Gauntlet recommendation to set WETH slope 1 to 3.3% on v3 markets, excluding Ethereum v3

Summary

Gauntlet’s analysis has identified opportunities to adjust interest rate parameters for WETH on v3 markets. This will help to facilitate more Emode borrowing against LST collateral, which may

• drive additional revenue to Aave.
• adjust current risk profile for LST to depend less on onchain liquidity, which has been steadily declining over the past few months. This may be adding risk to the current borrow composition against LST collateral.

Specification

Implementation

The proposal implements changes on Arbitrum, Optimism, Polygon, Metis v3 using the following pre-deployed payloads:

• Arbitrum: 0x1Cdb984008dcEe9d06c28654ed31cf82680EeA62
• Optimism: 0xfC7b55cc7C5BD3aE89aC679c7250AB30754C5cC5
• Polygon: 0x7aa759A57c6b039A93e93683FacD14209EE9A3DD
• Metis: 0x03232b5ee80369A88620615f8328BeEC1884b731
  • Note: The implementation code for Metis can be found here

Changes on Avalanche can be implemented using the pre-deployed steward located at: 0x2ee993533a482fe0f22d0fdf1b84ae1a0537e5ed

Disclaimer

Gauntlet has not received any compensation from any third-party in exchange for recommending any of the actions contained in this proposal.

Copyright

Copyright and related rights waived via CC0.

By approving this proposal, you agree that any services provided by Gauntlet shall be governed by the terms of service available at gauntlet.network/tos.