Summary
A proposal to:
- Increase FDUSD’s supply and borrow caps on Venus’s BNB Core deployment.
Motivation
FDUSD (BNB Core)
FDUSD has reached 74% supply cap utilization, and 37% borrow cap utilization.
Supply Distribution
FDUSD’s supply is well distributed, with the largest supplier accounting for 28.6% of the total supply; this user is borrowing just $22K BNB against this position, making the liquidation risk low. The second largest supplier is deposit-only, again limiting liquidation risk.
The two most popular borrowed assets against FDUSD are ETH and BNB, two moderately volatile and highly liquid assets.
Borrow Distribution
Borrows of FDUSD are more concentrated, with the largest position accounting for 50.5% of the total borrows. This $7.5M FDUSD and $6M USDT borrow is against $25M BTCB and $1M DOGE, producing a health score of 1.49. This user has been actively managing their position, reducing liquidation risk.
BTCB is the most popular collateral asset for borrowing FDUSD, followed by ETH and BNB. These highly liquid assets do not present a risk to Venus in the event of liquidation.
Recommendation
Given the user behavior of FDUSD suppliers and the highly liquid collateral of FDUSD borrowers, we recommend increasing its supply cap to 100M and its borrow cap to 80M. This increase is backed by Chaos Labs’ risk simulations, which consider the user’s 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 | FDUSD | 45,000,000 | 100,000,000 | 40,000,000 | 80,000,000 |
Disclaimer
Chaos Labs has not been compensated by any third party for publishing this recommendation.