Summary
A proposal to:
- Increase USDC’s supply cap on Venus’s ZkSync deployment.
All recommended increases are backed by Chaos Labs’ risk simulations, which consider the user behavior, on-chain liquidity, and price impact, ensuring that the higher cap does not introduce additional risk to the platform.
USDC (ZkSync)
USDC’s supply cap has reached 100% utilization, while it borrow cap utilization stands at 81%.
Supply Distribution
The supply distribution of USDC presents limited liquidation risks. 95% of total capital supplied in the market is collateralizing and borrowing USDC, mainly concentrated around the top two suppliers, reducing liquidation risks.
The largest borrowed asset against USDC is USDC itself, accounting for approximately 97% of the borrowed asset distribution, which significantly reduces liquidation risks.
Liquidity
USDC’s liquidity has been increasing over the past two weeks, with a 400K USDC sell currently incurring less than 4% slippage.
Recommendation
Given the user-behavior and on-chain liquidity, we recommend increasing the supply cap to 15M and the borrow cap to 13.5M.
Specification
| Market | Asset | Current Supply Cap | Recommended Supply Cap | Current Borrow Cap | Recommended Borrow Cap |
|---|---|---|---|---|---|
| ZkSync | USDC | 6,000,000 | 15,000,000 | 5,400,000 | 13,500,000 |
Disclaimer
Chaos Labs has not been compensated by any third party for publishing this recommendation.