tl;dr This proposal seeks to increase the total borrowing cap for Abracadabra’s GM cauldrons from $25.5M MIM to $36M MIM.
Introduction:
The GM cauldrons have seen consistent adoption and liquidity growth since their inception, demonstrating strong borrowing demand and healthy liquidation processes. To further enhance capital efficiency and expand borrowing opportunities within the ecosystem, we propose increasing the cumulative borrowing cap across all gm cauldrons to $36 million.
This increase ensures:
- Greater capital accessibility for users looking to leverage their GM positions.
- Improved MIM liquidity circulation within the broader Abracadabra ecosystem.
- Continued alignment with the GMX ecosystem’s expansion and adoption.
The initial allocation of the increased cap will be determined based on risk assessments and liquidity conditions. However, the proposed distribution will include all major GM collateral types to ensure balanced utilization across assets.
Updated Parameters:
In order to remain conservative with respect to individual pool risk, we are suggesting that borrow caps be no greater than 20% of the total GMX market (by TVL). At present, the revised caps for the GM cauldrons would look as follows:
| Cauldron | Current MIM Allocated | New MIM Allocation |
|---|---|---|
| gmBTC / BTC | $1M | $5M |
| gmETH / ETH | $1M | $5M |
| gmETH / USDC | $7.25M | $10M |
| gmBTC / USDC | $8M | $10M |
| gmSOL / USDC | $3.25M | $4M |
| gmLINK / USDC | $36K | $1.5M |
| gmARB / USDC | $1K | $500K |
| Total Allocation | ~$25.5M | ~$36M |
All other parameters agreed upon in previous SAIPs will remain unchanged. A new SAIP will be required for further changes to parameters such as interest rate, liquidation fee, mint fee, MCR, etc.
Final allocation across the cauldrons will be determined based on liquidity conditions and borrowing demand.
Conclusion:
This proposal to increase the borrowing cap across GM cauldrons to $36 million aligns with the continued growth of the GMX ecosystem and user demand for leveraged borrowing. By carefully managing risk and maintaining strong liquidation buffers, this expansion ensures the sustainability and profitability of the protocol while fostering greater capital efficiency.