Chaos Labs - Risk Parameter Update - 08/29/24

Summary

A proposal to:

  • Increase FLOKI’s borrow cap on Venus’ BNB GameFi deployment.

Motivation

FLOKI (BNB GameFi)

FLOKI has reached 48% supply cap utilization on BNB GameFi, and its borrow cap is at 100% capacity.

Borrow Distribution

Most top FLOKI borrowers use USDT as collateral, with some also using FLOKI. The largest FLOKI borrower represents a significant portion of the total market, with borrowing activity concentrated among a few wallets. The high volatility of the borrowed asset presents a risk of liquidation, but the biggest positions maintain a conservative health score.

In aggregate, USDT represents 84.48% of the value backing FLOKI loans.

Recommendation

Given the conservative users’ behavior and the market liquidity, we recommend increasing the borrow cap to 4,000,000,000.

Specification

Chain Asset Current Supply Cap Recommended Supply Cap Current Borrow Cap Recommended Borrow Cap
BNB GameFi FLOKI 68,000,000,000 - 2,000,000,000 4,000,000,000
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