Summary
A proposal to:
- Increase osETH’s supply cap on the Aave Core instance.
All 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.
osETH (Ethereum Core)
The supply cap for osETH have reached 90% utilization.
Supply Distribution
The largest supplier of osETH holds around 23% of the total supply, posing a minor concentration risk. However, since this user is borrowing WETH, the risk of liquidation is significantly reduced. The remaining top suppliers are also borrowing WETH, further minimizing liquidation risk at this time.
The largest borrowed asset against osETH is WETH, accounting for approximately 98.72% of the borrowed asset distribution, significantly reducing the likelihood of large-scale liquidations.
Liquidity
osETH’s liquidity has remained stable, with a 8K osETH sell currently incurring less than 4% price slippage.
Recommendation
Given user behavior and on-chain liquidity, we recommend increasing the supply cap by 50%.
Specification
| Instance | Asset | Current Supply Cap | Recommended Supply Cap | Current Borrow Cap | Recommended Borrow Cap |
|---|---|---|---|---|---|
| Ethereum Core | osETH | 80,000 | 120,000 | 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