Compound

[Gauntlet] 2023-12-24: Ethereum v3 USDC, Polygon v3 USDC.e - Interest Rate Curve Recommendations Simple Summary A proposal from Gauntlet to adjust five Interest Rate (IR) Curve parameters in the Ethereum v3 USDC comet and four IR Curve parameters in the Polygon v3 USDC.e comet.

Gauntlet recommends the following IR Curve updates in the Ethereum v3 USDC comet:

• Raise Annual Borrow Interest Rate Base from 0.01 to 0.015
• Raise Annual Borrow Interest Rate Slope Low from 0.0333 to 0.0484
• Raise Annual Borrow Interest Rate Slope High from 1.5 to 3.9
• Raise Annual Supply Interest Rate Slope Low from 0.034 to 0.048
• Raise Annual Supply Interest Rate Slope High from 1.5 to 3.4

Gauntlet recommends the following IR Curve updates in the Polygon v3 USDC.e comet:

• Raise Annual Borrow Interest Rate Slope Low from 0.04 to 0.053
• Raise Annual Borrow Interest Rate Slope High from 0.7 to 1.8
• Raise Annual Supply Interest Rate Slope Low from 0.04 to 0.048
• Raise Annual Supply Interest Rate Slope High from 0.65 to 1.6

For more details, see the full forum post here.

Motivation

Gauntlet recommends adjusting the Ethereum v3 USDC and Polygon v3 USDC.e Interest Rate Curves to ensure that Borrow APR at the kink in all USDC comets is 6% and max Borrow APR in all USDC comets is > 30%.

Full proposal and forum discussion

Specification

The proposal updates the IR curve parameters by using the respective methods in the Configurator.

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