# Chaos Labs - Risk Parameter Update - 2/25/25

**URL:** <https://community.venus.io/t/chaos-labs-risk-parameter-update-2-25-25/4956>\
**Category:** Venus - Governance Proposals\
**Created:** [February 25, 2025, 12:31pm UTC](https://community.venus.io/t/chaos-labs-risk-parameter-update-2-25-25/4956 "2025-02-25T12:31:51Z")\
**Posts on this page:** 1\
**Page:** 1

<div class="post-metadata">

**Author:** ![chaoslabs](https://community.venus.io/user_avatar/community.venus.io/chaoslabs/32/2278_2.png) [@chaoslabs](https://community.venus.io/u/chaoslabs)\
**Post date:** [February 25, 2025, 12:31pm UTC](https://community.venus.io/t/chaos-labs-risk-parameter-update-2-25-25/4956/1 "2025-02-25T12:31:51Z")

</div>

# **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.

 ![Screenshot 2025-02-24 at 12.24.31 PM](https://community.venus.io/uploads/default/original/2X/3/36af832bf2098490e79f3f68eaaee44313f0cdc2.png)

 ![Screenshot 2025-02-24 at 12.24.47 PM](https://community.venus.io/uploads/default/original/2X/8/864176cdaf5c1ce333f3460c6e5d8a002364ce32.png)

### **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.

 ![Screenshot 2025-02-24 at 12.25.10 PM](https://community.venus.io/uploads/default/original/2X/3/39174f11cdb9bf7ef522c3f04a14334dcb7a9c2d.png)

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.

 ![image - 2025-02-25T143007.669](https://community.venus.io/uploads/default/original/2X/3/31b01f5b67a4f9b10c26d5ff4b9bceb5881c16c9.png)

### **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.