What is this about?

The discussion continues to focus on the proposal by ChaosLabs to increase the supply and borrow caps on V3 Ethereum for rETH on both Arbitrum and Ethereum chains¹. The proposal was made due to the nearing full utilization of the current supply cap for rETH on V3 Arbitrum, with a recommendation to double it to 6.8k. Similarly, for rETH on Ethereum, the borrow cap was also close to being fully utilized, and the suggestion was to double the supply cap to 19.2k¹. A detailed table specifying the current and recommended supply and borrow caps for both chains was provided¹. Gauntlet has now weighed in, supporting the increase of the borrow cap for rETH on Ethereum v3². They also noted that the supply cap usage for Arbitrum v3 has decreased to 60% and suggested that caps should be raised if usage returns to previous levels². ChaosLabs has since created a transaction updating the rETH borrow cap on V3 Ethereum³. Additionally, Gauntlet has made an update through a risk steward, although the specifics of this update are not provided⁴.

How is the community reacting?

The community's reaction is not explicitly mentioned in the summaries. However, the involvement of Gauntlet in the discussion and their support for the proposed changes indicates that the community is actively participating in the decision-making process². The community is also awaiting a reassessment of the borrow caps for rETH if the current high usage of 92% remains by 2023-11-07². The creation of a transaction by ChaosLabs to update the rETH borrow cap on V3 Ethereum suggests that the community is taking steps to implement the proposed changes³.

Why this is positive?

The proposal to increase the supply and borrow caps could potentially lead to increased liquidity and borrowing capacity for rETH on both Arbitrum and Ethereum chains. This could enhance the overall functionality and efficiency of the system¹. The support from Gauntlet for the proposed changes further validates the potential benefits of the proposal². The fact that a single account is supplying nearly 40% of all rETH and this does not impact the recommendation indicates a robust system that can handle large individual contributions¹. The creation of a transaction by ChaosLabs to update the rETH borrow cap on V3 Ethereum is a positive step towards implementing the proposed changes³.

Why this is negative?

The potential negative aspect is not explicitly mentioned in the summaries. However, one could infer that the high utilization rates of the supply and borrow caps might indicate a high demand that the current system is struggling to meet. This could potentially lead to issues if not addressed promptly¹. Furthermore, the fact that a single account is supplying nearly 40% of all rETH could potentially indicate a lack of decentralization, which might be a concern for some community members¹. The decrease in supply cap usage for Arbitrum v3 to 60% might also indicate a fluctuating demand, which could pose challenges in managing the supply and borrow caps².