Supply/Borrow Caps

Supply and borrow caps are mechanisms introduced in Hana money market to reduce the risk of significant financial loss, insolvency, and to ensure the platform's stability. These caps are adjustable and can be set based on the liquidity available on-chain and the total asset volume managed by the protocol.

Caps will be adjusted as market conditions evolve, especially during the early stage of the Taiko mainnet launch and during extreme market conditions.

Borrow Caps

Borrow caps set a limit on how much of a particular asset users can borrow . This is a safeguard against excessive borrowing that could lead to financial instability and insolvency, especially when the market is volatile.

E.g. If the current Borrow Cap for WETH market is set at 1,000 WETH, and the total borrowed amount in the WETH market hits 1,000 WETH, no more new borrows can be initiated for WETH.

Supply Caps

Supply caps limit the amount of an asset that can be deposited into Hana, reducing the platform's exposure to high-risk assets and preventing issues that could arise from an overflow of deposits.

E.g. If the supply cap for WBTC market is set at 100 WBTC, and the current total WBTC deposit is 100 WBTC, no more WBTC can be added to the WBTC market within Hana.