Overview
Ahead of the launch of the GSM, Chaos Labs has reviewed a list of candidate assets and explored the impact of various levels. Our recommendation is to launch GSM with USDC and USDT with an exposure cap of 5M each.
Exposure Cap and Fees To Accommodate Growth
As GHO is still in its early growth stages, with a market cap of $20M at the time of writing, we recommend setting the total exposure caps to 10M for both USDC and USDT together. While this accounts for 50% of the circulating supply, which is much beyond the desired ratio, caps should be set with a forward-looking approach to accommodate for growth. As the main focus for GHO right now is to grow quickly, we recommend setting both Buy Fee and Sell Fee to 0, as it is unlikely to generate significant yield in the short term and is more likely to promote better the peg stability of GHO, which is of greater importance at this stage.
A Conservative Approach to Assets and Pricing
As with other recommendations for new deployments, we take a prudent approach in setting the initial parameters. Therefore, we recommend starting off with USDC and USDT, which account together for more than 85% of the total market cap and over 85% of the trading volume of all stablecoins. Given the peg stability of USDC and USDT, we recommend starting off with a Price Ratio of 1 for both.
Recommendations
| Asset | Exposure Cap | Price Ratio | Buy Fee | Sell Fee |
|---|---|---|---|---|
| USDC | 5M | 1 | 0 | 0 |
| USDT | 5M | 1 | 0 | 0 |