Hey Community,
Maintaining the caps on the protocol at current levels is an inefficient use of capital and is impeding any growth of the protocol. Looking at the markets, the borrowing caps are pretty restrictive with the market currently having a borrow usage of 1.7%.
Furthermore, these caps are restricting new suppliers and borrowers from taking advantage of the Seam token rewards. Basically the high APY earnings are only being given to a select few and is not generating a further growth for the protocol. The protocol is basically wasting all those Seam tokens with their cap restriction.
All these assets are bluechip and have substantial liquidity across multiple chains. Here are some slippage numbers via 1inch that should inform the community to push cap increases as soon as possible:
DAI Slippage
3.11% slippage for 1.5M with a liquidation penalty of 5%.
USDC Slippage
3.59% slippage for 1.5M with a liquidation penalty of 5%
ETH Slippage
Here are recommendations for the community to consider to get this protocol active and earning reserves:
Recommendation
DAI Supply Cap: 100K to 1.5M
DAI Borrow Cap: 50k to 1.35M
USDC Supply Cap: 200K to 1.5M
USDC Borrow Cap: 150k to 1.35M
WETH Borrow Cap: 254 to 1k
USDbC Borrow Cap: 150k to 1.35M
cbETH Borrow Cap: 121 to 500