[Gauntlet] - cbBTC Risk Recommendations for Mainnet WETH/USDT/USDC and Base USDC/WETH Comets
If the community wishes to add the assets cbBTC to following Comets, Gauntlet recommends the following risk parameters:
Ethereum
USDC Comet on Ethereum
| Collateral | Supply Cap | Collateral Factor | Liquidation Factor | Liquidation Penalty |
|---|---|---|---|---|
| cbBTC | 93 | 80% | 85% | 5% |
USDT Comet on Ethereum
| Collateral | Supply Cap | Collateral Factor | Liquidation Factor | Liquidation Penalty |
|---|---|---|---|---|
| cbBTC | 93 | 80% | 85% | 5% |
WETH Comet on Ethereum
| Collateral | Supply Cap | Collateral Factor | Liquidation Factor | Liquidation Penalty |
|---|---|---|---|---|
| cbBTC | 93 | 80% | 85% | 5% |
Base
USDC Comet on Base
| Collateral | Supply Cap | Collateral Factor | Liquidation Factor | Liquidation Penalty |
|---|---|---|---|---|
| cbBTC | 45 | 80% | 85% | 5% |
WETH Comet on Base
| Collateral | Supply Cap | Collateral Factor | Liquidation Factor | Liquidation Penalty |
|---|---|---|---|---|
| cbBTC | 45 | 80% | 85% | 5% |
Analysis
Given the anticipation of cbBTC’s launch, Gauntlet would like to provide risk recommendations if the community wishes to onboard the asset. Although there are no prevailing market data pertaining to cbBTC, given it’s mirroring nature to WBTC, Gauntlet can recommend parameters based on WBTC’s precedence.
Supply Caps
Gauntlet proposes a $5M cap across Mainnet instances, targeting an initial TVL equilibrium of $50M. Setting caps at 10% of the projected TVL strategically positions Compound to maximize potential upside while managing risks effectively. Historical data from Coinbase assets show substantial liquidity for cbETH on Mainnet, suggesting potential robust support for cbBTC as well. Gauntlet will continue to closely monitor the market dynamics and adjust the supply caps as necessary to align with evolving conditions.
For Base instance we recommend setting the supply cap at $2.5M, half of the value set for Mainnet
Liquidation Factor, Collateral Factor and Liquidation Penalty
Due to the similarity in the nature of assets, we recommend aligning cbBTC’s CF, LF and LP to that of WBTC on that Comet. For Base, although there is no precedence, we recommend setting the same LF, CF and LP as those set in the Mainnet Comets. We therefore recommend a CF of 80%, LF of 85% and an LP of 5%.
Next Steps
- Welcome community feedback