Summary
AlphaGrowth proposes on the addition of the ETH market to Compound V3 on Unichain
Motivation
The Uniswap DAO has recently started deploying incentives as part of their mandate to grow liquidity on Unichain. Unichain liquidity has increased by more than $300M in the past few days as a result of this campaign. To capitalize on this opportunity, AlphaGrowth proposes listing the WETH comet on Compound V3 on Unichain.
Point of Contact: AlphaGrowth team, Sharpweb3 on TG
Proposed Collateral
We propose adding the following asset as collaterals for the market
- wstETH
- weETH
- rsETH
- ezETH
- UNI
- COMP
- WBTC
We invite the community to suggest and give input on any other collateral assets.
About the Proposer:
This proposal was strategized in close collaboration with the Uniswap Foundation
Next Steps
We invite the community to consider this application for listing the ETH market and welcome suggestions in this direction.
Additionally, we look forward to the community to suggest
Collateral Factor
Reserve Factor
Borrowing Limit
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[Gauntlet] - Unichain Recommendations
Simple Summary
If the community wishes to deploy a WETH comet on Unichain, We recommend the following initial parameter recommendations:
Risk Parameters
WETH Comet
| Asset |
Collateral Factor |
Liquidation Factor |
Liquidation Penalty |
Supply Cap |
| WBTC |
80% |
85% |
10% |
120 WBTC |
| ezETH |
88% |
91% |
6% |
2200 ezETH |
| wstETH |
90% |
93% |
3% |
5000 wstETH |
| weETH |
90% |
93% |
4% |
5000 weETH |
| UNI |
70% |
75% |
20% |
500k UNI |
Rationale
Supply Caps and Liquidation Penalty
WETH Comet
For WETH Comet, Gauntlet recommends aligning the LP to that set in the WETH Mainnet Comet.
| Asset |
Liquidation Penalty |
| wstETH |
3% |
| weETH |
4% |
| ezETH |
6% |
| WBTC |
10% |
| UNI |
20% |
Gauntlet recommends setting asset supply caps (Excluding WBTC) at 30% of their circulating supply . This recommendation is made in consideration of the use of exchange rate oracles on the WETH Comet.
| Asset |
Supply Cap |
| wstETH |
5000 |
| weETH |
5000 |
| ezETH |
2200 |
| UNI |
500k |
| WBTC |
125 |
For WBTC and UNI, we recommend setting supply caps to align with the slippage incurred at a level equivalent to the Liquidation Penalty, optimizing for greater capital efficiency.
WBTC/WETH
UNI/WETH
Collateral Factors (CF) and Liquidation Factors (LF)
Gauntlet recommends aligning the CF and LFs to that set in the Mainnet Comets.
WETH Comet
| Asset |
Collateral Factor |
Liquidation Factor |
| wstETH |
90% |
93% |
| weETH |
90% |
93% |
| ezETH |
88% |
91% |
| wrsETH |
90% |
93% |
| WBTC |
80% |
85% |
| UNI |
70% |
75% |
UNI/WETH Volatility
For UNI, given the annualized daily log vol of 65%, we recommend setting the Liquidation Factor to 75% and Collateral Factor 70%.
For WETH Comet
Targetted Reserves: 5000 WETH
Storefront price factor: 70%
IR Curve Parameters
WETH Comet
| Parameter |
Recommended Value |
| Annual Borrow Interest Rate Base |
0.01 |
| Annual Borrow Interest Rate Slope Low |
0.0155 |
| Borrow Kink |
0.9 |
| Annual Borrow Interest Rate Slope High |
1.26 |
| Annual Supply Interest Rate Base |
0 |
| Annual Supply Interest Rate Slope Low |
0.0216 |
| Supply Kink |
0.9 |
| Annual Supply Interest Rate Slope High |
1.125 |
Utilization vs APRs & Reserve Factor
Incentive Parameters
For WETH Comets
| Daily COMP Supply Rewards |
Daily COMP Borrow Rewards |
| 12 |
8 |
With the above utilization and the present Interest Rate curve, for Stablecoin comets:
- Supply APR: 1.94%
- Borrow APR: 2.5%
Given the current COMP price of $41 at 90% utilization:
- Supply Distribution APR: 0.95%
- Borrow Distribution APR: 0.71%
This results in the following Net APRs:
- Net Supply APR: 2.9%
- Net Borrow APR: 1.79%
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