Increase WETH Borrow Cap
Overview
A proposal to:
- Increase borrow cap for WETH from 4,000 to 8,000
The recommendation below was made utilizing Chaos Labs’ supply and borrow cap methodologies and after analyzing user positions for each asset.
Analysis
WETH has nearly reached its borrow cap following a surge in new borrows throughout April.
Many of the top borrowers are looping WETH with itself, putting these positions at low risk of liquidation.
Increasing the borrow cap will likely increase the supply APY, encouraging new deposits and growing the overall market.
Recommendations
| Asset | Current Borrow Cap | Recommended Borrow Cap |
|---|---|---|
| WETH | 4,000 | 8,000 |