KVORUM
compoundSource: Compound governor oz · #573

WETH & wstETH Comets Interest Rate Curve Recommendations on Mainnet

canceledApr 25, 2026, 11:44 AM UTCby890x89f2…e8db

01Summary

AISummary by Kvorumclaude-haiku-4-5

Gauntlet recommends lowering WETH and wstETH borrow interest rate curves on Ethereum to mitigate risks from recent market volatility. Target rates are 2.00% at kink and 5.00% at max utilization, achieved by adjusting slope parameters while maintaining 90% kink utilization and current base rates.

Type
parameter change

Key changes

  • Lower WETH Comet kink rate from current level to 2.00%(high)
  • Lower WETH Comet max rate from current level to 5.00%(high)
  • Lower wstETH Comet kink rate from current level to 2.00%(high)
  • Lower wstETH Comet max rate from current level to 5.00%(high)
  • Flatten slope below kink and compress slope above kink across both markets(high)
  • Maintain borrow kink at 90% utilization across all markets(medium)
  • Maintain base rate at current values(medium)

Notable concerns

  • Recent Kelp exploit has created heightened volatility in ETH markets
  • LST/LRT-based looping strategies face high negative carry
  • Proposal designed to prevent liquidations and allow gradual unwinding of leverage positions during volatile conditions
Contracts0xA17581A9E3356d9A858b789D68B4d866e593aE940x3D0bb1ccaB520A66e607822fC55BC921738fAFE3
Generated by Kvorum
model: claude-haiku-4-5
provider: anthropic
profile: anthropic-fast-v1
prompt: v1.0
generated: 2mo ago
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02Description

252 words

WETH & wstETH Comets Interest Rate Curve Recommendations on Mainnet

Simple Summary

Given heightened market activity and elevated volatility across ETH markets, Gauntlet recommends the following Interest Rate (IR) Curve updates across WETH comets on Ethereum. These changes are designed to keep borrow costs low and avoid liquidations during the volatile period.

Motivation

The recent Kelp exploit has led to heightened volatility and shifting dynamics across ETH-correlated assets. In this environment, LST/LRT-based looping strategies are facing a significantly high negative carry.

The recommendations below flatten the slope below kink and compress the slope above kink, resulting in lower kink and max borrow rates across all WETH markets. The intent is to:

  • Keep Compound’s WETH borrow rates not too high so that unwinding can happen gradually in a volatile environment.
  • Decrease existing borrow positions gradually without pushing rates to a level that would unwind a high amount of the existing ETH-leverage positions.

We will continue to monitor utilization and reserve growth and will adjust as conditions evolve.

Specification

Target APRs at kink and at 100% utilization across the comets:

CometKink RateMax Rate
Ethereum wstETH2.00%5.00%
Ethereum WETH2.00%5.00%

Borrow kink is held at 90% across all markets. The base rate is held constant at current values. Slope Low and Slope High are updated to achieve the target kink and max rates above.

Forum Post

03Mismatch analysis

AIMismatch analysis by Kvorum

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

04Actions

7 total
#0setBorrowPerYearInterestRateSlopeLow(address,uint64)chain 0x1
Target
0x316f…36e3
Value
0 wei
Function
setBorrowPerYearInterestRateSlopeLow(address,uint64)
Arguments
{
  "newSlope": "352331022",
  "cometProxy": "0xA17581A9E3356d9A858b789D68B4d866e593aE94"
}
Calldata
#1setBorrowPerYearInterestRateSlopeHigh(address,uint64)chain 0x1
Target
0x316f…36e3
Value
0 wei
Function
setBorrowPerYearInterestRateSlopeHigh(address,uint64)
Arguments
{
  "newSlope": "9512937595",
  "cometProxy": "0xA17581A9E3356d9A858b789D68B4d866e593aE94"
}
Calldata
#2setBorrowPerYearInterestRateSlopeLow(address,uint64)chain 0x1
Target
0x316f…36e3
Value
0 wei
Function
setBorrowPerYearInterestRateSlopeLow(address,uint64)
Arguments
{
  "newSlope": "352331022",
  "cometProxy": "0x3D0bb1ccaB520A66e607822fC55BC921738fAFE3"
}
Calldata
#3setBorrowPerYearInterestRateSlopeHigh(address,uint64)chain 0x1
Target
0x316f…36e3
Value
0 wei
Function
setBorrowPerYearInterestRateSlopeHigh(address,uint64)
Arguments
{
  "newSlope": "9512937595",
  "cometProxy": "0x3D0bb1ccaB520A66e607822fC55BC921738fAFE3"
}
Calldata
#4setBorrowKink(address,uint64)chain 0x1
Target
0x316f…36e3
Value
0 wei
Function
setBorrowKink(address,uint64)
Arguments
{
  "cometProxy": "0x3D0bb1ccaB520A66e607822fC55BC921738fAFE3",
  "newBorrowKink": "900000000000000000"
}
Calldata
#5deployAndUpgradeTo(address,address)chain 0x1
Target
0x1ec6…8779
Value
0 wei
Function
deployAndUpgradeTo(address,address)
Arguments
{
  "cometProxy": "0xA17581A9E3356d9A858b789D68B4d866e593aE94",
  "configuratorProxy": "0x316f9708bB98af7dA9c68C1C3b5e79039cD336E3"
}
Calldata
#6deployAndUpgradeTo(address,address)chain 0x1
Target
0x1ec6…8779
Value
0 wei
Function
deployAndUpgradeTo(address,address)
Arguments
{
  "cometProxy": "0x3D0bb1ccaB520A66e607822fC55BC921738fAFE3",
  "configuratorProxy": "0x316f9708bB98af7dA9c68C1C3b5e79039cD336E3"
}
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 · mixedthread · mixed

Arguments for

  • Lowering WETH borrow rates prevents forced liquidations and allows borrowers to unwind ETH-leverage positions gradually during volatile market conditions.— Gauntlet
  • Reducing rates across all WETH markets keeps Compound's borrowing costs competitive and prevents a sudden spike that could trigger mass unwinding.— Gauntlet

Arguments against

None surfaced.

Unresolved concerns

  • Why not apply the same 3% max rate uniformly across all vaults rather than having higher rates (5%) on Ethereum WETH and wstETH?— ico
  • How long will it take for the recommended interest rate changes to become effective after governance approval?— ico
  • Can the vote timing be accelerated to reduce the period borrowers face the current ~9.5% rate without ability to withdraw collateral and repay debt?— ico
  • Will L2 interest rate curve updates be implemented promptly when collateral withdrawals are re-enabled in a few days to prevent bank runs or rate spikes?— ynot

Notable participants

  • GauntletProposer and risk advisor providing the interest rate curve recommendations and rationale based on market volatility analysis.
  • icoCommunity member raising questions about rate consistency across vaults, implementation timeline, and vote timing.
  • ynotCommunity member flagging urgency of L2 governance votes to coincide with planned collateral withdrawal re-enablement.
Generated by Kvorum
model: claude-haiku-4-5
provider: anthropic
profile: anthropic-fast-v1
prompt: v1.0
generated: 2mo ago
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