Simple Summary
A proposal to adjust one (1) risk parameter (collateral factor) across one (1) Compound V2 asset.
Gauntlet proposes decreasing cWBTC (legacy) collateral factor as a first step in fully deprecating the asset.
Also, we have recently created a separate proposal to start migrating the top V2 non-recursive stablecoin borrowers and suppliers over to Compound V3.
Specification
| Parameter | Current Value | Recommended Value |
|---|---|---|
| cWBTC (legacy) Collateral Factor | 70% | 60% |
The CF decrease results in $0 in supply of projected risk-off liquidations. We will continue to run liquidation analyses throughout the proposal to measure whether the CF decrease will result in any risk-off liquidations.
Motivation
This set of parameter updates seeks to begin the deprecation process of legacy WBTC as a housekeeping item for the protocol, as mentioned here.
Top 30 borrowers’ aggregate positions & borrow usages
Top 30 borrowers’ entire supply
Top 30 borrowers’ entire borrows
Price changes of key assets since 2023-02-15
Users at Risk Analysis
The borrow usages of the riskiest users in Compound v2 have not changed significantly since our last update, outside of the following user whose borrow usage has increased due to an increase in borrows of ETH and USDC.
User 1: 0x7e6f6621388047c8a481d963210b514dbd5ea1b9
User supply breakdown
Relevant collateral factors
User borrowing power breakdown
User borrows breakdown
User borrow usage
User supply since 2023-02-01
User borrows since 2023-02-01
Below is a time series of borrow usage for this user, with the purple bars corresponding to dates when the user actively updated the tokens in their position. From this, we can observe the user’s “intended” borrow usage.
User borrow usage time series since 2023-02-01
The community has recently decreased CFs for SUSHI and COMP. Currently, this position does not pose outsized risk, but we will continue to monitor this position and alert the community if it becomes substantially riskier.
cWBTC (legacy) Analysis
Currently, a total of $3.6M cWBTC (legacy) is supplied in Compound v2.
Top 10 cWBTC suppliers’ cWBTC supply
The top supplier with address 0xafebc3ce67551a998c90b01df281a4846e806434 accounts for roughly half of the entire v2 cWBTC (legacy) supply.
Top 10 cWBTC suppliers’ entire supply
Top 10 cWBTC suppliers’ entire borrows
Top 10 cWBTC suppliers’ liquidatable cWBTC CFs
The above chart shows the cWBTC CF values, which would cause each user’s position to become liquidatable. The greatest value is 52.1%. Our proposed cWBTC CF of 60% would not liquidate any users, including users outside the top 10.
Next Steps
- Welcome community feedback.
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