KVORUM
compoundSource: Compound governor bravo · #71

Risk Parameter Updates for DAI, BAT, ZRX, and ETH

executedNov 25, 2021, 01:21 AM UTCby680x683a…6c02

01Summary

AISummary by Kvorumclaude-haiku-4-5

Batch update of collateral factors for four Compound assets (DAI, BAT, ZRX, ETH) to align with the community-chosen Moderate risk level. BAT and ZRX collateral factors are being decreased due to increased volatility and decreased volume, while ETH and DAI collateral factors are being increased. These changes will slightly increase Value at Risk (VaR) but meaningfully increase borrow usage.

Type
parameter change

Key changes

  • Decrease collateral factor for BAT (0xB3319f5D18Bc0D84dD1b4825Dcde5d5f7266d407) to 0.6 (60%)(medium)
  • Decrease collateral factor for ZRX (0x6C8c6b02E7b2BE14d4fA6022Dfd6d75921D90E4E) to 0.6 (60%)(medium)
  • Increase collateral factor for DAI (0x5d3a536E4D6DbD6114cc1Ead35777bAB948E3643) to 0.8 (80%)(medium)
  • Increase collateral factor for ETH (0x4Ddc2D193948926D02f9B1fE9e1daa0718270ED5) to 0.8 (80%)(medium)

Notable concerns

  • BAT and ZRX have increased in volatility and decreased in volume since last parameter changes
  • Parameter updates will slightly increase Value at Risk (VaR) for the protocol
  • Some parameters differ from original risk level consensus check due to changing market conditions
Contracts0x3d9819210a31b4961b30ef54be2aed79b9c9cd3b0xB3319f5D18Bc0D84dD1b4825Dcde5d5f7266d4070x6C8c6b02E7b2BE14d4fA6022Dfd6d75921D90E4E0x5d3a536E4D6DbD6114cc1Ead35777bAB948E36430x4Ddc2D193948926D02f9B1fE9e1daa0718270ED5
Generated by Kvorum
model: claude-haiku-4-5
provider: anthropic
profile: anthropic-fast-v1
prompt: v1.0
generated: 2mo ago
Read the description ↗

02Description

228 words

Risk Parameter Updates for DAI, BAT, ZRX, and ETH

Simple Summary

A proposal to adjust four (4) total parameters across four (4) Compound assets.

Background

This proposal is a batch update of risk parameters to align with the Moderate risk level chosen by the Compound community. These parameter updates are the third of Gauntlet's regular parameter recommendations as part of Dynamic Risk Parameters.

Full proposal and forum discussion

Motivation and Specification

This set of parameter updates seeks to level set assets to a Moderate risk level of the protocol while making risk trade-offs between specific assets. Note that some are different from the original risk level consensus check as market conditions have changed.

In order to react to changing market conditions, our analysis recommends decreasing the collateral factors for BAT and ZRX while increasing collateral factors for ETH and DAI. Both BAT and ZRX have increased in volatility and decreased in volume since our last parameter changes. As shown on our dashboard, these changes will slightly increase VaR, but the corresponding increase in borrow usage is substantial.

Dashboard

Gauntlet has launched the Compound Risk Dashboard. The community should use the Dashboard to better understand the updated parameter suggestions and general market risk in Compound.

As shown below, this set of parameter updates will slightly increase VaR, but meaningfully increase borrow usage.

03Mismatch analysis

AIMismatch analysis by Kvorum

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

04Actions

4 total
#0_setCollateralFactor(address,uint256)chain 0x1
Target
0x3d98…cd3b
Value
0 wei
Function
_setCollateralFactor(address,uint256)
Arguments
{
  "0": "0xB3319f5D18Bc0D84dD1b4825Dcde5d5f7266d407",
  "1": "600000000000000000"
}
Calldata
#1_setCollateralFactor(address,uint256)chain 0x1
Target
0x3d98…cd3b
Value
0 wei
Function
_setCollateralFactor(address,uint256)
Arguments
{
  "0": "0x6C8c6b02E7b2BE14d4fA6022Dfd6d75921D90E4E",
  "1": "600000000000000000"
}
Calldata
#2_setCollateralFactor(address,uint256)chain 0x1
Target
0x3d98…cd3b
Value
0 wei
Function
_setCollateralFactor(address,uint256)
Arguments
{
  "0": "0x5d3a536E4D6DbD6114cc1Ead35777bAB948E3643",
  "1": "800000000000000000"
}
Calldata
#3_setCollateralFactor(address,uint256)chain 0x1
Target
0x3d98…cd3b
Value
0 wei
Function
_setCollateralFactor(address,uint256)
Arguments
{
  "0": "0x4Ddc2D193948926D02f9B1fE9e1daa0718270ED5",
  "1": "800000000000000000"
}
Calldata

05Tally

Summed from votes

Voters15
VP participating1M
Outcome (current)For
Current support100%

06Voters

15 total
Filter:
VoterChoice% of totalRationale
EA0xea6c…3bf7For306K30.41%—5y ago
9A0x9aa8…ccf1For256K25.45%—5y ago
680x683a…6c02For100K9.94%—5y ago
8D0x8d07…a265For77.5K7.71%—5y ago
9B0x9b68…2984For66.1K6.56%—5y ago
F60xf63e…78c8For50.3K5.00%—5y ago
450x458c…730eFor50K4.97%—5y ago
070x0703…961bFor50K4.97%—5y ago
DC0xdc1f…e432For50K4.97%—5y ago
840x84e3…5a95For165.20.02%—5y ago
D20xd2cb…b9a9For99.40.01%—5y ago
660x66cd…65f9For13.40.00%—5y ago
450x4504…3424For0.50.00%—5y ago
880x88b3…1d42Abstain0.30.00%—5y ago
900x90eb…1b47For0.30.00%—5y ago
Showing 15

07Forum

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

Arguments for

  • Parameter updates align with the Moderate risk level consensus and respond to significant changes in market conditions, particularly increased volatility and decreased volume for BAT and ZRX.— pauljlei
  • The changes will meaningfully increase borrow usage and protocol utilization while maintaining safety, with increased collateral factors for major assets (DAI and ETH) offsetting reductions in smaller markets.— pauljlei
  • Liquidation analysis shows that lowering collateral factors for BAT and ZRX will not drive meaningful forced liquidations, with affected accounts having minimal supply or being recursive accounts without liquidation risk.— pauljlei
  • The proposal accounts for the effects of Proposal 49's liquidation incentive reduction, with simulations showing net positive effects for liquid assets and decreased cascading liquidation risk.— pauljlei

Arguments against

  • Reducing collateral factors for BAT and ZRX to 60% goes below the Moderate risk level (65%) consensus and constitutes an overly conservative approach.— miscao
  • The proposal increases collateral factors for two of the largest TVL markets (DAI and ETH) while reducing them in two of the smallest TVL markets (BAT and ZRX), further concentrating the protocol and reducing diversity for end users.— miscao

Unresolved concerns

  • How will users who are unaware of parameter changes through forum discussions be informed, and what UI improvements will be implemented to prevent inadvertent liquidations?— miscao, pauljlei

Notable participants

  • pauljleiProposer who presented the risk parameter update proposal and provided detailed analysis and liquidation data in response to community concerns.
  • miscaoCommunity member who raised substantive concerns about forced liquidations, protocol diversity, and deviation from the Moderate risk level consensus.
Generated by Kvorum
model: claude-haiku-4-5
provider: anthropic
profile: anthropic-fast-v1
prompt: v1.0
generated: 2mo ago
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