Summary

Due to increased user demand, the utilization of the USDT/USDC.e Convex leveraged vault on Arbitrum has reached 63%. To allow new users to enter the vault, we propose increasing the maximum vault capacity gradually from 300,000 USDT up to 2,000,000 USDT based on user demand if applicable.

Proposal

Since the leveraged vault utilization is currently at 63%, we propose increasing the maximum vault capacity from 300,000 USDT up to 2,00,000 USDT based on market demand.

The proposed maximum vault capacity (2,000,000 USDT) represents approximately 10% of the strategy’s underlying Curve pool TVL which currently sits at $18.8M. By capping the vault at a relatively small percentage of the Curve pool TVL the protocol mitigates the vault’s redemption risk (i.e. maximizing the likelihood that users can easily exit from the Curve pool to repay their USDT borrow without incurring too much slippage).

Resources

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