Borrow cap - cCOMP RE:Getty

Originally from @getty

Set Borrow cap to 4.6 Million

Proposal: remove the borrow cap on the cCOMP market.

On last Wednesday’s Community Call (I tried and failed to record the call…next time) we discussed removing the cCOMP borrow cap of 100k COMP. The borrow cap was originally put into place to prohibit someone from using the market to borrow COMP, create a governance proposal, vote, and return the capital in seconds. After the upgrade to Governor Bravo and the installation of a review period, the governance process is significantly more cost-prohibitive for a borrower to obtain the necessary votes to meet the proposal threshold. As well, the review period gives users 48-hours to position their COMP holding for a vote, unlike Governor Alpha which used an instantaneous voting system. If a malicious user were to borrow the required COMP to meet the proposal threshold the community would have sufficient time to defeat their proposal.

Removing the borrow cap will help the COMP market develop. Trading firms (onchain and offchain) utilize money markets like Compound and Aave in their systems to borrow assets and particularly ones that are not abundant in supply in traditional borrow/lend services like BlockFi, Genesis, Nexo, and Celsius. It is helpful for everyone if spot and futures markets are efficient.

Next Steps: Changing the borrow cap does not require a traditional governance proposal since caps are controlled by the community multisig. The multisig holders follow the direction of the community. Below is a 7-day poll for removing the borrow cap on the cCOMP market. If you vote “YES” you think the borrow cap should be removed. If you vote “NO” you do not think the borrow cap should be removed. If the poll revolves to “YES” after the 7-day period the multisig holders will remove the borrow cap.