What is this about?

Chaos Labs has put forward a proposal to increase the supply and borrow caps for various assets on the GnosisChain market. This action is in response to the high demand and utilization rates observed since the market's inception. The proposal specifically suggests doubling the supply cap for WXDAI, sDAI, USDC, and EURe, while setting the borrow cap at 90% of the respective supply caps. Additionally, for wstETH, the proposal recommends increasing the supply cap to 5,000.

How is the community reacting?

The community reaction to the proposal has been generally positive. MarcZeller showed complete support for the proposal [MarcZeller²]. Gauntlet, while supporting the increases for wstETH and sDAI, advised more conservative cap increases for WXDAI, USDC, and EURe, citing concerns about weaker liquidity and lower usage rates [Gauntlet³]. Following this feedback, ChaosLabs updated the proposal with the recommendations provided by Gauntlet and prepared the payload for execution [ChaosLabs⁴]. Gauntlet later confirmed that the proposal had been executed via the risk steward process [Gauntlet⁵].

Why this is positive?

• The proposal aims to meet the high demand and utilization on the GnosisChain market, which can foster growth and user engagement.
• Community leaders and risk analysts are actively involved in the discussion, ensuring that the proposal is well-considered and data-driven.
• The execution of the proposal through the Risk Steward process demonstrates a functioning governance mechanism responsive to market conditions.

Why this is negative?

We have not been able to determine whether this will be negative.

Next actions

The proposal has been executed via the risk steward process, as confirmed by Gauntlet [Gauntlet⁵]. There are no further actions mentioned at this stage.