Increase the sDOLA LlamaLend v2 borrow cap to 25m crvUSD

Proposals
1

Summary

Increase the sDOLA/crvUSD LlamaLend v2 borrow cap on Ethereum from 12.4m to 25m crvUSD.

Motivation

Raising the cap would create more room for borrowing crvUSD against sDOLA.

Basis for the proposed cap

The model tests a 1.26% price drop over one hour, allowing 1% for the cost of selling DOLA. To account for thinner liquidity during stress, it reduces sale capacity by a third, from 7.9m to 5.27m DOLA. This gives a cap of 25.67m crvUSD, rounded down to 25m.

In this scenario, three loans become eligible for hard liquidation, accounting for 6.88% of debt. Seven of the eight largest positions, which hold 79.8% of debt, avoid both soft and hard liquidation.

Scenario crvUSD debt Modeled DOLA sales outside the market
Cap calculation 25m 5.13m
Loans used in the model 9.59m 0.68m
Same loans scaled up to the proposed cap 25m 1.77m

The 25m scenario scales each loan by the same proportion, keeping its collateral coverage unchanged.

Specification

Item Proposed setting
Market Ethereum sDOLA/crvUSD LlamaLend v2
Controller 0xC77d97cF01737EB7aCE46cAb7cd9F60eC51a40c0
Current borrow cap 12,400,000 crvUSD
Proposed borrow cap 25,000,000 crvUSD 
configurator = Contract("0x6065858d0ef0aa240dfdf6f1a0b2ae34b41f49bc")
configurator.set_borrow_cap(
    "0xc77d97cf01737eb7ace46cab7cd9f60ec51a40c0", 25_000_000 * 10**18
)
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