# [Gauntlet] Seamless USDC Risk Recommendation - (2024-04-10)

## Simple Summary

Gauntlet recommends the following cap adjustments to USDC

| Asset | Current Supply Cap | Gauntlet Recommended Supply Cap | Current Borrow Cap | Gauntlet Recommended Borrow Cap |
| ---- | ---- | ---- | ---- | ---- |
| USDC | 8M | 16M | 6M | 16M |

## Rationale

### USDC Circulating Supply and Holders

USDC's expansion on BASE has surged exponentially, reaching 1.6 billion USDC. This growth correlates with Coinbase's [announcement](https://cointelegraph.com/news/coinbase-to-move-customer-usdc-to-l2-base) to store both corporate and customer USDC on the base chain. Gauntlet suggests raising the borrow cap to match the supply cap to achieve market equilibrium via market demand and avoid artificially capping the interest rate APY when the borrow cap is maxed out, as shown below.


### USDC Liquidity
| Asset | DEX 25pct Slippage Token | DEX 25pct Slippage USD |
| ----- | ------------------------ | ---------------------- |
| USDC | $10,742,370.00 | $10,742,475.64 |