Summary
A proposal to increase the supply and/or borrow caps on the following market:
- USDC on Base
USDC (Base)
Motivation
USDC has reached its supply and borrow caps on Base following consistent deposit and lending growth in recent months.
Supply and Borrow Distribution
USDC’s supply and borrows are concentrated, with the top supplier representing more than 50% of the total supply and borrow market. However, given that all 10 of the top 10 suppliers are “looping” — borrowing USDC against their USDC collateral — there is limited risk in this market.
Collateral at risk would exceed $250,000 if USDC’s price were to depeg dramatically to $0.50. However, USDC has deep liquidity on Base and its price is a function of its proven, audited reserves. If another depeg on the order of the Silicon Valley Bank collapse were to occur (a fall to $0.87), just $1,300 of USDC collateral would be liquidated on Seamless.
Recommendation
Given on-chain liquidity and user distribution, we recommend increasing both the supply and borrow caps by 30M each.
Specification
| Chain | Asset | Current Supply Cap | Recommended Supply Cap | Current Borrow Cap | Recommended Borrow Cap |
|---|---|---|---|---|---|
| Base | USDC | 60,000,000 | 90,000,000 | 54,000,000 | 84,000,000 |