[Gauntlet] - Arbitrum USDC - Risk, Incentive, and Interest Rate Curve Recommendations
01Summary
Gauntlet proposes parameter updates for the Arbitrum USDC comet including increased supply caps for WETH and WBTC, higher collateral and liquidation factors, adjusted interest rate curves for borrowing and supply rates, and significantly increased daily COMP borrow distribution from 8 to 50 to incentivize growth at higher utilization.
- Type
- parameter change
Key changes
- WETH Supply Cap increased from 10,000 to 40,000(high)
- WETH Liquidation Factor increased from 85% to 90%(high)
- WETH Collateral Factor increased from 78% to 83%(high)
- WBTC Supply Cap increased from 1,200 to 2,000(high)
- Annual Borrow Interest Rate Base decreased from 0.015 to 0.0136(medium)
- Annual Borrow Interest Rate Slope Low decreased from 0.0833 to 0.0626(medium)
- Annual Supply Interest Rate Slope Low decreased from 0.075 to 0.062(medium)
- Annual Supply Interest Rate Slope High increased from 3.6 to 3.94(medium)
Generated by Kvorum
02Description
[Gauntlet] - Arbitrum USDC - Risk, Incentive, and Interest Rate Curve Recommendations
Simple Summary
Gauntlet recommends the following parameter updates for the Arbitrum USDC comet:
Risk Recommendations
| Parameter | Current Value | Recommended Value |
|---|---|---|
| WETH Supply Cap | 10,000 | 40,000 |
| WETH Liquidation Factor | 85% | 90% |
| WETH Collateral Factor | 78% | 83% |
| WBTC Supply Cap | 1,200 | 2,000 |
Interest Rate Curve Recommendations
| Parameter | Current Value | Recommended Value |
|---|---|---|
| Annual Borrow Interest Rate Base | .015 | 0.0136 |
| Annual Borrow Interest Rate Slope Low | .0833 | 0.0626 |
| Borrow Kink | 0.9 | 0.9 |
| Annual Borrow Interest Rate Slope High | 4.3 | 4.3 |
| Annual Supply Interest Rate Base | 0 | 0 |
| Annual Supply Interest Rate Slope Low | .075 | 0.062 |
| Supply Kink | 0.9 | 0.9 |
| Annual Supply Interest Rate Slope High | 3.6 | 3.94 |
COMP Distribution Recommendations
| Parameter | Current Value | Recommended Value |
|---|---|---|
| Daily COMP Supply | 17 | 17 |
| Daily COMP Borrow | 8 | 50 |
Motivation
Gauntlet recommends updating the risk, incentive, and interest rate curve parameters in the Arbitrum USDC comet to further incentivize growth at higher utilization. Full proposal and forum discussion
Specification
The proposal updates the parameters by using the respective methods on 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
The proposal contains a single top-level action: a cross-chain createRetryableTicket call typical of Compound's Arbitrum governance bridge pattern, which forwards a batch of Configurator function calls to L2. Decoding the embedded payload reveals function selectors for updateAssetSupplyCap (called twice, consistent with WETH and WBTC supply cap changes), updateAssetBorrowCollateralFactor and updateAssetLiquidateCollateralFactor (consistent with WETH collateral/liquidation factor changes), setBaseTrackingBorrowSpeed (consistent with the COMP borrow speed change from 8 to 50), and interest-rate setters for borrow base, borrow slope-low, supply slope-low, and supply slope-high — matching exactly the rows in the description's tables that show a change. Notably, no setters are present for parameters the description says are unchanged (borrow/supply kink, supply rate base, borrow rate slope high, daily COMP supply), which is the expected and correct behavior rather than an omission. The final deployAndUpgradeTo call is standard boilerplate for applying a new Configurator via the proxy pattern and does not need separate description mention. I could not fully decode the exact numeric values packed in the nested calldata to verify precise magnitudes (e.g., exact 64-bit rate encodings), so confidence is medium rather than high, but the set and ordering of function calls align closely with the proposal's described changes with no evidence of extra, missing, or misdirected actions is found within what could be interpreted from the payload structure.
Generated by Kvorum
04Actions
- Target
- 0x4dbd…ab3f
- Value
- 6496075500000000 wei
- Function
- createRetryableTicket(address,uint256,uint256,address,address,uint256,uint256,bytes)
- Arguments
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}- Calldata
05Tally
Summed from votes
06Voters
No votes recorded yet.
07Forum
- [Gauntlet] Arbitrum USDC - Risk, Incentive, and Interest Rate Curve Recommendations (7/12/2024) ↗discourse · high confidence
Arguments for
- Gauntlet's recommended parameter updates will maintain momentum from recent USDC supply growth and attract additional borrowing by lowering borrow APR from 9% to 7% at the kink while increasing COMP borrow incentives.— Gauntlet
- Increasing WETH and WBTC supply caps is justified because utilization is below 50% and Arbitrum DEX liquidity can support the higher caps.— Gauntlet
- Lowering the implied reserve factor alongside the interest rate curve update makes borrowing and lending rates more appealing to users.— Gauntlet
- Increasing COMP borrow distribution APR from 0.82% to 5.15% by raising daily emissions will meaningfully incentivize borrowing activity.— Gauntlet
Arguments against
None surfaced.
Notable participants
- GauntletRisk analysis provider proposing parameter updates for Arbitrum USDC Comet based on supply growth and market conditions.
Generated by Kvorum
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