Gauntlet Guardian - Cap Recommendations for USDC and WETH

Simple Summary

Gauntlet will use Cap Guardian to increase the Supply and Borrow Cap for USDC and WETH.

Asset Current Supply Cap Recommended Supply Cap Current Borrow Cap Recommended Borrow Cap
USDC 56,000,000 75,000,000 52,000,000 70,000,000
WETH 40,000 50,000 28,000 40,000

Gauntlet will be utilizing the Cap Guardian to enact this change as voted by the community within this forum post and proposal.

Supporting Data

USDC Circulating Supply

The circulating supply of USDC has experienced a tenfold increase since March, and it continues to witness a sustained surge on Base, accompanied by an exponential rise in the number of holders.

USDC Borrowing

Of the top 10 largest suppliers on USDC, 3 positions are borrowing non-stables, one of them being AERO, and the largest position borrowing WETH. There is sufficient liquidity to absorb these positions in the market. Gauntlet will continue to monitor all positions.

WETH Liquidity

WETH on-chain liquidity has a 25% slippage of 11,000 WETH ($33,000,000), however CEX liquidity has been ranging between 80-120M USD.

WETH Positions

4 of the top 10 positions are borrowing USDC and 1 position is only supplying assets. The rest are borrowing recursively. There is sufficient liquidity to absorb positions that are borrowing stablecoins.

Quick Links

Please click below to learn about our methodologies:

Gauntlet Parameter Recommendation Methodology
Gauntlet Model Methodology

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Guardian transaction 1 and transaction 2 were implemented