Summary
Gauntlet recommends the following risk recommendations to the protocol:
- Increase USDT Mainnet wstETH supply cap from 22,000 to 28,000
- Increase WETH Mainnet ezETH supply cap from 18,000 to 25,000
- Decrease USDT Mainnet WBTC supply cap from 5,000 to 1,400
- Increase WETH Arbitrum ezETH supply cap from 4,000 to 6,400
- Increase USDT Arbitrum wstETH supply cap from 10,000 to 16,000
- Increase WETH Optimism ezETH supply cap from 750 to 1,200
- Increase USDT Polygon MaticX supply cap from 2,600,000 to 4,160,000
- Increase USDC Polygon MaticX supply cap from 2,000,000 to 3,200,000
Analysis
Mainnet
wstETH USDT Comet
Slippage to Liquidate supply cap
The current supply cap, if liquidated would incur a slippage of <25%. The current largest position, if liquidated would incur a slippage of 1.25%, lower than the Liquidation Penalty ensuring profitable liquidations.
ezETH WETH Comet
The ezETH supply cap utilization has been trending upwards, warranting a cap revision.
WBTC USDT Comet
The WBTC supply cap is underutilized, and keeping in line with the previous risk-off recommendations, we recommend lowering the supply cap.
Arbitrum
ezETH WETH Comet
The ezETH supply cap utilization has been trending upwards, warranting a cap revision.
wstETH USDT Comet
Considering all on-chain liquidity, the current supply cap, if liquidated in entirety would incur a 22% slippage.
The liquidation of largest accounts would incur a slippage lower than liquidation penalty, providing ample risk-free arbitrage opportunity.
Top 20 largest suppliers of wstETH
Slippage pertaining to liquidating the largest supplier
Optimism
ezETH WETH Comet
The ezETH supply cap utilization has been trending upwards, warranting a cap revision.
Polygon
The current liquidity on Polygon is sufficient to liquidate largest position with slippage sufficient to incentivise liquidators.
MaticX USDC Comet
Slippage to Liquidate supply cap
Top 20 Largest suppliers of MaticX on USDC Comet
Slippage incurred if largest position liquidated
MaticX USDT Comet
Slippage to Liquidate supply cap
Top 20 Largest suppliers of MaticX on USDT Comet
Slippage incurred if largest position liquidated
Next Steps
- Welcome community feedback
- Submit on-chain proposal