Risk Parameter Updates for 5 Collateral Assets
01Summary
Proposal to adjust risk parameters (collateral factors and borrow caps) across 5 Compound V2 assets in alignment with the community's chosen Moderate risk level. Changes include collateral factor decreases expected to result in ~$1.4k in risk-off liquidations in dust accounts, with 10 accounts identified as at-risk for liquidation.
- Type
- parameter change
Key changes
- Set borrow cap for cToken 0xFAce851a4921ce59e912d19329929CE6da6EB0c7 to 125,000 units(medium)
- Set borrow cap for cToken 0x35A18000230DA775CAc24873d00Ff85BccdeD550 to 700,000 units(medium)
- Reduce collateral factor for cToken 0x6C8c6b02E7b2BE14d4fA6022Dfd6d75921D90E4E to 0.62 (62%)(high)
- Reduce collateral factor for cToken 0x70e36f6BF80a52b3B46b3aF8e106CC0ed743E8e4 to 0.62 (62%)(high)
- Adjust collateral factor for cToken 0x4B0181102A0112A2ef11AbEE5563bb4a3176c9d7 to 0.67 (67%)(high)
Notable concerns
- 10 accounts identified as at risk for liquidation due to collateral factor decreases
- Projected ~$1.4k in supply of risk-off liquidations expected in dust accounts
- Proposal relies on Gauntlet's simulation engine and market data analysis
- Community agreement required on risk-off framework and Moderate risk level
Generated by Kvorum
02Description
Risk Parameter Updates for 5 Collateral Assets
Simple Summary
A proposal to adjust five (5) risk parameters (collateral factor & borrow cap) across five (5) Compound V2 assets.
The community has aligned on a risk off framework.
Background
Gauntlet's simulation engine has ingested the latest market and liquidity data. These recommendations are Gauntlet's regular parameter recommendations as part of Dynamic Risk Parameters and align with the Moderate risk level chosen by the Compound community.
Full proposal and forum discussion
Specification
The CF decreases result in ~$1.4k in supply of projected risk-off liquidations in dust accounts. We will continue to run liquidation analyses throughout the proposal to measure whether the CF decreases will result in any risk-off liquidations.
|Accounts At Risk for Liquidation|
0X19F91BC93551F09DAF556258CBF335EB0AB7C709 0X2565F8E0B33F2D3BB1C0E2DD5FBB972DF48654C8 0X46BA9970E469A212084527AEB321C3F3ED53D9BE 0X46CDB38A6EB7C1C42A452A4C107EBD79BCB2A7AF 0X70D8E4AB175DFE0EAB4E9A7F33E0A2D19F44001E 0XA8672C3CEF0DCE305102F20AC820C921C91FF7E2 0XB92BC5A49D57F43A7DA0728BBFCB649EB839067E 0XBB3F49E5FDC0FDCE8A3E97C563C7C6E9188FC0A4 0XDEF1138F24960F1B048BB2EC16D9E3F5EC9735C2 0XFB5CAAE76AF8D3CE730F3D62C6442744853D43EF
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.
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 states the proposal adjusts 5 risk parameters (collateral factor and/or borrow cap) across 5 Compound V2 assets, consistent with Gauntlet's standard Dynamic Risk Parameter recommendations. The decoded calldata contains 4 actions: one _setMarketBorrowCaps call affecting 2 cTokens (2 borrow-cap parameters) and three _setCollateralFactor calls affecting 3 distinct cTokens (3 CF parameters). Together this totals 5 parameter changes across 5 unique assets, matching the prose's stated scope exactly. The actual numeric values for collateral factors and borrow caps are only presented in an embedded screenshot in the description rather than as text, so I cannot directly verify each individual number against the calldata, but the structural claim (5 parameters, 5 assets, CF & borrow cap types) aligns precisely with the decoded actions, and nothing in the calldata suggests an out-of-scope action (e.g., no transfers, role changes, or unrelated contract calls). Given the inability to cross-check exact numeric values from the image, confidence is medium rather than high, but no contradictions or omissions are evident from what can be verified.'
Generated by Kvorum
04Actions
- Target
- 0x3d98…cd3b
- Value
- 0 wei
- Function
- _setMarketBorrowCaps(address[],uint256[])
- Arguments
{ "cTokens": [ "0xFAce851a4921ce59e912d19329929CE6da6EB0c7", "0x35A18000230DA775CAc24873d00Ff85BccdeD550" ], "newBorrowCaps": [ "125000000000000000000000", "700000000000000000000000" ] }- Calldata
- Target
- 0x3d98…cd3b
- Value
- 0 wei
- Function
- _setCollateralFactor(address,uint256)
- Arguments
{ "cToken": "0x6C8c6b02E7b2BE14d4fA6022Dfd6d75921D90E4E", "newCollateralFactorMantissa": "620000000000000000" }- Calldata
- Target
- 0x3d98…cd3b
- Value
- 0 wei
- Function
- _setCollateralFactor(address,uint256)
- Arguments
{ "cToken": "0x70e36f6BF80a52b3B46b3aF8e106CC0ed743E8e4", "newCollateralFactorMantissa": "620000000000000000" }- Calldata
- Target
- 0x3d98…cd3b
- Value
- 0 wei
- Function
- _setCollateralFactor(address,uint256)
- Arguments
{ "cToken": "0x4B0181102A0112A2ef11AbEE5563bb4a3176c9d7", "newCollateralFactorMantissa": "670000000000000000" }- Calldata
05Tally
Summed from votes
06Voters
No votes recorded yet.
07Forum
- Compound V2: Risk Parameter Updates 2022-12-21 ↗discourse · high confidence
- Dynamic Risk Parameters ↗discourse · high confidence
Arguments for
- The parameter adjustments reduce insolvency risk by 65.5% and liquidation risk by $440k while maintaining overall protocol risk tolerance through balanced trade-offs across assets.— pauljlei
- Decreasing collateral factors for BAT and COMP addresses specific high-risk borrower positions that drive insolvency in simulated tail events.— pauljlei
- Increasing LINK and UNI borrow caps accommodates growing demand from large borrowers and provides necessary buffer capacity without exceeding safe utilization levels.— pauljlei
- Gauntlet's agent-based simulations use comprehensive real-time market data to identify complex risk relationships that cannot be expressed as simple heuristics.— pauljlei
Arguments against
None surfaced.
Unresolved concerns
- The lack of independent verification framework makes it difficult for community members to understand and challenge Gauntlet's risk parameter recommendations.— VonNeumann2022
- Initial on-chain proposal did not render function calls correctly in the UI, raising concerns about proposal verification and correctness.— jmo
Notable participants
- pauljleiGauntlet risk analyst who authored the proposal with detailed risk analysis and parameter recommendations.
- jmoProtocol developer who provided updates on proposal deployment and UI rendering issues.
- VonNeumann2022Community member who raised structural concerns about independent verification of risk models.
Generated by Kvorum
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