSDe-7MAY2026 has reached its supply cap of 200 million tokens. Given that the cap has been reached in a relatively short period, the market is showing strong demand.
Supply Distribution
The supply distribution of PT-sUSDe-7MAY2026 is highly concentrated, with the top 5 users accounting for over 85% of the market. As shown in the plot below, suppliers are borrowing a range of stablecoins, with USDe and USDT holding dominant positions.
As is common in such markets, health factors cluster near 1.02 as users aim to maximize leverage. Given the substantial correlation between debt and collateral assets, the positions present minimal liquidation risk.
Market
The implied yield of PT-sUSDe-7MAY2026 is currently 4.34%. Given the muted yields which are only marginally higher than the stablecoin borrow rate on Aave, we expect the demand for the asset to be limited compared to previous PT instances.
Liquidity
At the time of writing, PT-sUSDe-7MAY2026 liquidity within the Pendle AMM is sufficient to execute a sell order of 20 million tokens with a price impact of under 1%. Given the current supply cap and the high correlation between debt and collateral assets, these liquidity levels support an increase in the asset’s supply cap.
Recommendation
Given the strong lending demand for the asset, substantial on-chain liquidity, and minimal liquidation risk, we recommend increasing the supply cap for PT-sUSDe-7MAY2026 on the Ethereum Core instance.
XAUt
XAUt has reached 90% of its supply cap following the recent increase of its debt ceiling, combined with a strong price growth from the underlying asset.
Its debt ceiling, following a gradual increase to $50M, is currently 86% utilized, demonstrating strong demand of XAUt collateral usage.
Supply Distribution
The distribution of XAUt supplies is heavily concentrated, with the biggest waller representing over 50% of the total supply in the market. However, the top suppliers mantain conservative positions, with health scores over 1.5, while using a collateral asset that has historically presented limited volatility.
Recommendation
Given the strong collateral demand for the asset and safe user positioning, we recommend increasing the supply cap for XAUt on the Ethereum Core instance.
wrsETH
Following the recent deployment of the Aave v3 Mantle Instance, and after receiving communication from the Kelp team about a reduced target DEX liquidity pool, we recommend adjusting the supply caps of the assets to reflect the expected market depth.
Liquidity
While liquidity on the market is yet to be provided, Kelp’s communications indicate that the deployed liquidity for wrsETH/WETH pools on the Mantle Instance will be reduced from $8-10M to $2M.
Recommendation
Given these updated liquidity figures, we revise the previously recommended 18,000 wrsETH supply cap to 6,000 wrsETH.
Specification
| Instance | Asset | Current Supply Cap | Recommended Supply Cap |
|---|---|---|---|
| Ethereum Core | PT-sUSDe-7MAY2026 | 200,000,000 | 400,000,000 |
| Ethereum Core | XAUt | 20,000 | 30,000 |
| Mantle | wrsETH | 18,000 | 6,000 |
Next Steps
We will move forward and implement these updates via the Risk Steward process.
Disclosure
Chaos Labs has not been compensated by any third party for publishing this AGRS recommendation.
Copyright
Copyright and related rights waived via CC0.