Summary

Due to increased user demand, the utilization of the USDC 4Pool Aura leveraged vault on Arbitrum has reached 100%. To allow new users to enter the vault, we propose increasing the maximum vault capacity from 300,000 USDC to 750,000 USDC.

Proposal

Since the leveraged vault utilization is currently at 100%, we propose increasing the maximum vault capacity from 300,000 USDC to 750,000 USDC.

The proposed vault capacity (750,000 USDC) represents approximately 12% of the strategy’s underlying Balancer pool TVL which currently sits at $6.3M. By capping the vault at a relatively small percentage of the Balancer pool TVL the protocol mitigates the vault’s redemption risk (i.e. maximizing the likelihood that users can easily exit from the Balancer pool to repay their USDC borrow without incurring too much slippage).

Additionally, Notional’s Prime USDC liquidity has increased drastically from 375,000 to 3,650,000 partly due to the launch of Notional’s ARB rewards for LPs. This increase in USDC liquidity also supports the increase in the USDC maximum vault capacity.

Resources

• Notional V3 docs
• V3 Risk docs
• V3 Technical docs
• V3 Dune dashboard