Upgrade cUSDT Interest Rate Model
01Summary
Upgrade cUSDT interest rate model to JumpRateModelV2 with standardized parameters matching cDAI: 0% base rate, 4% borrow rate at kink, 80% utilization kink, and 25% borrow rate at 100% utilization. This is part of an effort to standardize interest rate models across Compound's stablecoin offerings.
- Type
- contract upgrade
Key changes
- Replace cUSDT interest rate model with JumpRateModelV2 contract(high)
- Reduce base rate from 2% to 0%(high)
- Reduce borrow rate at kink from 22% to 4%(high)
- Lower kink utilization from 90% to 80%(high)
- Reduce borrow rate at 100% utilization from 49% to 25%(high)
Notable concerns
- Significant reduction in borrow rates may impact cUSDT supplier yields
- Changes represent a major shift in cUSDT interest rate structure from current parameters
Generated by Kvorum
02Description
Upgrade cUSDT Interest Rate Model
Recently, Dharma led the community to release a new upgradable interest rate model contract for cDAI based on the new JumpRateModelV2. This proposal updates the cUSDT interest rate model to a recently deployed JumpRateModelV2 with the same parameters as the current cDAI interest rate model:
- 0% base rate (current 2%)
- 4% borrow rate at kink (current 22%)
- Kink at 80% utilization (current 90%)
- 25% borrow rate at 100% utilization (current 49%) This proposal begins the effort of setting a standardized interest rate model for all stablecoins on Compound.
New interest rate model contract
Proposed cUSDT interest rate model:
Proposal by Arr00
03Mismatch analysis
The proposal describes a single, well-scoped action: replacing cUSDT's interest rate model with a newly deployed JumpRateModelV2 contract at a specific address. The decoded calldata contains exactly one action calling _setInterestRateModel(address) with the argument 0xFB564da37B41b2F6B6EDcc3e56FbF523bD9F2012, which matches the address linked in the description as the 'New interest rate model contract'. The target address of the call (0xf650c3d88d12db855b8bf7d11be6c55a4e07dcc9) is not independently verifiable as cUSDT from the data given, but it is consistent with the described intent of upgrading a cToken's rate model, and there is only one action, matching the singular claim in the proposal. The specific rate parameters (0% base, 4% at kink, 80% kink, 25% at 100%) are baked into the already-deployed target contract rather than passed as calldata arguments in this transaction, so they cannot be independently verified against the calldata, but this is standard for this type of Compound governance action and does not constitute a discrepancy under the given calldata. No omitted, extra, or mismatched actions are apparent. Confidence is high because the single action directly corresponds to the single claim, and the address matches the externally referenced contract.,
Generated by Kvorum
04Actions
- Target
- 0xf650…dcc9
- Value
- 0 wei
- Function
- _setInterestRateModel(address)
- Arguments
{ "0": "0xFB564da37B41b2F6B6EDcc3e56FbF523bD9F2012" }- Calldata
05Tally
Summed from votes
06Voters
No votes recorded yet.
07Forum
- Update cUSDT interest rate model ↗discourse · high confidence
Arguments for
- USDT's interest rate model should be upgraded to match DAI's latest JumpRateModelV2 parameters, following the pattern that already reduced DAI utilization and risk.— arr00, compoundbart, brendan_dharma
- Migrating to the new model allows future USDT and DAI rate changes to be set directly through governance without deploying additional contracts.— rleshner
- Community verification (bytecode matching via saddle, checking Timelock ownership) confirmed the deployed contract matches the official repo and is properly configured, making the upgrade safe to proceed.— arr00, blck
- Gauntlet supports the proposal as a reasonable, conservative form of dollar-denominated rate equalization even while flagging methodological concerns.— tarun
Arguments against
- The chosen parameters (0% base rate, 80% kink, etc.) are somewhat arbitrary and future rate model changes should instead be data-driven, using simulation and metrics like supplier concentration and empirical utilization.— tarun
- An alternative approach of simply reusing DAI's already-deployed interest rate model contract for USDT (rather than deploying a new one) was suggested, though it would reduce future flexibility to separate the two markets.— blck
- Tying USDT's rate model too closely to DAI's (e.g., by sharing the same contract) is undesirable because it could make USDT rates move in response to unrelated MakerDAO actions.— arr00
Unresolved concerns
- A structural inconsistency was noted where the interest rate model contract relies on an assumed reserve factor to derive supply rates, which is technically incorrect when reserve factors differ between markets like cDAI and cUSDT.— rleshner, arr00
- A non-technical community member questioned how the code technically applies the new interest rate model (which code sets the new address) and whether the contract had received sufficient developer code review.— dakeshi
- Gauntlet's proposal for a more rigorous, data-driven and simulation-based methodology for setting future interest rate parameters (base rate, kink, borrow rate at kink/100%) was not adopted or further validated in this proposal.— tarun
Notable participants
- arr00Proposer who authored the proposal, deployed the new interest rate model contract, and responded to technical and verification questions.
- rleshnerCompound co-founder who pushed for community verification of the contract and highlighted a technical nuance about reserve factor handling.
- tarunGauntlet team member who expressed conditional support while critiquing the arbitrary parameter selection and proposing a data-driven alternative methodology.
- blckCommunity member who performed independent bytecode verification and proposed an alternative implementation using DAI's existing rate model contract.
- brendan_dharmaRepresented Dharma, expressing strong support for the proposal.
- compoundbartEarly commenter who endorsed the upgrade and raised a related question about differing reserve factors across markets.
- dakeshiNon-technical community member who sought clarification on the technical implementation and code review process before voting.
Generated by Kvorum
08Similar proposals
- compoundexecutedUpgrade cUSDC Interest Rate Model92%
- compoundexecutedUpgrade cDai Interest Rate Model87%
- compoundexecutedUpdate DAI Interest Rate Model to Better Accommodate Zero Stability Fee75%
- compounddefeatedUpdate cDAI Interest Rate Model75%
- compoundexecutedSemi-Permanent Gas Saving Measures for the DAI Market66%