Authors

@desnakeee

Summary

This proposal asks DAO permission to lower WBTC & WETH Pools’ IRM parameters and lower minimal & maximal quota rates of all LRTs and Ethena tokens allowed as collateral.

Motivation

For all the referenced numbers please see rates comparison dashboard.

Implied rates for BTC LRTs on Pendle have stabilized at around 7% APR. Similar strategies on other money markets offer even lower rates. However, Gearbox WBTC pool’s IRM reaches those average market borrowing rates at 60-70% utilization, leaving pool underutilized. The aim of lowering IRM rates is to shift utilization corresponding to demanded rates to ~80%. Under nonzero quota rates utilization will realistically stay at 75-85%.

For more than 4 months rates for borrowing against ETH LRTs remained below 15%, averaging around 5% in recent months. Rates for borrowing against USDe/sUSDe & implied rates on Pendle also stay below 15% for more than 3 months. In contrast, the maxRate in Gearbox gauges is set at 30% for all LRTs and 50% for USDe/sUSDe. This disparity makes it more efficient to vote for increasing rates than to vote against them, causing rates to deviate upwards from market average and complicating the gauge voting process.

Technical specification

Trade WBTC v3 pool

New IRM parameters

Parameter	Proposed value
r0	0
r1	1
r2	1.5
r3	60
U1	70
U2	90
isBorrowingMoreU2Forbidden	true

Deploy new IRM and set it to be used by Trade WBTC V3 Pool on Mainnet.

Utilization, %	Base borrow rate (current IRM)	Base borrow rate (proposed IRM)
70	2.50	1.25
80	4.06	2.19
90	5.63	3.13

Quota rate bounds

Token	minRate, %	maxRate, %
LBTC	0.05	15

Trade WETH v3 pool

New IRM parameters

Parameter	Proposed value
r0	0
r1	1
r2	1.5
r3	60
U1	70
U2	90
isBorrowingMoreU2Forbidden	true

Deploy new IRM and set it to be used by Trade WETH V3 Pool on Mainnet.

Utilization, %	Base borrow rate (current IRM)	Base borrow rate (proposed IRM)
70	2.50	1.25
80	4.06	2.19
90	5.63	3.13

Quota rate bounds

Token	minRate, %	maxRate, %
pzETH	0.05	10
Re7LRT	0.05	10
amphrETH	0.05	10
steakLRT	0.05	10
rstETH	0.05	10
weETH	0.05	10
ezETH	0.05	10
rsETH	0.05	10
pufETH	0.05	10
rswETH	0.05	10

Trade USDC v3 pool

Quota rate bounds

Token	minRate, %	maxRate, %
USDe	0.05	25
sUSDe	0.05	25

Universal USDT v3 pool

Quota rate bounds

Token	minRate, %	maxRate, %
USDe	0.05	25
sUSDe	0.05	25

DAI v3 pool

Quota rate bounds

Token	minRate, %	maxRate, %
USDe	0.05	25
sUSDe	0.05	25

GHO v3 pool

Quota rate bounds

Token	minRate, %	maxRate, %
USDe	0.05	25
sUSDe	0.05	25

crvUSD v3 pool

Quota rate bounds

Token	minRate, %	maxRate, %
USDe	0.05	25
sUSDe	0.05	25

Transactions details

Txs log can be found here. Md5 checksum is 8361871feaeedfb53376439840e01860