Summary
A proposal to:
- Increase RLUSD’s supply cap on the Ethereum Core instance.
- Increase osETH’s supply cap on the Ethereum Core 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.
RLUSD (Ethereum Core)
RLUSD has nearly reached it supply cap following new activity in the market.
Supply Distribution
Supply remains well distributed, with the largest three suppliers accounting for 63% of the total. The asset also cannot be used as collateral, significantly reducing the risk in this market.
Liquidity
RLUSD’s on-chain liquidity is strong; a 25M RLUSD to USDC swap can be completed at less than 0.5% price slippage.
Recommendation
Given user behavior and strong on-chain liquidity, we recommend doubling RLUSD’s supply cap.
osETH (Ethereum Core)
osETH has nearly reached its supply cap following new deposits into the market.
Supply Distribution
The supply of osETH is not highly concentrated, as the top four suppliers account for less than 50% of the total osETH supplied. All top suppliers are borrowing WETH, significantly reducing the risk of this market because of its use of a fundamental oracle.
New borrowing activity against osETH has been entirely denominated in WETH, again limiting the risk in this market.
Liquidity
osETH’s liquidity against stablecoins remains relatively strong, with a 10K osETH to USDT swap able to be completed at less than 7.5% price impact.
Recommendation
Taking into account user behavior and on-chain liquidity, we recommend increasing osETH’s supply cap.
Specification
| Instance | Asset | Current Supply Cap | Recommended Supply Cap | Current Borrow Cap | Recommended Borrow Cap |
|---|---|---|---|---|---|
| Ethereum Core | RLUSD | 150,000,000 | 300,000,000 | 40,000,000 | - |
| Ethereum Core | osETH | 260,000 | 350,000 | 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