[Gauntlet] Supply Cap Recommendations (5/27/25)
Simple Summary
Gauntlet recommends the following risk recommendations to the protocol:
- No Change to Mainnet V3 USDT Comet’s tBTC Supply Cap from 285
- Increase Mainnet V3 USDT Comet’s sFRAX Supply Cap from 40M to 50M
- Increase Mainnet V3 WETH Comet’s cbBTC Supply Cap from 93 to 150
- Increase Optimism V3 USDC Comet’s WBTC Supply Cap from 100 to 130
Utilization
sFRAX Supply Cap Utilization
cbBTC Supply Cap Utilization
WBTC Supply Cap Utilization
Top Positions
Across the board, the largest positions maintain a high health factor of >1.4.
sFRAX Top Positions
cbBTC Top Positions
WBTC Top Positions
Slippage
sFRAX/USDT Slippage
Liquidating the entire cap would incur a slippage of ~33%. However, given the health factor of ~1.5 and the high degree of correlation between sFRAX and USDT, we recommend an increase of sFRAX supply cap to 50M.
cbBTC/WETH Slippage
Increasing supply cap for cbBTC to 150 would incur marginal slippage. We therefore recommend a supply cap at this level before gauging demand for subsequent increases.
WBTC/USDC Slippage
Liquidating all the top 5 positions at once would incur a slippage of ~30% against USDC. Given the long-tail likelihood of this event and the strong health factors of the largest positions, we recommend increasing the supply cap of WBTC to 130.
Next Steps
- Welcome feedback from the community
- Post recommendations to on-chain proposal