KVORUM
compoundSource: Compound governor bravo · #186

[Gauntlet] 2023-10-09: Compound v2 Deprecation (Phase 2)

executedOct 14, 2023, 03:47 PM UTCby680x683a…6c02

01Summary

AISummary by Kvorumclaude-haiku-4-5

Gauntlet proposes Phase 2 of Compound v2 deprecation by reducing collateral factors on 7 cTokens (cAAVE, cCOMP, cLINK, cMKR, cSUSHI, cYFI, cZRX) by 5 percentage points each and increasing v2 USDC reserve factor from 30% to 45% to encourage migration to v3.

Type
parameter change

Key changes

  • Decrease cAAVE collateral factor from 73% to 68%(medium)
  • Decrease cCOMP collateral factor from 60% to 55%(medium)
  • Decrease cLINK collateral factor from 79% to 74%(medium)
  • Decrease cMKR collateral factor from 73% to 68%(medium)
  • Decrease cSUSHI collateral factor from 67% to 62%(medium)
  • Decrease cYFI collateral factor from 75% to 70%(medium)
  • Decrease cZRX collateral factor from 65% to 60%(medium)
  • Increase v2 USDC reserve factor from 30% to 45%(high)

Notable concerns

  • Changes continue the deprecation of Compound v2, which may affect users with active positions in v2 collateral assets
  • Reduced collateral factors increase liquidation risk for positions using affected assets as collateral
  • Users are incentivized to migrate from v2 to v3
Contracts0x3d9819210a31b4961b30ef54be2aed79b9c9cd3b0x39aa39c021dfbae8fac545936693ac917d5e75630xe65cdB6479BaC1e22340E4E755fAE7E509EcD06c0x70e36f6BF80a52b3B46b3aF8e106CC0ed743E8e40xFAce851a4921ce59e912d19329929CE6da6EB0c70x95b4eF2869eBD94BEb4eEE400a99824BF5DC325b0x4B0181102A0112A2ef11AbEE5563bb4a3176c9d70x80a2AE356fc9ef4305676f7a3E2Ed04e12C339460xB3319f5D18Bc0D84dD1b4825Dcde5d5f7266d407
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provider: anthropic
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02Description

235 words

[Gauntlet] 2023-10-09: Compound v2 Deprecation (Phase 2)

Simple Summary

A proposal from Gauntlet to adjust 8 Compound v2 risk parameters for Phase 2 of the Compound v2 Deprecation.

Gauntlet recommends the following changes:

  • Decrease cAAVE Collateral Factor from 73% to 68%
  • Decrease cCOMP Collateral Factor from 60% to 55%
  • Decrease cLINK Collateral Factor from 79% to 74%
  • Decrease cMKR Collateral Factor from 73% to 68%
  • Decrease cSUSHI Collateral Factor from 67% to 62%
  • Decrease cYFI Collateral Factor from 75% to 70%
  • Decrease cZRX Collateral Factor from 65% to 60%
  • Increase v2 USDC Reserve Factor from 30% to 45%.

For more details, see the full forum post here.

Motivation

In this September 2022 snapshot vote, the community voted that each asset’s Collateral Factor may be reduced by an absolute percentage of up to 5%. After our analysis, Gauntlet recommends this max 5% decrease for each lowly supplied collateral asset in order to further deprecate the v2 market.

Additionally, Gauntlet recommends continuing to raise the v2 USDC Reserve Factor to incentivize v2 USDC suppliers to migrate to v3.

Full proposal and forum discussion

Specification

The proposal updates the parameters using the _setReserveFactor and _setCollateralFactor methods of the relevant cToken contracts.

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

AIMismatch analysis by Kvorumclaude-sonnet-5
Consistent

I mapped each of the 8 decoded actions to its cToken address using known Compound v2 cToken addresses (cAAVE, cCOMP, cLINK, cMKR, cSUSHI, cYFI, cZRX, cUSDC) and verified the encoded uint256 values against the percentages claimed in the description after standard 18-decimal fixed-point conversion (e.g., 680000000000000000 = 68%). All 7 collateral factor changes and the 1 reserve factor change exactly match the assets and target percentages listed in the Simple Summary. No extra actions, missing actions, wrong targets, or value mismatches were found. The specification section correctly describes the mechanism (_setReserveFactor and _setCollateralFactor calls) used. Overall the proposal description is a faithful and complete representation of the on-chain calldata.

Generated by Kvorum
model: claude-sonnet-5
provider: anthropic
profile: anthropic-strong-v1
prompt: v1.0
generated: 2mo ago
Review the decoded actions ↗

04Actions

8 total
#0_setCollateralFactor(address,uint256)chain 0x1
Target
0x3d98…cd3b
Value
0 wei
Function
_setCollateralFactor(address,uint256)
Arguments
{
  "0": "0xe65cdB6479BaC1e22340E4E755fAE7E509EcD06c",
  "1": "680000000000000000"
}
Calldata
#1_setCollateralFactor(address,uint256)chain 0x1
Target
0x3d98…cd3b
Value
0 wei
Function
_setCollateralFactor(address,uint256)
Arguments
{
  "0": "0x70e36f6BF80a52b3B46b3aF8e106CC0ed743E8e4",
  "1": "550000000000000000"
}
Calldata
#2_setCollateralFactor(address,uint256)chain 0x1
Target
0x3d98…cd3b
Value
0 wei
Function
_setCollateralFactor(address,uint256)
Arguments
{
  "0": "0xFAce851a4921ce59e912d19329929CE6da6EB0c7",
  "1": "740000000000000000"
}
Calldata
#3_setCollateralFactor(address,uint256)chain 0x1
Target
0x3d98…cd3b
Value
0 wei
Function
_setCollateralFactor(address,uint256)
Arguments
{
  "0": "0x95b4eF2869eBD94BEb4eEE400a99824BF5DC325b",
  "1": "680000000000000000"
}
Calldata
#4_setCollateralFactor(address,uint256)chain 0x1
Target
0x3d98…cd3b
Value
0 wei
Function
_setCollateralFactor(address,uint256)
Arguments
{
  "0": "0x4B0181102A0112A2ef11AbEE5563bb4a3176c9d7",
  "1": "620000000000000000"
}
Calldata
#5_setReserveFactor(uint256)chain 0x1
Target
0x39aa…7563
Value
0 wei
Function
_setReserveFactor(uint256)
Arguments
{
  "0": "450000000000000000"
}
Calldata
#6_setCollateralFactor(address,uint256)chain 0x1
Target
0x3d98…cd3b
Value
0 wei
Function
_setCollateralFactor(address,uint256)
Arguments
{
  "0": "0x80a2AE356fc9ef4305676f7a3E2Ed04e12C33946",
  "1": "700000000000000000"
}
Calldata
#7_setCollateralFactor(address,uint256)chain 0x1
Target
0x3d98…cd3b
Value
0 wei
Function
_setCollateralFactor(address,uint256)
Arguments
{
  "0": "0xB3319f5D18Bc0D84dD1b4825Dcde5d5f7266d407",
  "1": "600000000000000000"
}
Calldata

05Tally

Summed from votes

Voters81
VP participating709.2K
Outcome (current)For
Current support100%

06Voters

81 total

No votes recorded yet.

07Forum

AIForum synthesis by Kvorumclaude-haiku-4-5
sentiment · favorablethread · constructive

Arguments for

  • Decreasing collateral factors for low-TVL v2 assets aligns with community-voted September 2022 guidance allowing up to 5% reductions per asset to accelerate v2 deprecation.— Gauntlet
  • Increasing v2 USDC reserve factor from 30% to 45% incentivizes migration to v3 where USDC earns higher net APR (4.36% vs 2.10%).— Gauntlet
  • The recommended changes would not immediately cause new liquidatable positions at the time of proposal, with only 7 positions across $432k in borrows moderately affected.— Gauntlet
  • AAVE utilization on v2 is low at 5.78%, so potential liquidations from the cAAVE collateral factor decrease would not cause liquidity crunches.— Gauntlet

Arguments against

None surfaced.

Unresolved concerns

  • One large cAAVE supplier (46.3% of total cAAVE supply) with $366.8k supply and $233.2k borrows faces significant health factor deterioration from 1.148 to 1.07, becoming 49.65% closer to liquidation.— Gauntlet
  • The aggressive, frequent rebalancing behavior of the most affected user makes it difficult to predict or prevent their liquidation even with favorable market timing.— Gauntlet

Notable participants

  • GauntletProposer conducting analysis and recommendations for v2 deprecation Phase 2, monitoring affected user positions and execution outcomes.
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provider: anthropic
profile: anthropic-fast-v1
prompt: v1.0
generated: 2mo ago
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