This proposal requests raising the static composition limit for the Eureka-bridged USDT and ETH within the Alloyed USDT and ETH.

• USDT.eth.atom from 20% to 75%
• ETH.atom from 20% to 75%

Proposal Details

Eureka has been in use for around 8 months as a Canonical Bridge Service Provider with no known security incidents or bridge halts reported during that period. As alloyed assets are simplified and the number of component variants is reduced, Eureka-bridged assets will necessarily make up a larger share of the remaining composition. Existing low caps, therefore, create unnecessary friction and require adjustment to support regular operation.

Current usage is 17.8% out of 20% for USDT.eth.atom, 11.3% out of 20% for ETH.atom.

This proposal asks for both to be increased to 75% to match the caps on the Axelar bridged variants and minimize the need for future governance proposals to expand in stages.

This adjustment increases the alloy asset exposure to Eureka across both alloys from ~$600k to ~$2.25m, increasing exposure to Eureka/IBC v2 in the event of a failure or pause. No such incidents have occurred during Eureka’s operation to date, and caps remain governance-controlled should conditions change. A moderation subDAO may also temporarily freeze movements in and out of the Alloy while a security issue is assessed.

Token Information

• USDT.eth.atom, currently capped at 20%, is bridged USDT from Ethereum via the Cosmos Hub and added to Alloyed USDT in Proposal 930.
• ETH.atom, currently capped at 20%, is bridged Ethereum added to Alloyed ETH in Proposal 929.

Details on current liquidity, composition, and cap levels can be found on the Alloyed Asset Dashboard

WBTC.eth.atom adjustment is not proposed here, as Alloyed BTC currently has high exposure to WBTC through existing sources.

About Eureka

Eureka is an interoperability protocol built on IBC v2, a more efficient and transparent solution for cross-chain asset transfers. Unlike traditional bridges, Eureka enables permissionless, secure, and cost-effective asset transfers, bringing new liquidity to the Cosmos ecosystem via the Cosmos Hub and facilitating the expansion of multichain applications.

Website: https://cosmos.network

Forum Post: https://forum.osmosis.zone/t/increase-static-composition-limit-on-eureka-assets/3976