# Warden Risk Recommendations - Supply/Borrow Caps on BASE **URL:** \ **Category:** Proposals\ **Tags:** base\ **Created:** [September 5, 2023, 5:16pm UTC](https://forum.moonwell.fi/t/warden-risk-recommendations-supply-borrow-caps-on-base/611 "2023-09-05T17:16:31Z")\ **Posts on this page:** 2\ **Page:** 1
**Author:** ![WardenFinance](https://dub1.discourse-cdn.com/flex017/user_avatar/forum.moonwell.fi/wardenfinance/32/427_2.png) [@WardenFinance](https://forum.moonwell.fi/u/WardenFinance)\ **Post date:** [September 5, 2023, 5:16pm UTC](https://forum.moonwell.fi/t/warden-risk-recommendations-supply-borrow-caps-on-base/611/1 "2023-09-05T17:16:31Z")
# Warden Risk Recommendations - Supply/Borrow Caps on BASE ## Summary Warden recommends setting supply and borrow caps for USDbC, cbETH and ETH Base markets in line with current usage as a preventive measure. ## Specifications | Market | USDbC | DAI | cbETH | ETH | | --- | --- | --- | --- | --- | | Supply Cap | 40M → 20M ($40M → $20M) | 10M ($10M) | 4’000 → 2’000 ($6.9M → $3.4M) | 10’500 → 5’000 ($17.2M → $8.2M) | | Borrow Cap | 32M → 10M ($32M → $10M) | 5M ($5M) | 1’200 → 1’000 ($2.1M → $1.7M) | 6’300 → 3’500 ($10M → $5.7M) | ## Details Even though caps are currently within acceptable range relative to liquidity levels on Base chain, we can’t guarantee that market conditions will remain favorable in the future. As a preventive measure, we recommend setting the caps in line with current supply and borrow usage and updating them more dynamically through the Caps Guardian role. Our proposed caps leave at least 20% buffer over the max supply and borrow usage of the last 30d. The proposed buffer intends to leave sufficient room for growth while preventing excessive monitoring and frequent updates for the Caps Guardian. | Market | USDbC | DAI | cbETH | ETH | | --- | --- | --- | --- | --- | | Max total supply (last 30d) | 14’400’000 (36% of current cap) (72% of proposed cap) | 6’000’000 (60% of current cap) | 743 (19% of current cap) (37% of proposed cap) | 3’400 (32% of cap) (68% of proposed cap) | | Max total borrow (last 30d) | 7’750’000 (24% of current cap) (78% of proposed cap) | 932’000 (19% of current cap) | 309 (26% of current cap) (31% of proposed cap) | 2’400 (38% of cap) (69% of proposed cap) | | Asset | USDbC | DAI | cbETH | ETH | | --- | --- | --- | --- | --- | | Circulating supply (Base chain) | 123’900’000 ($123.9M) | 23’700’000 ($23.7M) | 22’600 ($38.8M) | 60’850 ($99.5M) | | 5% depth (Swap for non-correlated asset on base chain) | 2’600’000 ($2.6M) | 375’000 ($375k) | 700 ($1.14M) | 1’350 ($2.1M) | ---
**Author:** ![Gauntlet](https://dub1.discourse-cdn.com/flex017/user_avatar/forum.moonwell.fi/gauntlet/32/780_2.png) [@Gauntlet](https://forum.moonwell.fi/u/Gauntlet)\ **Post date:** [September 12, 2023, 3:57pm UTC](https://forum.moonwell.fi/t/warden-risk-recommendations-supply-borrow-caps-on-base/611/2 "2023-09-12T15:57:38Z")
As highlighted in our forum [post](https://forum.moonwell.fi/t/moonwell-base-recommendations-2023-09-11/617) regarding BASE recommendations, we propose reducing the USDbC borrow and supply caps. This adjustment comes in anticipation of the native USDC listing and the upcoming migration from USDbC to USDC, as planned by Circle and the BASE foundation. Reducing the supply cap for cbETH and ETH would result in a supply cap usage of approximately 75% with the following available liquidity: | Asset | Recommended Cap Usage | Remaining Liquidity | | --- | --- | --- | | cbETH | 77.75% | $727,130.00 | | ETH | 74.62% | $1,977,102.00 | Gauntlet would recommend maintaining higher caps based on these asset’s current on-chain liquidity, overall global liquidity (cross chain + CEX), and to maintain liquidity for potential large LPs similar to current users [0x9e67663](https://debank.com/profile/0x9e67663c01e86c7bd8c3cd2285c681dbad1c8327) ($1.3M) or [0x73831e7](https://debank.com/profile/0x73831e7c600f48cebbbff957b466be8e5c087f34) ($1.1M) to utilize Moonwell BASE liquidity pools. | Asset | Current Cap | Current Cap USD | Avaiable Liquidity | | --- | --- | --- | --- | | cbETH | 4000 | $6,536,000.00 | $3,995,130.00 | | ETH | 10500 | $16,359,000.00 | $10,546,102.00 | For the WETH borrow cap, a reduction would result in 77% cap usage, leaving a liquidity of $1.2M. We would recommend to maintain current borrow caps based previously mentioned liquidity, circulating supply, and token amount amongst top wallets: | Address | WETH Tokens | | --- | --- | | 0xb4885bc63399bf5518b994c1d0c153334ee579d0 | 13056.25493 | | 0x44ecc644449fc3a9858d2007caa8cfaa4c561f91 | 7273.626551 | | 0xba12222222228d8ba445958a75a0704d566bf2c8 | 2193.895608 | | 0x6223bd82010e2fb69f329933de20897e7a4c225f | 1330.577781 | | 0x9BB646BF0F4Da44bfaF3d899e774DE065731EDFe | 1305.140936 | | Top 5 | 25,159.49581 | These leading wallets represent access to tokens for market makers and users, ensuring liquidity remains robust even in instances of excessive borrowing of token. Gauntlet remains neutral on the decision to reduce the cbETH borrow cap. Following Warden’s recommendation, we will adjust the cbETH borrow cap from 1,200 to 1,000.