Summary
A proposal to:
- Increase THE’s supply and borrow caps on Venus’s BNB Core deployment.
THE (BNB Core)
THE has reached 94% supply cap utilization and 85% borrow cap utilization following recent activity in the market.
Supply Distribution
THE’s supply is not highly concentrated, with the top three suppliers accounting for less than 50% of the total supplied. As was the case ahead of the last cap increase, all of the top suppliers maintain relatively strong health scores, loop, or do not borrow against their position.
USDT continues to be the most popular asset borrowed against THE, followed by BNB and THE itself.
Borrow Distribution
There continues to be some looping in the market, reducing the risk profile of THE borrows.
However, much of the recent borrowing activity came against USDT collateral; this presents limited risk because of USDT’s strong liquidity.
Liquidity
THE’s liquidity has been somewhat volatile, though it remains sufficient to support an increase in the supply and borrow caps.
Recommendation
Given user behavior and on-chain liquidity, we recommend increasing the asset’s supply and borrow caps.
This increase is backed by Chaos Labs’ risk simulations, which consider user behavior, on-chain liquidity, and price impact, ensuring that the higher cap does not introduce additional risk to the platform.
Specification
| Market | Asset | Current Supply Cap | Recommended Supply Cap | Current Borrow Cap | Recommended Borrow Cap |
|---|---|---|---|---|---|
| BNB Core Pool | THE | 12,000,000 | 14,500,000 | 6,000,000 | 8,000,000 |
Disclaimer
Chaos Labs has not been compensated by any third party for publishing this recommendation.