Simple Summary
Gauntlet recommends the following risk parameter changes for the Arbitrum v3 USDC Native comet:
- Increase ARB Supply Cap from 4M tokens ($4.10M) to 8M tokens ($8.20M)
- Increase WBTC Supply Cap from 600 tokens ($22.30M) to 1,200 tokens ($44.60M)
Analysis
WBTC
Link to chart
As seen in the above chart, WBTC supply cap utilization has recently increased to 92% after our recent proposal to increase the WBTC supply cap from 300 to 600 tokens passed. The WBTC Supply cap is 600 tokens ($22.30M). At the current supply cap utilization, $20.52M WBTC is currently supplied, and $1.8M additional WBTC can be supplied to the comet.
Top WBTC Suppliers
As seen in the above chart, the $1.8M WBTC able to be supplied is greater than all but three current users’ WBTC supply positions.
Given the demand for WBTC supply, sufficient WBTC DEX liquidity on Arbitrum, and BTC’s high liquidity & low volatility, Gauntlet recommends increasing the WBTC supply cap from 600 tokens (~$22.30M) to 1,200 tokens (~$44.60M). This change will decrease WBTC supply cap utilization from 92% to 46%, resulting in $24.08M additional WBTC able to be supplied to allow further long-term protocol usage and growth.
ARB
Link to chart
As seen in the above chart, ARB supply cap utilization has recently increased to 100%. The ARB Supply cap is 4M tokens ($4.10M). At the current supply cap utilization, no additional ARB is able to be supplied to the comet.
Top ARB Suppliers
As seen in the chart above, the largest ARB supplier supplies $1.85M ARB.
Given the demand for ARB supply and sufficient ARB DEX liquidity on Arbitrum, Gauntlet recommends increasing the ARB supply cap from 4M tokens (~$4.10M) to 8M tokens (~$8.20M). This change will decrease ARB supply cap utilization from 100% to 50%, resulting in $4.10M additional ARB able to be supplied to allow further long-term protocol usage and growth.
Next Steps
- Target on-chain vote 11/27/23.