This is the monthly continuation of CapRiskSteward updates.
Previous update threads:
Summary
The team 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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Supply and Borrow Cap Recommendations for Euler Base, Prime, Yield, and Unichain
Overview
Gauntlet proposes reducing supply and borrow caps for low-demand markets. All of these markets have seen supply and borrow utilization ≤20% over the last 30 days.
Rationale:
The outlined markets have demonstrated low user demand over the last 30 days, with peak utilization on both the borrow and supply sides at or below 20%. 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 currently open positions.
| Market |
Vault |
Supply Cap Utilization 30 Day High |
Borrow Cap Utilization 30 Day High |
Supply Caps |
Borrow Caps |
| base |
LBTC |
3.0% |
1.7% |
50 |
15 |
| base |
weETH |
5.6% |
0.2% |
3,750 |
938 |
| prime |
LBTC |
0.6% |
1.3% |
300 |
75 |
| prime |
USDtb |
3.8% |
2.9% |
20,000,000 |
18,000,000 |
| prime |
ezETH |
3.1% |
0.0% |
5,000 |
1,200 |
| prime |
rsETH |
2.2% |
1.5% |
27,000 |
6,750 |
| prime |
tETH |
4.3% |
0.0% |
9,400 |
1,600 |
| prime |
weETH |
2.8% |
2.0% |
13,500 |
3,380 |
| unichain |
weETH |
5.3% |
0.1% |
12,000 |
4,500 |
| yield |
RLUSD |
0.3% |
0.1% |
200,000,000 |
180,000,000 |
| yield |
USDe |
4.1% |
1.5% |
20,000,000 |
18,000,000 |
| yield |
frxUSD |
15.7% |
5.4% |
10,000,000 |
9,000,000 |
Cap Recommendations
| Market |
Symbol |
Supply Caps |
Borrow Caps |
| base |
LBTC |
50->25 |
15->7.5 |
| base |
weETH |
3,750->1,875 |
938->469 |
| prime |
LBTC |
300->150 |
75->37.5 |
| prime |
USDtb |
20M->10M |
18M->9M |
| prime |
ezETH |
5,000->2,500 |
1,200->600 |
| prime |
rsETH |
27,000->13,500 |
6750->3375 |
| prime |
tETH |
9,400->4,700 |
1,600->800 |
| prime |
weETH |
13,500->6,750 |
3,380->1,690 |
| unichain |
weETH |
12,000->6,000 |
4,500->2,250 |
| yield |
RLUSD |
20M->10M |
18M->9M |
| yield |
USDe |
20M->10M |
18M->9M |
| yield |
frxUSD |
10M->5M |
9M->4.5M |
Next Steps
- We welcome community feedback.
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Parameter Updates for WETH on Isolated wstETH-WETH-AUSD Monad Market
Recommendation
| Market |
Vault |
Supply Cap |
Borrow Cap |
| Isolated wstETH-WETH-AUSD |
WETH |
9,000→13,500 |
8,1100→12,100 |
Rationale:
Due to high demand for wstETH and WETH looping in Isolated wstETH-WETH-AUSD markets, we recommend an increase in the supply cap to 13500 and a proportional increase in the borrow cap to 12100.
4 out of the top 5 Borrow volume Positions are looping strategies , we expect similar behavior to continue once the caps are increased by 50%.
