Summary
- Increase FDUSD (Core Pool) borrow cap to 24M FDUSD
- Increase USDT (Core Pool) supply and borrow caps to 500M and 450M
- Increase WBETH Core Pool) borrow cap to 16K WBETH
Analysis
The following recommendations where made utilizing Chaos Labs’ supply and borrow cap methodology and after analyzing user positions and market conditions for each asset.
FDUSD
FDUSD’s supply and borrow caps stand at 43% and 80% utilization, respectively.
Borrows have surged in recent days as a result of Binance announcing that users would be able to join Ethena’s Launch Pool by depositing FDUSD.
Borrows are distributed amongst users, though BTCB is the most popular collateral against FDUSD.
Given this, and the token’s on-chain liquidity, we recommend increasing the borrow cap 50% to 24M FDUSD.
USDT
USDT’s supply and borrow caps stand at 78% and 85% utilization, respectively.
Utilizing our supply and borrow cap methodology and given USDT liquidity on Venus, we recommend increasing the borrow cap to 450M USDT. In addition, to better align the supply cap to current supply, we recommend setting the supply cap at 500M.
wbETH
The supply and borrow caps for wbETH currently stand at 51% and 100% utilization, respectively.
While supply has shown no distinct trend, borrows have increased to the cap each time it has been raised.
The top supplier supplies just under half of the wbETH in the Core Pool, and has not added or removed wbETH since October, despite being active with other assets.
Meanwhile, the two largest borrowers are borrowing wbETH against BNB and BTCB.
The top borrower is using the wbETH to deposit in the Lista DAO protocol, which is undergoing an airdrop.
Given these factors and the on-chain liquidity, we recommend increasing the borrow cap to 16K wbETH.
| Pool | Asset | Current Supply Cap | Recommended Supply Cap | Current Borrow Cap | Recommended Borrow Cap |
|---|---|---|---|---|---|
| Core | FDUSD | 30,000,000 | No Change | 16,000,000 | 32,000,000 |
| Core | USDT | 400,000,000 | 500,000,000 | 300,000,000 | 450,000,000 |
| Core | WBETH | 40,000 | No Change | 8,000 | 16,000 |