Summary
LlamaRisk supports onboarding USDG to the Aave V3 Arbitrum instance as a borrowable, non-collateral asset, consistent with its listings on Ethereum Core, Ink and X Layer. We recommend a 30M supply cap and a 27M borrow cap.
We assessed USDG as an already-listed asset on a new instance. The same three Paxos supply controllers, with the same limits and mint destinations, are configured on Ethereum, Ink and X Layer. The one Arbitrum-specific difference is an upgradeable bridge wrapper.
Besides the LayerZero bridge from Ethereum, Paxos mints USDG directly on Arbitrum. Since deployment, 47.30M has been minted outside the bridge, 1.55M has been burned outside it, and net bridge flow is −12.51M. Those sum to the 33.24M supply.
The full assessment is in its corresponding thread.
Aave V3 Specific Parameters
| Parameter | Recommendation |
|---|---|
| Borrowable | Yes |
| Collateral Enabled | No |
| Supply Cap | 30,000,000 |
| Borrow Cap | 27,000,000 |
| LTV | 0% |
| LT | 0% |
| Liquidation Bonus | 0% |
| Liquidation Protocol Fee | 10% |
| Reserve Factor | 10% |
| Base Variable Borrow Rate | 0% |
| Variable Slope 1 | 4.5% |
| Variable Slope 2 | 30% |
| Uoptimal | 90% |
| Flashloan Enabled | Yes |
| E-Modes | None |
Price Feed Recommendation
We recommend the Chainlink USDG/USD feed on Arbitrum with the stable price cap adapter, which bounds upward deviation at 4% ($1.04), consistent with USDG on Ethereum Core, Ink and X Layer. The feed has a 0.25% deviation threshold, wider than the 0.1% on Arbitrum USDC/USD and USDT/USD, a 24-hour heartbeat and a medium Chainlink risk tier.
Disclaimer
This review was independently prepared by LlamaRisk, a DeFi risk service provider funded in part by the Aave DAO. LlamaRisk is not directly affiliated with the protocol(s) reviewed in this assessment and did not receive any compensation from the protocol(s) or their affiliated entities for this work.
The information provided should not be construed as legal, financial, tax, or professional advice.