On August 5, 2022, the Aave community released a proposal to increase the supply cap of Synthetic USD token (sUSD) on V3 optimism by 100%.
The supply cap value before the proposal was 10m sUSD, with the proposal to increase that supply to 20m sUSD.
With the launch of the “OP Summer” project, both lending and borrowing of assets on Aave’s optimism layer 2 have increased drastically. This is due to the lower transaction fees (1%) and the additional OP token rewards allocated to the DeFi Titan, Aave.
How did the launch affect sUSD DEX liquidity?
Well, due to the optimism mining on Aave V3, the sUSD supply cap of 10m sUSD was maxed out in 10 days. Which can inhibit the growth of the project as no new users would be able to supply or borrow the asset on Aave.
Thus, the proposal by SNX ambassador was passed to ensure an ample supply of sUSD would be available for use.
Mark Zeller, the integration lead at Aave, showed his full support for the proposal, saying:
There are natural synergies between SNX stakers and sUSD miners on OP and Aave LP. This proposal seems fit for the fast track process 11 to change caps.
The Aave community also showed support for the proposal. At the end of 48hrs after the proposal’s release, the vote was 100% in favor of the increase.
This speedy resolution is possible due to the adoption of a fast-track process for V3 markets. The regular proposal and voting process would take weeks to resolve, and it would also negatively affect the growth of the market.
Amidst the current market situation, the proposal and speedy resolution are for the good of sUSD’s prospects.
