KVORUM
compoundSource: Compound governor bravo · #328

[Gauntlet] - WBTC Risk Recommendations - part 2 (2024-09-10)

executedSep 15, 2024, 01:51 PM UTCby7B0x7b3c…cc33

01Summary

AISummary by Kvorumclaude-haiku-4-5

Gauntlet proposes risk parameter adjustments for WBTC across Compound's mainnet and layer 2 networks in response to custody concerns. Changes include: increasing liquidation penalty from 5% to 10% on Mainnet and all L2s, and decreasing supply caps across multiple Arbitrum and Polygon deployments.

Type
parameter change

Key changes

  • Increase WBTC liquidation penalty from 5% to 10% on WETH Mainnet(high)
  • Increase WBTC liquidation penalty from 5% to 10% across all L2 Comets(high)
  • Decrease WBTC supply cap from 750 to 400 on USDC.e Polygon(medium)
  • Decrease WBTC supply cap from 1200 to 1000 on WETH Arbitrum(medium)
  • Decrease WBTC supply cap from 2000 to 1000 on USDC Arbitrum(high)
  • Decrease WBTC supply cap from 1200 to 1000 on USDT Arbitrum(medium)
  • Decrease WBTC supply cap from 300 to 200 on USDC.e Arbitrum(medium)

Notable concerns

  • Changes motivated by ongoing speculation surrounding BitGo and BiTGlobal joint venture WBTC custody concerns
  • Multiple supply cap reductions across L2s could impact liquidity for WBTC borrowers and suppliers
  • Liquidation penalty increase from 5% to 10% represents a 2x increase in liquidation costs
Contracts0x316f9708bb98af7da9c68c1c3b5e79039cd336e30x1ec63b5883c3481134fd50d5daebc83ecd2e87790xfe5e5d361b2ad62c541bab87c45a0b9b018389a20x25ace71c97b33cc4729cf772ae268934f7ab5fa10x4dbd4fc535ac27206064b68ffcf827b0a60bab3f
Generated by Kvorum
model: claude-haiku-4-5
provider: anthropic
profile: anthropic-fast-v1
prompt: v1.0
generated: 2mo ago
Read the description ↗

02Description

205 words

[Gauntlet] - WBTC Risk Recommendations - part 2 (2024-09-10)

Summary

Gauntlet has made the following risk recommendations:

  • Increase Liquidation Penalty for WBTC from 5% to 10% on WETH Mainnet
  • Increase Liquidation Penalty for WBTC from 5% to 10% across all L2 Comets
  • Decrease Supply Cap from 750 to 400 to 750 for WBTC on USDC.e Polygon.
  • Decrease Supply Cap from 1200 to 1,000 for WBTC on WETH Arbitrum.
  • Decrease Supply Cap from 2000 to 1,000 for WBTC on USDC Arbitrum.
  • Decrease Supply Cap from 1200 to 1,000 for WBTC on USDT Arbitrum.
  • Decrease Supply Cap from 300 to 200 for WBTC on USDC.e Arbitrum.

Motivation

Gauntlet recommends specific adjustments to the liquidation penalty, supply and borrow caps for WBTC on various Comets given the ongoing speculation across BitGo's and BiTGlobal's joint venture surrounding WBTC custody. The recommendations aim to enhance risk management across WBTC collateral.

Full proposal and forum discussions can be found here: WBTC Risk Recommendations

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

AIMismatch analysis by Kvorum

A calldata-vs-description analysis is not generated yet. Review the decoded actions →

04Actions

5 total
#0updateAssetLiquidationFactor(address,address,uint64)chain 0x1
Target
0x316f…36e3
Value
0 wei
Function
updateAssetLiquidationFactor(address,address,uint64)
Arguments
{
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  "1": "0x2260FAC5E5542a773Aa44fBCfeDf7C193bc2C599",
  "2": "900000000000000000"
}
Calldata
#1deployAndUpgradeTo(address,address)chain 0x1
Target
0x1ec6…8779
Value
0 wei
Function
deployAndUpgradeTo(address,address)
Arguments
{
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  "1": "0xA17581A9E3356d9A858b789D68B4d866e593aE94"
}
Calldata
#2sendMessageToChild(address,bytes)chain 0x1
Target
0xfe5e…89a2
Value
0 wei
Function
sendMessageToChild(address,bytes)
Arguments
{
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Calldata
#3sendMessage(address,bytes,uint32)chain 0x1
Target
0x25ac…5fa1
Value
0 wei
Function
sendMessage(address,bytes,uint32)
Arguments
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  "2": "2500000"
}
Calldata
#4createRetryableTicket(address,uint256,uint256,address,address,uint256,uint256,bytes)chain 0x1
Target
0x4dbd…ab3f
Value
7331731500000000 wei
Function
createRetryableTicket(address,uint256,uint256,address,address,uint256,uint256,bytes)
Arguments
{
  "0": "0x42480C37B249e33aABaf4c22B20235656bd38068",
  "1": "0",
  "2": "5080010000000000",
  "3": "0x3fB4d38ea7EC20D91917c09591490Eeda38Cf88A",
  "4": "0x3fB4d38ea7EC20D91917c09591490Eeda38Cf88A",
  "5": "4503443",
  "6": "500000000",
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}
Calldata

05Tally

Summed from votes

Voters28
VP participating741.8K
Outcome (current)For
Current support100%

06Voters

28 total

No votes recorded yet.

07Forum

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

Arguments for

  • Increased liquidation penalties to 10% would enhance liquidator incentives and provide a larger insolvency buffer to better protect the protocol if WBTC deteriorates following the custodianship transfer.— Gauntlet
  • Lowering underutilized WBTC supply caps maintains a 25%+ buffer for each market while reducing exposure without curtailing protocol growth.— Gauntlet
  • Risk-off parameters are warranted given heightened concerns around WBTC's custodial setup following BitGo's announcement of changes to BiT Global involvement.— Gauntlet

Arguments against

None surfaced.

Unresolved concerns

  • Questions pertaining to WBTC custodial auditing, transparency, and the broader role of BiT Global within the joint venture with BitGo remain unclear.— Gauntlet
  • Reliability of WBTC audits remains uncertain despite on-chain proof of reserve being available.— Gauntlet

Notable participants

  • GauntletProposer; risk management firm providing analysis and parameter recommendations for WBTC markets.
Generated by Kvorum
model: claude-haiku-4-5
provider: anthropic
profile: anthropic-fast-v1
prompt: v1.0
generated: 2mo ago
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