Summary
A proposal to:
- Increase cEUR’s supply cap on the Celo instance.
- Increase CELO’s supply cap on the Celo instance.
cEUR (Celo)
cEUR’s supply cap utilization has reached 94%, while its supply cap utilization stands at 4%.
Supply Distribution
The supply of cEUR presents limited liquidation risk at this time, as all top suppliers currently have no borrowing activity.
Recommendation
Given the user behavior, we recommend increasing the supply cap to 160K cEUR.
Celo (Celo)
The supply cap utilization of USDC.e has reached 95%, while its borrow cap utilization currently stands at 50%.
Supply Distribution
The supply of USDC.e shows concentration risk, with the top supplier holding 45% of the total distribution. However, as this supplier currently has no active borrowing positions, it poses no liquidation risk at this time.
The remaining top suppliers either have no borrowing activity or maintain a high health score, indicating limited liquidation risk.
The largest borrowed asset against CELO is cUSD, which accounts for 94% of the total distribution.
Liquidity
CELO’s liquidity has remained stable over the week, currently, a 1M CELO sell incurs less than 3% price slippage, supporting a supply cap increase.
Recommendation
Given user behavior and on-chain liquidity, we recommend increasing the supply cap to 3M CELO.
Specification
| Instance | Asset | Current Supply Cap | Recommended Supply Cap | Current Borrow Cap | Recommended Borrow Cap |
|---|---|---|---|---|---|
| Celo | cEUR | 80,000 | 160,000 | 72,000 | - |
| Celo | CELO | 1,500,000 | 3,000,000 | 100,000 | - |
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 ARFC.
Copyright
Copyright and related rights waived via CC0