I just want to clear up some confusion here. Back when the cCOMP market was added, there was concern about governance manipulation though borrowing upwards of 100k COMP, as such, it was decided that setting the borrow cap above 100k is a significant action which should only be done by governance. The community multisig is following expectations, and raised the borrow cap multiple times until reaching this point.
I would like to see governance have the ability to fine-tune COMP distribution beyond the 50:50 allocation.
This issue goes much beyond the 50:50 COMP allocation though. While COMP holders definitely should receive special rewards from the protocol, I don’t believe that cCOMP is the means of distributing it. A long term staking process for COMP is needed, and personally, I don’t think this involves cCOMP. I don’t understand the drive to give the cCOMP market excess rewards, as this goes against the COMP agenda. Users who deposit to cCOMP are not participating in governance and forfeiting their voting power for monetary collateral and interest. The cCOMP market is needed, but I don’t it think should be manipulated with excess COMP rewards—an alternative for COMP staking with a different structure is needed. There is an argument to allow cCOMP holders to vote, but this comes with its own list of issues.
To fix this current situation, we need a new type of interest rate model which would be cognizant of the borrow cap. Treating the cap as 100% utilization would quickly “fix” the market. It is quite clear that there is significant excess demand at the borrow cap, and the interest rate should be higher. This in conjunction with lowering the cCOMP COMP distribution to be inline with other small-cap collateral assets (1950000000000000) makes sense.