[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% |
| 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%