KVORUM
compoundSource: Compound governor bravo · #351

[Gauntlet] Risk Parameter Recommendations for LINK and UNI (Oct 2024)

executedOct 26, 2024, 07:18 AM UTCby4D0x4d80…ef4b

01Summary

AISummary by Kvorumclaude-haiku-4-5

Gauntlet proposes to reduce risk exposure for LINK and UNI tokens across Ethereum Comet markets by decreasing supply caps, collateral factors, and liquidation factors, while increasing liquidation penalties for LINK. These are tail-risk mitigation measures for volatile assets.

Type
parameter change

Key changes

  • USDC Ethereum Comet: LINK Supply Cap decreased from 4,000,000 to 1,000,000(high)
  • USDT Ethereum Comet: LINK Supply Cap decreased from 2,000,000 to 500,000(high)
  • USDT Ethereum Comet: UNI Supply Cap decreased from 3,000,000 to 1,300,000(high)
  • USDC Ethereum Comet: LINK Collateral Factor decreased from 79% to 73%(high)
  • USDC Ethereum Comet: LINK Liquidation Factor decreased from 85% to 79%(high)
  • USDC Ethereum Comet: LINK Liquidation Penalty increased from 7% to 17%(high)
  • USDT Ethereum Comet: LINK Collateral Factor decreased from 79% to 73%(high)
  • USDT Ethereum Comet: LINK Liquidation Factor decreased from 85% to 79%(high)

Notable concerns

  • This is part 1 of a two-part proposal; part 2 will incorporate additional recommendations for USDT Comets on Ethereum
  • Liquidation penalties for LINK are significantly increased, which may affect existing positions
Contracts0xc3d688B66703497DAA19211EEdff47f25384cdc30x316f9708bb98af7da9c68c1c3b5e79039cd336e30x1ec63b5883c3481134fd50d5daebc83ecd2e8779
Generated by Kvorum
model: claude-haiku-4-5
provider: anthropic
profile: anthropic-fast-v1
prompt: v1.0
generated: 2mo ago
Read the description ↗

02Description

273 words

[Gauntlet] Risk Parameter Recommendations for LINK and UNI (Oct 2024)

Summary

Gauntlet recommends the following risk recommendations to the protocol:

  • Decrease USDC Ethereum Comet’s LINK Supply Cap from 4,000,000 to 1,000,000
  • Decrease USDT Ethereum Comet’s LINK Supply Cap from 2,000,000 to 500,000
  • Decrease USDT Ethereum Comet’s UNI Supply Cap from 3,000,000 to 1,300,000
  • Decrease USDC Ethereum Comet’s LINK Liquidation Factor from 85% to 79%
  • Decrease USDC Ethereum Comet’s LINK Collateral Factor from 79% to 73%
  • Increase USDC Ethereum Comet’s LINK Liquidation Penalty from 7% to 17%
  • Decrease USDT Ethereum Comet’s LINK Liquidation Factor from 85% to 79%
  • Decrease USDT Ethereum Comet’s LINK Collateral Factor from 79% to 73%
  • Increase USDT Ethereum Comet’s LINK Liquidation Penalty from 7% to 17%
  • Decrease USDC Ethereum Comet’s UNI Liquidation Factor from 79% to 74%
  • Decrease USDC Ethereum Comet’s UNI Collateral Factor from 73% to 68%
  • Decrease USDT Ethereum Comet’s UNI Liquidation Factor from 81% to 74%
  • Decrease USDT Ethereum Comet’s UNI Collateral Factor from 75% to 68%
  • Increase USDT Ethereum Comet’s UNI LP from 15% to 17%

Motivation

This recommendation aims to review and adjust risk parameters for tail-risk assets across Comets. This part 1 of the proposal, part 2 will incorporate recommendations for USDT Comets on Ethereum.

Full proposal and forum discussions can be found here

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

7 total
#0updateAssetBorrowCollateralFactor(address,address,uint64)chain 0x1
Target
0x316f…36e3
Value
0 wei
Function
updateAssetBorrowCollateralFactor(address,address,uint64)
Arguments
{
  "0": "0xc3d688B66703497DAA19211EEdff47f25384cdc3",
  "1": "0x514910771AF9Ca656af840dff83E8264EcF986CA",
  "2": "730000000000000000"
}
Calldata
#1updateAssetLiquidateCollateralFactor(address,address,uint64)chain 0x1
Target
0x316f…36e3
Value
0 wei
Function
updateAssetLiquidateCollateralFactor(address,address,uint64)
Arguments
{
  "0": "0xc3d688B66703497DAA19211EEdff47f25384cdc3",
  "1": "0x514910771AF9Ca656af840dff83E8264EcF986CA",
  "2": "790000000000000000"
}
Calldata
#2updateAssetLiquidationFactor(address,address,uint64)chain 0x1
Target
0x316f…36e3
Value
0 wei
Function
updateAssetLiquidationFactor(address,address,uint64)
Arguments
{
  "0": "0xc3d688B66703497DAA19211EEdff47f25384cdc3",
  "1": "0x514910771AF9Ca656af840dff83E8264EcF986CA",
  "2": "830000000000000000"
}
Calldata
#3updateAssetSupplyCap(address,address,uint128)chain 0x1
Target
0x316f…36e3
Value
0 wei
Function
updateAssetSupplyCap(address,address,uint128)
Arguments
{
  "0": "0xc3d688B66703497DAA19211EEdff47f25384cdc3",
  "1": "0x514910771AF9Ca656af840dff83E8264EcF986CA",
  "2": "1000000000000000000000000"
}
Calldata
#4updateAssetBorrowCollateralFactor(address,address,uint64)chain 0x1
Target
0x316f…36e3
Value
0 wei
Function
updateAssetBorrowCollateralFactor(address,address,uint64)
Arguments
{
  "0": "0xc3d688B66703497DAA19211EEdff47f25384cdc3",
  "1": "0x1f9840a85d5aF5bf1D1762F925BDADdC4201F984",
  "2": "680000000000000000"
}
Calldata
#5updateAssetLiquidateCollateralFactor(address,address,uint64)chain 0x1
Target
0x316f…36e3
Value
0 wei
Function
updateAssetLiquidateCollateralFactor(address,address,uint64)
Arguments
{
  "0": "0xc3d688B66703497DAA19211EEdff47f25384cdc3",
  "1": "0x1f9840a85d5aF5bf1D1762F925BDADdC4201F984",
  "2": "740000000000000000"
}
Calldata
#6deployAndUpgradeTo(address,address)chain 0x1
Target
0x1ec6…8779
Value
0 wei
Function
deployAndUpgradeTo(address,address)
Arguments
{
  "0": "0x316f9708bB98af7dA9c68C1C3b5e79039cD336E3",
  "1": "0xc3d688B66703497DAA19211EEdff47f25384cdc3"
}
Calldata

05Tally

Summed from votes

Voters0
VP participating0
Outcome (current)—
Current support—

06Voters

0 total

No votes recorded yet.

07Forum

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

Arguments for

  • Supply cap reductions align with consistently low utilization rates that have been sustained over time, making current caps inefficiently high.— Gauntlet
  • Collateral and liquidation factor adjustments improve risk management by reducing exposure to volatile assets (LINK at 66% annualized volatility, UNI at 86%) without immediately liquidating existing positions.— Gauntlet
  • Increased liquidation penalties (LINK from 7% to 17%) better compensate the protocol for liquidation costs given the assets' documented slippage and liquidity constraints.— Gauntlet
  • Risk parameter reductions are conservative and data-driven, backed by detailed analysis of DEX liquidity, volatility metrics, and current user positions.— Gauntlet

Arguments against

None surfaced.

Unresolved concerns

  • Whether the supply cap reductions may negatively impact users who want to supply LINK and UNI as collateral, potentially limiting protocol adoption of these assets.— Gauntlet
  • Whether the 75% increase in liquidation penalty (from 7% to 17% on LINK) may be perceived as excessive and could deter borrowing against these collaterals.— Gauntlet
  • Whether monitoring and adjustment cadence are sufficient to catch rapid changes in utilization or market conditions that might warrant parameter reversals.— Gauntlet

Notable participants

  • GauntletRisk assessment firm proposing parametric recommendations backed by quantitative analysis of utilization, liquidity, volatility, and user positions.
Generated by Kvorum
model: claude-haiku-4-5
provider: anthropic
profile: anthropic-fast-v1
prompt: v1.0
generated: 2mo ago
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