Summary
Due to high demand for the recently launched USDC/GHO/USDT leveraged vault, we propose increasing the vault’s maximum pool share parameter from 20% to 35%. The Notional leveraged vault currently holds 19.5% of the total amount of USDC/GHO/USDT Balancer Pool Tokens (BPTs). In order to allow new users to enter the vault we propose increasing the maximum pool share parameter to 35%.
Risks
Increasing the maximum pool share implies that the protocol will accept a higher proportion of USDC/GHO/USDT BPTs as collateral. The USDC/GHO/USDT balancer pool is currently $2.5M. By increasing the maximum pool share parameter to 35%, the protocol will allow users to hold up to $840K of the pool’s BPTs as collateral assuming the pool size remains constant.
A potential de-peg in USDT or GHO could adversely impact the vault. More specifically if liquidity for GHO decreases it could increase the amount of slippage vault users will experience when redeeming their positions. GHO on-chain liquidity is currently $21M with 33% of that liquidity being held in non-GHO stablecoins thereby mitigating potential liquidity concerns.
| Protocol | Pools | Address | GHO Liquidity | Non GHO liquidity | % of non GHO liquidity |
|---|---|---|---|---|---|
| Maverick | USDC/GHO | 0x0d67b27c340887da87344c344c20ce60a8eb84c5 | $1,604,813 | $461,516 | 22.34% |
| Curve | fxUSD/GHO | 0x74345504eaea3d9408fc69ae7eb2d14095643c5b | $2,825,298 | $992,215 | 25.99% |
| Curve | USDe/GHO | 0x670a72e6d22b0956c0d2573288f82dcc5d6e3a61 | $7,924,136 | $4,155,633 | 34.40% |
| Curve | crvUSD/GHO | 0x635ef0056a597d13863b73825cca297236578595 | $246,496 | $146,977 | 37.35% |
| Curve | crvUSD/GHO | 0x86152df0a0e321afb3b0b9c4deb813184f365ada | $93,573 | $85,907 | 47.86% |
| Balancer | USDC/GHO/USDT | 0x8353157092ed8be69a9df8f95af097bbf33cb2af | $1,442,948 | $1,106,330 | 43.40% |
| Total | $14,137,264 | $6,948,578 | 32.95% |