Overview
A proposal to:
- Increase supply and borrow caps for USDC
The recommendations below were made utilizing Chaos Labs’ supply and borrow cap methodologies and after analyzing user positions for each asset.
Analysis
The supply cap and borrow cap for USDC on Base are currently utilized at 82% and 84%, respectively.
Supply & Borrow Distribution
In our previous recommendation, we offered a conservative approach of raising the supply caps from 8M to 16M and borrow caps from 6M to 12M. We’ve observed the user behavior since this recommendation. Given that the supply and borrow patterns for USDC have been consistent, and is primarily concentrated in a single wallet, along with a few new accounts supplying USDC and WETH and borrowing USDC, we do not perceive any additional risk and thus support increasing the supply and borrow caps further.
Additionally, we have observed sufficient liquidity of USDC on Base to support our recommendation to increase the supply and borrow caps.
Recommendations
| Asset | Current Supply Cap | Recommended Supply Cap | Current Borrow Cap | Recommended Borrow Cap |
|---|---|---|---|---|
| USDC | 16,000,000 | 32,000,000 | 12,000,000 | 24,000,000 |