Simply Summary
With ongoing speculations on BitGo’s joint venture with BiTGlobal and the obscurity on WBTC’s regulatory and control frameworks, Gauntlet is actively monitoring any developments that adversely change the risk profile of WBTC and consequently the risk to Moonwell. As of today, Gauntlet only recommends reducing caps for WBTC on Optimism due to under utilization and as a pre-emptive measure against current developments.
| Asset | Chain | Current Supply Cap | Recommended Supply Cap | Current Borrow Cap | Recommended Borrow Cap |
|---|---|---|---|---|---|
| WBTC | Optimism | 66 | 25 | 40 | 18 |
Rationale
Both the supply and borrow caps for WBTC are under utilized with only ~25% of supply cap and 22% of borrow cap being utilized. We recommend reducing the caps to better reflect the market demand.
Supply cap usage
Borrow cap usage
While further transparency is necessary to adequately assess the risks associated with this joint venture, given the 60-day waiting period, we do not recommend any immediate changes to other risk parameters unless necessary. Additionally, the stable circulating supply of WBTC in the days following the announcement suggests there has been no adverse reaction from current WBTC users, as evidenced by the lack of significant redemptions or burns.
