Summary
- Increase FDUSD (Core) supply and borrow caps
- Increase FIL (Core) supply cap
Analysis
The following recommendations were made utilizing Chaos Labs’ supply and borrow cap methodology and after analyzing each asset’s user positions and market conditions.
FDUSD (Core Pool)
FDUSD’s supply cap is currently at 100% utilization
While borrow cap utilization is currently low, it has surged during Binance Launchpool events, which allow users to stake FDUSD to receive token rewards.
The recent surge in supply is primarily due to the following users:
- 0x4d6ddfee047195528734026780f69b0604492855 supplying ~10.59M FDUSD, amounting to over 35% of the total supply. The user is currently borrowing $23.59M in ETH and BNB against his $35.31M collateral with a health score of 1.18.
- 0x732b8e1c64b38df2363ae575f835d3c64264a1d2 supplying ~6.41M FDUSD, amounting to over 21% of the total supply. The user is currently borrowing $9.21M in BNB against his $17.94M collateral with a health score of 1.51.
Given the user distribution and on-chain liquidity, we recommend increasing supply and borrow caps to 40M and 34M.
FIL (Core Pool)
FIL’s supply cap and borrow cap have reached 83% and 25% utilization, respectively, following a surge of deposits in April.
The supply is relatively well distributed, with the top supplier accounting for 34% of the total.
The majority of value borrowed against FIL collateral is USDT, putting these positions at risk of liquidation should FIL’s price fall.
Our simulations find a limited increase in VAR as TVL increases to 2.0, along with a linear increase in LAR.
Given this, we recommend increasing the supply cap to 1.2M FIL and keeping the borrow cap at 90K.
Specification
| Pool | Asset | Current Supply Cap | Recommended Supply Cap | Current Borrow Cap | Recommended Borrow Cap |
|---|---|---|---|---|---|
| Core | FDUSD | 30,000,000 | 40,000,000 | 24,000,000 | 34,000,000 |
| Core | FIL | 908,500 | 1,200,000 | 90,000 | No Change |