This is the monthly continuation of CapRiskSteward updates.
Previous update threads:
Summary
Euler Labs and Objective Labs recently developed the CapRiskSteward smart contract as a fast lane for non-critical parameter updates. Following its implementation for the Euler DAO markets, we propose that service providers follow a notification process for in-scope changes. By establishing this process we seek to give the Euler community full transparency into the work done by service providers to optimize and grow Euler DAO markets.
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Objective Labs: Parameter Updates on Ethereum (2025-08-04)
| Market |
Vault |
Supply Cap |
| Euler Yield |
PT-USDe-25SEP2025 |
10M → 20M |
Rationale:
Supply cap utilization has maxed out shortly after raising it last week. To accommodate rising demand, Objective recommends increasing doubling the supply cap to $20M. Liquidity depth simulations indicate a 20M PT-USDe-25SEP2025 swap can be executed with 0.68% slippage.
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Gauntlet is aligned with the Objective Labs’ proposed parameter adjustment for PT-USDe-25SEP2025.
PT-USDe-25SEP2025:
- PT liquidity supports liquidating the proposed cap (20M, as Objective Labs noted) with minimal slippage (0.51% at the time of review).
- We note the PT matures in fewer than 60 days.
Gauntlet will monitor user demand once the proposal is implemented and recommend adjustments accordingly.
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[Gauntlet] Parameter Updates on Ethereum (2025-08-06)
| Market |
Vault |
Borrow Kink Rate |
| Prime |
WETH |
2.60% → 2.85% |
Rationale
WETH and other LST/LRT assets (excluding wstETH) on Euler Prime are experiencing a decline in supply. Gauntlet recommends adjusting the WETH Interest Rate Curve to attract suppliers and increase the supply of WETH in Euler Prime.
Expected Outcome
We will monitor the increase in supply trends due to the proposed Kink Rate adjustment and, if successful, provide similar recommendations for WETH markets on other networks.
Next Steps
We welcome community feedback.
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[Gauntlet] Paremeter Updates on Ethereum (2025-08-06)
| Market |
Asset |
Base Rate |
Kink (%) |
Rate @ Kink |
Rate @ 100% (Max) |
| Euler Yield |
USDC, USDT, PYUSD, RLUSD, wM, USDS, DAI, USD0, USDe, USDtb |
0% |
90% |
8.0% |
25% → 15% |
| Euler Prime |
USDC, USDT, USDS, wM, USDtb, RLUSD, USDe |
0% |
90% |
6.5% |
25% → 13% |
Rationale
Following our recommended adjustments to stable coin Interest Rate curves last month, we have observed that yields have stabilized post-implementation (July 20th).
As the Euler swap continues to gain popularity, we anticipate a rise in market utilization in the coming weeks. To prepare for these expected increases, Gauntlet recommends implementing IR Curve adjustments to both Euler Yield and Prime Vaults.
Below is the frequency distribution of borrow rates for USDC on Euler Yield. Gauntlet has observed and analyzed this empirical data to determine the recommended maximum borrow rate (~97th percentile).
Next Steps
We welcome community feedback.
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Objective is aligned with Gauntlet’s proposed IRM update of the WETH vault on Euler Prime.
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Objective is aligned with Gauntlet’s proposed stablecoin IRM updates on Ethereum. While we believe these max rate reductions are aggressive, we are aligned with the goal to reduce the negative effect of utilization spikes downstream of EulerSwap.
Objective will be closely monitoring the effects of these changes in the weeks following implementation. We are especially looking for prolonged (>6hr) utilization rate spikes above 95%. Should these become
We attach more data points below:
Euler Prime: Borrow APY Frequency Distribution
Euler Prime: 97th Percentile Borrow APY
Euler Yield: Borrow APY Frequency Distribution
Euler Yield: 97th Percentile Borrow APY
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This CRS proposal has been executed on Aug-07-2025 05:31:23 AM (UTC).
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[Gauntlet] - Parameter Updates on Ethereum (2025-08-07)
Overview
Gauntlet proposes reducing supply and borrow caps for Euler Prime markets that have supply and borrow cap utilization below ≤10% over the past 30 days by 50%.
Rationale:
The outlined markets have demonstrated low user demand over the last 30 days, with peak utilization on both the borrow and supply sides below 10%. To reduce risk exposure, we recommend lowering the supply and borrow caps for these markets by 50%. We note that cap reductions will not affect open positions.
| Markets |
Borrow Caps |
Supply Caps |
Borrow Cap Utilization 30 Day High |
Supply Cap Utilization 30 Day High |
| rETH |
938 |
2,350 |
0% |
1% |
| USDS |
4,500,000 |
5,000,000 |
0% |
0% |
| cbETH |
1,880 |
4,690 |
0% |
0% |
Cap Recommendations
| Vault |
Borrow Cap |
Supply Cap |
| rETH |
938 → 400 |
2350 → 1100 |
| USDS |
4.5M → 2.25M |
5M → 2.5M |
| cbETH |
1880 → 900 |
4690 → 2300 |
Next Steps
- We welcome community feedback.
1 Like
[Gauntlet] - Parameter Updates on Base (08-07-2025)
Overview
Gauntlet proposes reducing supply and borrow caps for Euler Base markets that have supply and borrow cap utilization below ≤10% over the past 30 days by 50%.
Rationale:
The outlined markets have demonstrated low user demand over the last 30 days, with peak utilization on both the borrow and supply sides below 10%. To reduce risk exposure, we recommend lowering the supply and borrow caps for these markets by ~50%. We note that cap reductions will not affect open positions.
| Markets |
Borrow Caps |
Supply Caps |
Borrow Cap Utilization 30 Day High |
Supply Cap Utilization 30 Day High |
| cbETH |
1,500 |
3,750 |
1.0% |
8.5% |
| wsuperOETHb |
469 |
1,880 |
0.5% |
6.6% |
| LBTC |
63 |
250 |
11.8% |
5.4% |
| ezETH |
938 |
3,750 |
0.6% |
3.3% |
| wstETH |
1,500 |
3,750 |
4.3% |
3.1% |
| AERO |
1,600,000 |
2,000,000 |
0.7% |
1.1% |
| rETH |
1,500 |
3,750 |
0.1% |
0.5% |
| USDS |
36,000,000 |
40,000,000 |
0.3% |
0.4% |
| sUSDS |
18,000,000 |
20,000,000 |
0.0% |
0.1% |
Cap Recommendations
|
Borrow Cap |
Supply Cap |
| cbETH |
1500->800 |
3750->900 |
| wsuperOETHb |
469->200 |
1880->900 |
| LBTC |
63->30 |
250->100 |
| ezETH |
938->500 |
3750->1900 |
| wstETH |
1500->800 |
3750->1900 |
| AERO |
1.6M->0.8M |
2M->1M |
| rETH |
1500->800 |
3750->1900 |
| USDS |
36M->18M |
40M->20M |
| sUSDS |
18M->9M |
20M->10M |
Next Steps
- We welcome community feedback.
1 Like
Objective is aligned with Gauntlet’s proposed cap decrease for rETH, USDS and cbETH on Euler Prime.
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Objective is aligned with Gauntlet’s proposed cap decreases for the mentioned Euler Base markets.
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Objective Labs: Parameter Updates on Ethereum (2025-08-08)
| Market |
Vault |
Supply Cap |
| Euler Yield |
PT-USDe-25SEP2025 |
20M → 30M |
| Euler Yield |
PT-tUSDe-25SEP2025 |
30M → 40M |
| Euler Yield |
PT-pUSDe-16OCT2025 |
3M → 6M |
Rationale
Supply cap utilization for PT-USDe, PT-tUSDe, and PT-pUSDe remained high indicating sustained demand:
- PT-USDe-25SEP2025: 99.99% utilization, Liquidity: $36M, 30M swap → 1.12% slippage
- PT-tUSDe-25SEP2025: 90.66% utilization, Liquidity: $74M, 40M swap → 1.63% slippage
- PT-pUSDe-16OCT2025: 99.49% utilization, Liquidity: $32M, 6M swap → 0.69% slippage
Depth checks on Pendle confirm these increases can be executed with acceptable slippage.
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Gauntlet is aligned with Objective Labs’ proposed supply cap increases of Pendle tokens PT-USDe, PT-tUSDe, and PT-pUSDe on Euler Yield. Slippage levels are below 5% for the proposed caps and should be able to bring in more TVL for Euler
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Objective Labs: Parameter Updates on Ethereum (2025-08-08) (2)
| Market |
Vault |
Supply Cap |
| Euler Yield |
PT-pUSDe-16OCT2025 |
6M → 12M |
Rationale
The recently increased supply cap for PT-pUSDe has been filled in less than 2 hours. We recommend doubling it to 12M to accommodate demand. Liquidty on Pendle can sustain a 12M swap with 1.35% slippage.
1 Like
Gauntlet is aligned with the proposal to increase the supply cap of PT-pUSDe-16OCT2025 on Euler Yield as we’ve seen strong demonstrated user demand. We note that liquidity for the PT can easily handle the cap increase (as noted by Objective Labs) with reasonable slippage.
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Objective Labs: Parameter Updates on Ethereum (2025-08-11)
| Market |
Vault |
Supply Cap |
| Euler Yield |
PT-USDe-25SEP20205 |
30M → 50M |
| Euler Yield |
PT-pUSDe-16OCT2025 |
12M → 20M |
PT-USDe and PT-pUSDe have reached their supply cap.
- PT-USDe can sustain a 40M swap with 1.05% slippage with $55M total liquidity.
- PT-pUSDe can sustain an 18M swap with 2.54% slippage given $34M total liquidity.
Larger size swaps are currently unavailable due to Pendle’s 96% threshold for PT proportion. We continue to actively monitor liquidity depth and cap utilization for these popular vaults.
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Gauntlet is aligned with the proposal to increase the supply cap of PT-pUSDe-16OCT2025 and PT-USDe-25SEP20205 on Euler Yield. The caps for PT-pUSDe-16OCT2025 are nearing the limit of DEX liquidity on Pendle. In the future, it is advisable to hit pause on future cap increases until liquidity improves.
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Objective Labs: Parameter Updates on Ethereum (2025-08-12)
| Market |
Asset |
Base Rate |
Kink (%) |
Rate @ Kink |
Rate @ 100% (Max) |
| Euler Yield |
USDC, USDT, PYUSD, RLUSD, wM, USDtb, USDe |
0% → 5% |
90% |
8.0% → 10% |
15% → 20% |
| Euler Yield |
eUSDe, rUSD |
0% → 5% |
90% |
7.5% → 10% |
40% |
Rationale
We recommend adjusting parameters as follows:
Over the last 30 days, Euler Yield’s borrowable stablecoins: USDC, USDT, RLUSD, wM, USDe, eUSDe, and rUSD, have maintained consistently high utilization, with mean values between 82% and 92% and median values closely aligned. This indicates strong, steady borrower demand and minimal idle liquidity.
Historical borrow rate distributions show that the lowest non-zero bucket in this period was ~5.5%, with most activity concentrated between 6% and 10%. Setting a 5% base rate would formalize an observed market floor, remove near-zero rate periods, and improve supplier APRs without meaningfully deterring borrowers at current utilization levels.
Inactive assets (PYUSD, USDTb) recorded 0% utilization during the period, meaning the change would have no immediate user impact, while positioning these markets for a healthier rate structure if borrowing resumes.
Market comparison: Morpho’s Smokehouse USDC vault currently offers a 10.13% native APY at ~90% utilization, implying a kink borrow rate of approximately 11.25%. The proposed Euler Yield USDC kink borrow rate of 10% remains competitive for borrowers while still increasing supplier incentives, positioning Euler Yield attractively in the market relative to leading protocols.
Note: USDe’s 97th-percentile borrow APY remains higher than other stablecoins due to periodic demand spikes. This proposal brings the kink rate of eUSDe and eUSD in alignment with the rest, while previously it was 0.5 pp. lower. The same are intentionally left at a higher max IR (40%) to provide additional flexibility in managing potential demand surges and to maintain liquidity in stressed conditions.
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[Gauntlet]: Parameter Updates on Ethereum (2025-08-12)
| Market |
Vault |
Supply Cap |
| Euler Yield |
PT-USDe-25SEP20205 |
50M → 60M |
Rationale
PT-USDe has reached its supply cap. Liquidity for PT-USDe continues to increase on Pendle.
- PT-USDe can sustain a 60M swap with 0.27% slippage.
Next Steps
- We welcome community feedback.
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