Summary
A proposal to:
- Increase wstETH’s borrow cap on the Base instance
- Increase weETH’s supply cap on the Base instance
wstETH (Base)
wstETH has reached 100% borrow cap utilization.
Borrow Distribution
Borrows are somewhat concentrated, with the largest borrower using WETH as collateral, putting the position at limited liquidation risk.
wstETH had previously been used primarily as debt against ezETH, with the newest and largest borrower currently utilizing WETH as collateral.
Recommendation
Given on-chain liquidity and user behavior, we recommend doubling the borrow cap.
weETH (Base)
weETH has reached 77% supply cap utilization while its borrow cap is fully utilized.
Supply Distribution
Its supply on Base is well-distributed, with the largest user accounting for about $13.5M.
WETH represents virtually all of the value borrowed against weETH, reducing the risk in the market because of their correlation.
Recommendation
Given on-chain liquidity and user behavior we recommend increasing the supply cap to 100,000.
Specification
| Instance | Asset | Current Supply Cap | Recommended Supply Cap | Current Borrow Cap | Recommended Borrow Cap |
|---|---|---|---|---|---|
| Base | wstETH | 18,000 | - | 2,080 | 4,000 |
| Base | weETH | 80,000 | 100,000 | 1 | - |
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