Risk Parameter Updates for 2 Collateral Assets
01Summary
Gauntlet proposes adjusting collateral factor risk parameters for 2 Compound assets (USDC and cDAI) to align with the community-chosen Moderate risk level following recent market conditions. These updates maintain overall protocol risk tolerance while increasing borrow usage by 11 basis points with no change in Value at Risk or Liquidations at Risk.
- Type
- parameter change
Key changes
- Set collateral factor for USDC (0x39AA39c021dfbaE8faC545936693aC917d5E7563) to 0.855 (85.5%)(high)
- Set collateral factor for cDAI (0x5d3a536E4D6DbD6114cc1Ead35777bAB948E3643) to 0.835 (83.5%)(high)
- Increase borrow usage by 11 basis points while maintaining Value at Risk and Liquidations at Risk levels(medium)
Notable concerns
- Parameter changes follow recent market crash
- Updates are part of ongoing Dynamic Risk Parameters program
- Risk optimization balances insolvencies, liquidations, and borrow usage metrics
Generated by Kvorum
02Description
Risk Parameter Updates for 2 Collateral Assets
Simple Summary
A proposal to adjust two (2) parameters for two (2) Compound assets.
Background
Gauntlet's simulation engine has ingested the latest market and liquidity data following the recent market crash. This proposal is a batch update of risk parameters to align with the Moderate risk level chosen by the Compound community. These parameter updates are the thirteenth of Gauntlet's regular parameter recommendations as part of Dynamic Risk Parameters.
Full proposal and forum discussion
Motivation and Specification
This set of parameter updates seeks to maintain the overall risk tolerance of the protocol while making risk trade-offs between specific assets.
Our parameter recommendations are driven by an optimization function that balances 3 core metrics: insolvencies, liquidations, and borrow usage. Our parameter recommendations seek to optimize for this objective function. For more details, please see Gauntlet's Parameter Recommendation Methodology and Gauntlet's Model Methodology.
Dashboard
Gauntlet has launched the Compound Risk Dashboard. The community should use the Dashboard to understand better the updated parameter suggestions and general market risk in Compound.
Value at Risk represents the 95th percentile insolvency value that occurs from simulations we run over a range of volatilities to approximate a tail event.
Liquidations at Risk represents the 95th percentile liquidation volume that occurs from simulations we run over a range of volatilities to approximate a tail event.
These parameter changes increase borrow usage by 11 basis points with no change in Value at Risk or Liquidations at Risk.
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.
03Mismatch analysis
The description is a standard Gauntlet risk-parameter proposal stating that two parameters (collateral factors) will be adjusted for two Compound cToken markets, consistent with the two decoded _setCollateralFactor calls on the Comptroller contract. The description does not specify the exact assets or numeric values (85.5% and 83.5%), instead deferring to linked forum/dashboard materials for specifics — this is typical summarization for this proposal template and not a red flag. Since no explicit numeric or target claims are made in the prose that could be checked against the calldata, there is nothing to contradict: the action count (2), action type (collateral factor updates), and general intent (risk parameter tuning) all align with the two decoded actions. Confidence is medium rather than high because the description lacks enough granularity to fully verify the specific values, but nothing in the calldata appears to diverge from what is described (no unexpected transfers, role changes, or unrelated targets). No omissions, extra claims, or value mismatches were identified given the information provided. Consequently this proposal is deemed consistent with a medium confidence level.
Generated by Kvorum
04Actions
- Target
- 0x3d98…cd3b
- Value
- 0 wei
- Function
- _setCollateralFactor(address,uint256)
- Arguments
{ "0": "0x39AA39c021dfbaE8faC545936693aC917d5E7563", "1": "855000000000000000" }- Calldata
- Target
- 0x3d98…cd3b
- Value
- 0 wei
- Function
- _setCollateralFactor(address,uint256)
- Arguments
{ "0": "0x5d3a536E4D6DbD6114cc1Ead35777bAB948E3643", "1": "835000000000000000" }- Calldata
05Tally
Summed from votes
06Voters
| Voter | Choice | % of total | Rationale | ||
|---|---|---|---|---|---|
| EA0xea6c…3bf7 | For | 306.1K | 44.60% | — | 4y ago |
| 880x88fb…3981 | For | 105.1K | 15.31% | — | 4y ago |
| 8D0x8d07…a265 | For | 70K | 10.20% | — | 4y ago |
| 130x13bd…8548 | For | 50K | 7.29% | — | 4y ago |
| 070x0703…961b | For | 50K | 7.29% | — | 4y ago |
| B70xb777…e1a5 | For | 50K | 7.29% | — | 4y ago |
| DC0xdc1f…e432 | For | 50K | 7.29% | — | 4y ago |
| DAdakeshi.eth0xe3c9…6b21 | For | 5K | 0.73% | — | 4y ago |
| 840x84e3…5a95 | For | 11.5 | 0.00% | — | 4y ago |
| 710x71e2…0d9a | For | 4.6 | 0.00% | — | 4y ago |
| BF0xbf4c…5a7c | For | 3.1 | 0.00% | — | 4y ago |
| 940x9497…6eea | For | 2.8 | 0.00% | — | 4y ago |
| 230x2368…e99d | For | 2.8 | 0.00% | — | 4y ago |
| DD0xdd4a…86ba | For | 2.8 | 0.00% | — | 4y ago |
| E10xe1d1…951a | For | 2.8 | 0.00% | — | 4y ago |
| 050x05ac…646d | For | 2.7 | 0.00% | — | 4y ago |
| 610x61d9…b63f | For | 2.7 | 0.00% | — | 4y ago |
| F90xf977…5d89 | For | 2.7 | 0.00% | — | 4y ago |
| 740x7407…b016 | For | 2.5 | 0.00% | — | 4y ago |
| FC0xfc5a…2263 | For | 2.1 | 0.00% | — | 4y ago |
| 8F0x8f81…364e | For | 1.7 | 0.00% | — | 4y ago |
| DA0xda8c…3cf2 | For | 1.3 | 0.00% | — | 4y ago |
| 260x26a6…e2cc | For | 1.1 | 0.00% | — | 4y ago |
| FB0xfb27…6560 | For | 1 | 0.00% | — | 4y ago |
| 910x910c…3598 | For | 1 | 0.00% | — | 4y ago |
| 910x9194…fcee | For | 1 | 0.00% | — | 4y ago |
| 980x9859…be6e | For | 1 | 0.00% | — | 4y ago |
| 3C0x3ccd…dd5b | For | 1 | 0.00% | — | 4y ago |
| 1C0x1ccb…c0d0 | For | 1 | 0.00% | — | 4y ago |
| BF0xbffa…1ca9 | For | 1 | 0.00% | — | 4y ago |
| 1A0x1ac6…e6df | For | 1 | 0.00% | — | 4y ago |
| 3B0x3b59…22f2 | For | 1 | 0.00% | — | 4y ago |
| 0E0x0e4c…04c3 | For | 1 | 0.00% | — | 4y ago |
| 900x90c8…3ef0 | For | 1 | 0.00% | — | 4y ago |
| 2B0x2ba3…4a2d | For | 1 | 0.00% | — | 4y ago |
| 860x8655…6267 | For | 1 | 0.00% | — | 4y ago |
| 430x43de…552a | For | 1 | 0.00% | — | 4y ago |
| 980x987f…e999 | For | 1 | 0.00% | — | 4y ago |
| 810x81dd…b9ad | For | 1 | 0.00% | — | 4y ago |
| DA0xdabc…3040 | For | 1 | 0.00% | — | 4y ago |
| 190x196a…411f | For | 0.9 | 0.00% | — | 4y ago |
| 4C0x4c49…1757 | For | 0.8 | 0.00% | — | 4y ago |
| 8F0x8fbb…774c | For | 0.7 | 0.00% | — | 4y ago |
| B20xb213…7d03 | For | 0.6 | 0.00% | — | 4y ago |
| ED0xedb7…8bc2 | For | 0.5 | 0.00% | — | 4y ago |
| 8F0x8fa3…8724 | For | 0.5 | 0.00% | — | 4y ago |
| F40xf471…2da8 | For | 0.5 | 0.00% | — | 4y ago |
| B80xb8a9…6756 | For | 0.5 | 0.00% | — | 4y ago |
| 590x5997…1f02 | For | 0.5 | 0.00% | — | 4y ago |
| 3B0x3be4…7b47 | For | 0.5 | 0.00% | — | 4y ago |
07Forum
- Risk Parameter Updates 2022-06-15 ↗discourse · high confidence
- Dynamic Risk Parameters ↗discourse · high confidence
Arguments for
- The proposed parameter increases maintain overall protocol risk at safe levels while improving capital efficiency, as Gauntlet's simulations show no change in Value at Risk or Liquidations at Risk.— pauljlei
- Gauntlet is recommending smaller increases than its simulations suggest (85.5% for USDC instead of 87%), demonstrating a risk-conscious approach given market uncertainty.— pauljlei
Arguments against
- In current severe macroeconomic conditions (rate hikes, quantitative tightening, high inflation, geopolitical conflict), the protocol should be more conservative rather than increasing collateral factors that enable more user leverage and risk.— Sirokko
- The community chose a Moderate risk profile eight months ago under very different market conditions; given the dramatically changed environment, the community should be asked to revisit its risk preference before proceeding with parameter increases.— Sirokko
- Capital efficiency gains from higher collateral factors are unlikely in current market conditions where users are not borrowing more, while the changes increase liquidation risk for users by lowering the price levels at which they would be liquidated.— Sirokko
Unresolved concerns
- Whether Gauntlet's simulations for a Moderate risk strategy should be presented alongside Conservative and Aggressive alternatives so the community can make an informed choice about its current risk tolerance in the changed macroeconomic environment.— Sirokko
Notable participants
- jake.aujusProposal initiator who posted the risk parameter update specification.
- pauljleiGauntlet representative who defended the recommendation, addressed concerns, and explained the methodology.
- SirokkoPrimary skeptic who questioned whether the proposal aligns with appropriate risk levels given macroeconomic deterioration since the original risk profile was chosen.
- inkymazeParticipant who notified the community and delegates in advance that the proposal would go live.
Generated by Kvorum
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