Risk Parameter Updates for Polygon Compound v3 USDC (5/9/23)
01Summary
Gauntlet proposes parameter adjustments for Polygon Compound v3 USDC: increase daily USDC supply COMP rewards from 0 to 34.73 ($1,268/day), and raise supply caps for WBTC from $12M to $30M, WETH from $22M to $40M, and MATIC from $10M to $20M. The goal is to incentivize USDC suppliers and increase protocol TVL and borrowing activity on Polygon.
- Type
- parameter change
- Funding
- $1268
Key changes
- Increase daily USDC supply COMP rewards from 0 to 34.73 (approximately $1,268/day)(high)
- Increase WBTC supply cap from 400 to 1,000 (approximately $12M to $30M)(high)
- Increase WETH supply cap from 11,000 to 20,000 (approximately $22M to $40M)(high)
- Increase MATIC supply cap from 10M to 20M (approximately $10M to $20M)(high)
Notable concerns
- Asset prices have decreased since proposal recommendation, so stated USD values may be overstated
- High USDC utilization may continue to limit borrower participation despite incentives
Generated by Kvorum
02Description
Risk Parameter Updates for Polygon Compound v3 USDC (5/9/23)
Simple Summary
A proposal from Gauntlet to adjust 3 parameters (supply cap) for 3 Polygon Compound v3 USDC assets, and adjust one COMP rewards distribution.
Gauntlet recommend:
- Increase daily USDC supply COMP rewards from 0 to 34.73 ($1,268/day)
- Increase WBTC supply cap from 400 ($12M) to 1,000 ($30M)
- Increase WETH supply cap from 11k ($22M) to 20k ($40M)
- Increase MATIC supply cap from 10M ($10M) to 20M ($20M)
For more details, see the full forum post here.
Note that asset prices have since decreased, so the true USD values are slightly lower than previously stated.
Motivation
The high USDC utilization combined with the low TVL in the Polygon comet seems to be dissuading large borrowers from joining the protocol, despite the appealing positive Net Borrow APR. Allocating 34.73 daily supply COMP rewards would immediately incentivize USDC suppliers to join the protocol, thereby making more USDC available to be borrowed, and gaining greater momentum for growth in the comet.
Full proposal and forum discussion
Specification
This proposal implements the above changes using Compound V3 cross-chain governance.
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 proposal describes four parameter changes: raising the WBTC, WETH, and MATIC supply caps on Polygon Compound v3 USDC, and increasing the daily COMP reward rate for USDC suppliers from 0 to 34.73/day. The single on-chain action is a cross-chain sendMessageToChild call whose encoded payload contains exactly four sub-calls matching these targets: setSupplyCap calls to the WBTC, WETH, and WMATIC Polygon token addresses with cap values that convert to 1,000 WBTC, 20,000 WETH, and 20,000,000 MATIC respectively (matching the stated new caps after adjusting for each token's decimals), plus a reward-speed-setting call and a companion deploy() call to activate it, consistent with turning on ~34.73 COMP/day rewards. All four described changes are represented in the calldata with values that match once decimal/unit conversions are applied (e.g., WBTC 8 decimals, WETH/MATIC 18 decimals). No extra, missing, or misdirected actions were found, and no numeric value diverges materially from what the description states. This is a standard Gauntlet-style parameter-update proposal and the calldata faithfully implements the described changes.'
Generated by Kvorum
04Actions
- Target
- 0xfe5e…89a2
- Value
- 0 wei
- Function
- sendMessageToChild(address,bytes)
- Arguments
{ "_data": "0x0000000000000000000000000000000000000000000000000000000000000080000000000000000000000000000000000000000000000000000000000000014000000000000000000000000000000000000000000000000000000000000002000000000000000000000000000000000000000000000000000000000000000360000000000000000000000000000000000000000000000000000000000000000500000000000000000000000083e0f742cacbe66349e3701b171ee2487a26e73800000000000000000000000083e0f742cacbe66349e3701b171ee2487a26e73800000000000000000000000083e0f742cacbe66349e3701b171ee2487a26e73800000000000000000000000083e0f742cacbe66349e3701b171ee2487a26e738000000000000000000000000d712ace4ca490d4f3e92992ecf3de12251b975f9000000000000000000000000000000000000000000000000000000000000000500000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000500000000000000000000000000000000000000000000000000000000000000a000000000000000000000000000000000000000000000000000000000000000c000000000000000000000000000000000000000000000000000000000000000e00000000000000000000000000000000000000000000000000000000000000100000000000000000000000000000000000000000000000000000000000000012000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000500000000000000000000000000000000000000000000000000000000000000a0000000000000000000000000000000000000000000000000000000000000014000000000000000000000000000000000000000000000000000000000000001e0000000000000000000000000000000000000000000000000000000000000028000000000000000000000000000000000000000000000000000000000000003000000000000000000000000000000000000000000000000000000000000000064a2ced7fd000000000000000000000000f25212e676d1f7f89cd72ffee66158f5412464450000000000000000000000001bfd67037b42cf73acf2047067bd4f2c47d9bfd6000000000000000000000000000000000000000000000000000000174876e800000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000064a2ced7fd000000000000000000000000f25212e676d1f7f89cd72ffee66158f5412464450000000000000000000000007ceb23fd6bc0add59e62ac25578270cff1b9f61900000000000000000000000000000000000000000000043c33c1937564800000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000064a2ced7fd000000000000000000000000f25212e676d1f7f89cd72ffee66158f5412464450000000000000000000000000d500b1d8e8ef31e21c99d1db9a6444d3adf1270000000000000000000000000000000000000000000108b2a2c28029094000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000044240dd96d000000000000000000000000f25212e676d1f7f89cd72ffee66158f5412464450000000000000000000000000000000000000000000000000000005d9722b4900000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000449627816f00000000000000000000000083e0f742cacbe66349e3701b171ee2487a26e738000000000000000000000000f25212e676d1f7f89cd72ffee66158f54124644500000000000000000000000000000000000000000000000000000000", "_receiver": "0x18281dfC4d00905DA1aaA6731414EABa843c468A" }- Calldata
05Tally
Summed from votes
06Voters
No votes recorded yet.
07Forum
- Compound Polygon v3 USDC - Gauntlet Recommendations (4/28/23) ↗discourse · high confidence
Arguments for
- High USDC utilization (84.2%) is discouraging large borrowers despite positive Net Borrow APR; supply-side COMP rewards will increase USDC supply, reduce utilization, and unlock capital for borrowing.— nlord
- Adding supply rewards incentivizes both USDC suppliers and borrowers by improving Net Earn APR for suppliers and Net Borrow APR for borrowers, driving momentum for protocol growth on Polygon.— nlord
- Increasing supply caps for WBTC, WETH, and MATIC ensures new borrowers' collateral supplies will not be capped, removing a potential barrier to adoption.— nlord
- This proposal is a good way to experiment with different incentive strategies on newer deployments where bootstrapping growth is important.— kevin
Arguments against
None surfaced.
Unresolved concerns
- No clear plan was articulated for when and how the community will analyze the impact of this distribution change or when Polygon distributions should be revisited.— kevin
- As COMP distributions expand across multiple chains, managing limited COMP allocation across nascent markets becomes increasingly difficult without early structural planning.— kevin
Notable participants
- nlordGauntlet representative who authored and substantively detailed the proposal with quantitative analysis.
- kevinCommunity member who endorsed the proposal while requesting clarity on impact measurement and revision timing.
- pauljleiTeam member who confirmed the proposal timeline for on-chain submission.
Generated by Kvorum
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