Add market USDT on Polygon

[bryancolligan]

Summary

Compound Growth program proposes launching USDT market on Polygon network.

Motivation

USDT on Polygon has a total supply of $841 Million [Source]. The Growth program is already pushing USDT Markets on ETH mainnet, Arbitrum and Optimism. Compound USDT market on Polygon opens up a huge market for Polygon ecosystem users to earn on their USDT holdings. This also helps the Compound protocol to attract more TVL and in turn generate more revenue.

Point of Contact: @bryancolligan @sharp

Proposed Collateral

We propose adding the following asset as collaterals for the market

• Matic (MATIC)
• Stader Matic (MATICx)
• Wrapped Bitcoin (WBTC)
• Staked Matic (stMATIC)
• Wrapped Ether (WETH)

We invite the community to suggest and give inputs for any other collateral assets.

Relevant Documents and Links

Website: https://tether.to/

Twitter: https://twitter.com/Tether_to/

CoinMarketCap: Tether USDt price today, USDT to USD live price, marketcap and chart | CoinMarketCap

CoinGecko: Tether Price: USDT Live Price Chart, Market Cap & News Today | CoinGecko

PolygonScan: $1.00 | (PoS) Tether USD (USDT) Token Tracker | PolygonScan

Next Steps

USDT is the top token with the highest number of holders in the OP market. Standing at around 3.5M Users, it is way higher than the existing USDC.e token with 2M Users on the Polygon Network. Adding the market to Compound will provide an additional opportunity for the growth of the protocol.

We invite the community to consider this application for listing the USDT market and welcome suggestions in this direction.

Additionally, we look forward to the community to suggest

Collateral Factor

Reserve Factor

Borrowing Limit

[Piji]

I would love to see a USDT market on Polygon.

[Gauntlet]

[Gauntlet] Polygon v3 USDT Comet Initial Asset Listing Recommendations

Simple Summary

Gauntlet is excited for the community to add a USDT Comet to Polygon. We recommend the following initial parameter recommendations for the Polygon v3 USDT comet.

Risk Parameters

Asset	Collateral Factor	Liquidation Factor	Liquidation Penalty	Supply Cap
Matic	65%	80%	15%	5M ($3.5M)
MATICx	60%	70%	20%	2.6M ($2M)
WBTC	75%	85%	10%	90 ($5.6M)
stMATIC	60%	70%	20%	1.5M ($1.1M)
WETH	80%	85%	5%	2,000 ($6.1M)

Storefront Price Factor: 60%

Gauntlet recommends keeping the Store Front Price Factor at the same value as the Polygon v3 USDC.e Comet.

Target Reserves: 20,000,000

After Gauntlet’s forum post analyzing Target Reserves, Gauntlet recommends increasing the Target Reserves for this market based on historical reserve growth and our recent recommendation to increase Ethereum USDC Comet’s Target Reserves.

IR Curve Parameters

Gauntlet recommends the following IR parameters for USDT Comets:

IR Parameter	Value
borrow per year interest rate base	0.015
borrow per year interest rate slope low	0.0833
borrow kink	0.9
borrow per year interest rate slope high	4.3
supply per year interest rate base	0
supply per year interest rate slope low	0.075
supply kink	0.9
supply per year interest rate slope high	3.6

The chart above demonstrates that the generation of Comet USDT reserves will be positive when utilization exceeds 73%.

Incentive Parameters

Our COMP rewards recommendations are designed to offer appealing distribution APRs when the comets are first launched and when supply caps are highly utilized.

Gauntlet is recommending higher supply rewards to incentivize a more significant inflow of supply tokens into the protocol. This is important in the early stages of protocol growth since USDT supply are required before borrowers can join. Daily COMP rewards are subject to change as TVL rises and the markets evolve.

USDT Comet Incentives

Daily COMP Supply Rewards	Daily COMP Borrow Rewards
8	4

Assuming full usage of supply caps and current liquidation factors, the total borrowing power would be $14.91M.

Here’s a breakdown based on our assumptions:

• Borrow Usage (80%): This leads to a borrowing volume of $11.9M.
• Utilization (90%): Corresponding to a supply volume of $13.25M.

With the above utilization and the present Interest Rate curve:

• Supply APR: 6.75%
• Borrow APR: 9.00%

Given the current COMP price of $89:

• Supply Distribution APR: 1.23%
• Borrow Distribution APR: .69%

This results in the following Net APRs:

• Net Supply APR: 7.98%
• Net Borrow APR: 8.31%

The chart above illustrates the Distribution Annual Percentage Rates (APRs) across various supply levels, assuming a 90% utilization rate. It’s noteworthy that APRs exceeding 2% will persist until the market’s supply reaches $9M. These incentive distributions are strategically designed to accelerate the USDT Comet. The current projected net APRs are within reasonable ranges.

Next Steps

We welcome community feedback.

[Piji]

Looking forward to having USDT on Polygon!

[pashabergman]

Hi Compounders. We are glad to inform you that Woof Software passed Polygon USDT market deployment to OpenZeppelin team for auditing. Looking forward to their feedback.

Deploy compound v3 USDT market on Polygon

[dmitriywoofsoftware]

Hi Compounders. Woof Software has successfully deployed the USDT Polygon market contracts and passed all tests/scenarios/migration. Have a look at the useful links below.

Deployment PR

1. Woof local PR - Deploy compound v3 USDT market on Polygon by EviLord032 · Pull Request #6 · woof-software/comet · GitHub
2. Into Compound finance PR - Deploy compound v3 USDT market on Polygon by EviLord032 · Pull Request #850 · compound-finance/comet · GitHub

Actions

1. Run Slither. Fails. Deploy compound v3 USDT market on Polygon · woof-software/comet@bafab7e · GitHub
2. Forge test. Success. Deploy compound v3 USDT market on Polygon · woof-software/comet@bafab7e · GitHub
3. Gas Profiler. Success. Deploy compound v3 USDT market on Polygon · woof-software/comet@bafab7e · GitHub
4. Scan. Success. Deploy compound v3 USDT market on Polygon · woof-software/comet@bafab7e · GitHub
5. polygon-usdt Scenario. Success. Deploy compound v3 USDT market on Polygon · woof-software/comet@bafab7e · GitHub
6. Unit tests. Success. Deploy compound v3 USDT market on Polygon · woof-software/comet@bafab7e · GitHub
7. Eslint. Success. Deploy compound v3 USDT market on Polygon · woof-software/comet@bafab7e · GitHub
8. Contract linter. Success. Deploy compound v3 USDT market on Polygon · woof-software/comet@bafab7e · GitHub
9. Deploy. Success. Deploy Market · woof-software/comet@bafab7e · GitHub

On-chain PR, after contract deployment

1. Woof local PR - On-chain proposal v3 USDT market on Polygon by EviLord032 · Pull Request #11 · woof-software/comet · GitHub
2. Into Compound finance PR - On-chain proposal v3 USDT market on Polygon by EviLord032 · Pull Request #858 · compound-finance/comet · GitHub

Actions

1. Run Slither. Fails. On-chain proposal v3 USDT market on Polygon · woof-software/comet@a7f585b · GitHub
2. Forge test. Success. On-chain proposal v3 USDT market on Polygon · woof-software/comet@a7f585b · GitHub
3. Gas Profiler. Success. On-chain proposal v3 USDT market on Polygon · woof-software/comet@a7f585b · GitHub
4. Scan. Success. On-chain proposal v3 USDT market on Polygon · woof-software/comet@a7f585b · GitHub
5. polygon-usdt Scenario. Success. On-chain proposal v3 USDT market on Polygon · woof-software/comet@a7f585b · GitHub
6. Unit tests. Success. On-chain proposal v3 USDT market on Polygon · woof-software/comet@a7f585b · GitHub
7. Eslint. Success. On-chain proposal v3 USDT market on Polygon · woof-software/comet@a7f585b · GitHub
8. Contract linter. Success. On-chain proposal v3 USDT market on Polygon · woof-software/comet@a7f585b · GitHub
9. Enact Migration with impersonate - Success Enact Migration · woof-software/comet@a7f585b · GitHub

[0xajs]

I recommend USDC, DAI also as new assets for the market

[dmitriywoofsoftware]

Updated market data.

PR - On-chain proposal v3 USDT market on Polygon by EviLord032 · Pull Request #858 · compound-finance/comet · GitHub

Actions

1. Run Slither. Fails. . On chain proposal for USDT Polygon market · woof-software/comet@3b8cc6e · GitHub
2. Forge test. Success. On chain proposal for USDT Polygon market · woof-software/comet@3b8cc6e · GitHub
3. Gas Profiler. Success. On chain proposal for USDT Polygon market · woof-software/comet@3b8cc6e · GitHub
4. Scan. Success. On chain proposal for USDT Polygon market · woof-software/comet@3b8cc6e · GitHub
5. polygon-usdt Scenario. Success. On chain proposal for USDT Polygon market · woof-software/comet@3b8cc6e · GitHub
6. Unit tests. Success. On chain proposal for USDT Polygon market · woof-software/comet@3b8cc6e · GitHub
7. Eslint. Success. On chain proposal for USDT Polygon market · woof-software/comet@3b8cc6e · GitHub
8. Contract linter. Success. On chain proposal for USDT Polygon market · woof-software/comet@3b8cc6e · GitHub
9. Deploy. Deploy Market · woof-software/comet@b618ab9 · GitHub
10. Enact Migration with impersonate - Success Enact Migration · woof-software/comet@3b8cc6e · GitHub

Description we use:

Initialize cUSDTv3 on Polygon\n\n

Proposal summary\n\n

Compound Growth Program [AlphaGrowth] proposes the deployment of Compound III to the Polygon network. This proposal takes the governance steps recommended and necessary to initialize a Compound III USDT market on Polygon; upon execution, cUSDTv3 will be ready for use. Simulations have confirmed the market’s readiness, as much as possible, using the Comet scenario suite. The new parameters include setting the risk parameters based on the recommendations from Gauntlet.\n\n

Further detailed information can be found on the corresponding proposal pull request, market deployment action and forum discussion.\n\n\n

Proposal Actions\n\n

The first proposal action sets the Comet configuration and deploys a new Comet implementation on Polygon. This sends the encoded setFactory, setConfiguration and deployAndUpgradeTo calls across the bridge to the governance receiver on Polygon. It also calls setRewardConfig on the Polygon rewards contract, to establish Polygon’s bridged version of COMP as the reward token for the deployment and set the initial supply speed to be 8 COMP/day and borrow speed to be 4 COMP/day.\n\n

The second action reduces Compound cUSDT reserves to Timelock, in order to seed the market reserves through the Polygon RootChainManager.\n\n

The third action approves Polygon’s RootChainManager to take Timelock’s USDT, in order to seed the reserves through the bridge.\n\n

The fourth action deposits 10K USDT from mainnet to the Polygon RootChainManager contract to bridge to Comet.\n\n

The fifth action updates the ENS TXT record v3-official-markets on v3-additional-grants.compound-community-licenses.eth, updating the official markets JSON to include the new Polygon cUSDTv3 market.

[0xajs]

Yes, please :):):):):):)

[sharp]

The proposal has been posted on chain. If you have delegation, please consider supporting the proposal

Compound

[jbass-oz]

Proposal 265 Review

Proposal 265 was proposed using guidance from the recent Proposal Deployment Security Process Update without prior review by OpenZeppelin. As described in the recent process update, OpenZeppelin will do its best to review the proposal for potential security issues within the time and schedule constraints of the governance process. We encourage community members to also scrutinize proposal payloads themselves using tools, not limited to, the recent Seatbelt Integration.

If this proposal executes before proposal 262, the ENS record will be overwritten effectively removing the Polygon USDT Comet Market address. Please see details in Concurrent Proposals with ENS Updates. OpenZeppelin’s Governance Automation is expected to execute these proposals in the correct order to mitigate this risk.