[Gauntlet] 2023-12-04: Ethereum v3 WETH Interest Rate Curve Recommendations
01Summary
Gauntlet proposes adjusting five interest rate curve parameters for the Ethereum v3 WETH market to incentivize higher utilization and increased TVL. Changes include decreasing the borrow rate base and low slope, increasing both high slopes for borrow and supply rates, and decreasing the supply rate low slope.
- Type
- parameter change
Key changes
- Decrease Annual Borrow Interest Rate Base from 0.0099 to 0.005(medium)
- Decrease Annual Borrow Interest Rate Slope Low from 0.037 to 0.03(medium)
- Increase Annual Borrow Interest Rate Slope High from 0.5172 to 1.0(high)
- Decrease Annual Supply Interest Rate Slope Low from 0.0284 to 0.023(medium)
- Increase Annual Supply Interest Rate Slope High from 0.6067 to 1.0(high)
Generated by Kvorum
02Description
[Gauntlet] 2023-12-04: Ethereum v3 WETH Interest Rate Curve Recommendations
Simple Summary
A proposal from Gauntlet to adjust five Interest Rate (IR) Curve parameters in the Ethereum v3 WETH comet.
Gauntlet recommends the following IR Curve updates:
- Decrease Annual Borrow Interest Rate Base from 0.0099 to 0.005
- Decrease Annual Borrow Interest Rate Slope Low from 0.037 to 0.03
- Increase Annual Borrow Interest Rate Slope High from 0.5172 to 1.0
- Decrease Annual Supply Interest Rate Slope Low from 0.0284 to 0.023
- Increase Annual Supply Interest Rate Slope High from 0.6067 to 1.0
For more details, see the full forum post here.
Motivation
Gauntlet recommends updating the IR curve to incentivize higher utilization and increased TVL in the Ethereum v3 WETH comet.
Full proposal and forum discussion
Specification
The proposal updates the IR curve parameters by using the respective methods in the Configurator.
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
I compared each of the five IR curve parameter values stated in the description (converted from decimal annual rates to 18-decimal fixed-point integers) against the corresponding setter calls in the calldata. All five values match exactly: base 0.005→5e15, borrow slope low 0.03→3e16, borrow slope high 1.0→1e18, supply slope low 0.023→2.3e16, supply slope high 1.0→1e18. The target address (Configurator call referencing the WETH Comet market address) is consistent across all actions. Action index 5, a deployAndUpgradeTo call, is not mentioned in the prose but is the standard, expected mechanism used by Compound III governance proposals to push Configurator changes live to the Comet proxy — this is routine boilerplate for this contract type and not something a reviewer would need flagged. No value, target, or scope mismatches were found, and no claimed action is missing or fabricated. Overall the proposal description faithfully and completely represents the on-chain actions.
Generated by Kvorum
04Actions
- Target
- 0x316f…36e3
- Value
- 0 wei
- Function
- setBorrowPerYearInterestRateBase(address,uint64)
- Arguments
{ "0": "0xA17581A9E3356d9A858b789D68B4d866e593aE94", "1": "5000000000000000" }- Calldata
- Target
- 0x316f…36e3
- Value
- 0 wei
- Function
- setBorrowPerYearInterestRateSlopeLow(address,uint64)
- Arguments
{ "0": "0xA17581A9E3356d9A858b789D68B4d866e593aE94", "1": "30000000000000000" }- Calldata
- Target
- 0x316f…36e3
- Value
- 0 wei
- Function
- setBorrowPerYearInterestRateSlopeHigh(address,uint64)
- Arguments
{ "0": "0xA17581A9E3356d9A858b789D68B4d866e593aE94", "1": "1000000000000000000" }- Calldata
- Target
- 0x316f…36e3
- Value
- 0 wei
- Function
- setSupplyPerYearInterestRateSlopeLow(address,uint64)
- Arguments
{ "0": "0xA17581A9E3356d9A858b789D68B4d866e593aE94", "1": "23000000000000000" }- Calldata
- Target
- 0x316f…36e3
- Value
- 0 wei
- Function
- setSupplyPerYearInterestRateSlopeHigh(address,uint64)
- Arguments
{ "0": "0xA17581A9E3356d9A858b789D68B4d866e593aE94", "1": "1000000000000000000" }- Calldata
- Target
- 0x1ec6…8779
- Value
- 0 wei
- Function
- deployAndUpgradeTo(address,address)
- Arguments
{ "0": "0x316f9708bB98af7dA9c68C1C3b5e79039cD336E3", "1": "0xA17581A9E3356d9A858b789D68B4d866e593aE94" }- Calldata
05Tally
Summed from votes
06Voters
No votes recorded yet.
07Forum
- [Gauntlet] Ethereum v3 WETH Interest Rate Curve Recommendations (11/29/23) ↗discourse · high confidence
Arguments for
- Lowering the borrow APR curve to 3.20% at the 90% utilization kink will incentivize higher WETH utilization and TVL growth in the Ethereum v3 comet.— Gauntlet
- The recommended changes will shift the protocol toward positive reserve growth at higher utilization levels (above 60%), improving long-term sustainability.— Gauntlet
- WETH suppliers remain incentivized to participate despite lower supply APRs because all COMP rewards are allocated to suppliers.— Gauntlet
Arguments against
None surfaced.
Notable participants
- GauntletProposer of the WETH interest rate curve updates and primary analyst throughout the discussion.
Generated by Kvorum
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