Summary
A proposal to:
- Increase BAL’s supply cap on the Ethereum Core pool.
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.
Motivation
BAL (Ethereum Core)
BAL’s supply cap utilization has reached 100% again.
Supply Distribution
BAL’s supply is highly concentrated in a single address, posing a significant concentration risk. However, since this user maintains a strong health score of 2.81 and actively manages their position, there is no immediate risk of concern.
If this user’s borrowing activity increases rapidly or their health score declines significantly, we will proactively implement risk mitigation measures to address the elevated concentration risk.
Liquidity
BAL’s liquidity has remained stable over the past three months, currently allowing a 200K BAL sell with less than 4% price slippage, supporting a supply cap increase.
Recommendation
Given on-chain liquidity and user positions, we recommend increasing the supply cap to 4,000,000.
Specification
| Market | Asset | Current Supply Cap | Recommended Supply Cap | Current Borrow Cap | Recommended Borrow Cap |
|---|---|---|---|---|---|
| Ethereum Core | BAL | 3,000,000 | 4,000,000 | 700,000 | - |
Disclaimer
Chaos Labs has not been compensated by any third party for publishing this recommendation.