This proposal includes the changes from 2 separate Discourse discussions.

[PCP-4] Supply and Borrow Cap Updates

Context & Motivation With the introduction of Native USDC rewards for the Native USDC market (via discussion here and subsequent tally vote here) and ever changing market dynamics, it is important to frequently re-assess market parameters on Seamless Protocol.

As such, a broad examination and update to market supply and borrow caps would be great to have (and also have frequently given current market conditions).

Additionally, a specifically pressing matter is the Native USDC market that has now met supply caps. With the growing transition of USDbC to Native USDC and the introduction of aforementioned Native USDC rewards, it would be prudent to re-examine these caps and identify if they can be lifted to facilitate the transition of USDbC to Native USDC and growth of the protocol.

In conjunction with advisory/consulting (offchain) of professional risk service providers, community contributors have crafted the following proposal.

Proposal: Supply Caps

• USDbC
  • No change
• Native USDC
  • Raise from 2.7M to 8M
• wstETH
  • Raise from 400 to 800

Borrow Caps

• USDbC
  • Raise from 10M to 15M
• Native USDC
  • Raise from 2.5M to 6M
• wstETH
  • Raise from 40 to 400

Specifications/Technicals Given the potential for the Native USDC rewards on the Native USDC market to have limited growth impact, and the timing of these rewards to begin sometime tomorrow, it is suggested this proposal is also given urgency and the community utilizes the fast track procedure.

Smart Contract Upgrades

Overview

I am requesting support from the community for the following upgrades to the Seamless Protocol smart contracts. I am also requesting to fast track this post if it receives the necessary community support.

Upgrade 1 - Lending Pool Implementation

A member of the Aave community, BGD Labs, has privately reached out to certain Seamless contributors to notify them of a potential issue with the Aave lending pool implementation. No Seamless funds are currently at risk but we should never the less apply this fix as part of the Seamless community’s commitment to security.

As the details of the fix have not been yet been publicly disclosed, I will simply link relevant the relevant past Aave governance discussion here.

Technical details:

• New lending pool implementation is deployed and verified. Basecan link
• Governance should execute the setPoolImpl function on the PoolAddressesProvider contract. Basescan link

Upgrade 2 - Price Oracle Sentinel

Seamless Protocol users have periodically reported errors when borrowing, they sometimes receive error code 59. This error code is supposed to indicate that the Base L2 sequencer has failed it’s health check (i.e.: it is currently down), reference. Seamless contributors have discovered a bug such that the Price Oracle Sentinel thinks the sequencer is down when it is in fact not down. More details can be found in this Github issue.

Technical details:

• New price oracle sentinel is deployed and verified. Basescan link
• Governance should execute the setPriceOracleSentinel function on the PoolAddressesProvider contract. Basescan link