Simple Summary
Gauntlet recommends the following supply cap adjustments to the protocol:
Supply Cap Recommendations
| Status | Comet | Asset | Supply Cap |
|---|---|---|---|
| Current | Base USDS | cbBTC | 0 |
| Proposed | Base USDS | cbBTC | 450 |
Rationale
- The current supply cap is set at 0, given a lack of liquidity when the market was initially listed. However, as liquidity has grown, there is sufficient rationale to set a non-zero supply cap.
- Given that cbBTC currently has a 5% liquidation penalty, Gauntlet proposes setting the supply cap to 450. At this level, the entire supply cap could be liquidated effectively with only ~2.10% slippage.
Next Steps
- We welcome community feedback.