Compound V3 ETH Comet: Risk Parameter Updates 2023-03-02

Simple Summary

A proposal to adjust one (1) risk parameter (supply cap) across one (1) Compound V3 ETH Comet asset.


Parameter Current Value Recommended Value
cbETH Supply Cap 30,000 40,000


These parameter updates are a continuation of Gauntlet’s regular parameter recommendations as part of Dynamic Risk Parameters.


This set of parameter updates seeks to maintain the overall risk tolerance of the protocol while making risk trade-offs between specific assets. Gauntlet has published a blog post on our parameter recommendation methodology to provide more context to the community.

Top 30 borrowers’ aggregate positions & borrow usages

Top 30 borrowers’ entire supply

Top 30 borrowers’ entire borrows

Top 10 cbETH suppliers’ cbETH supply & percentage of total cbETH supply:

Top 10 cbETH suppliers’ cbETH supply & borrow usage:

Top 10 cbETH suppliers’ entire supply:

Top 10 cbETH suppliers’ entire borrows:

Top 10 ETH borrowers’ ETH borrows & percentage of total ETH borrows:

The proposal to increase cbETH supply cap from 20k to 30k was executed on 2023-02-20. The cbETH supply cap of 30k is now 98.5% utilized.

cbETH supply from 2023-02-15 to 2023-02-28

The user with address 0xccfa0530b9d52f970d1a2daea670ce58e4176389 accounts for 36% of the total cbETH supply and 40% of the total ETH borrows, and this user increased their cbETH token supply by 3300 on the day the proposal was executed. Since then, new users have joined the protocol, supplying the remaining ~6200 cbETH tokens to approach the supply cap.

Daily open, high, low, close ratio between cbETH and WETH from 2022-08-24

cbETH-WETH price has continued to trend upwards. As a result, there are decreasing depegging risks. Our models show that it would require around > 7% depeg for insolvencies to occur.

Additionally, liquidity for cbETH/ETH is sufficient as of 2023-03-01. The daily volume on CEXs is $10M. Across DEXs, 5k cbETH is able to be swapped for ETH at 1.57% slippage, according to 1INCH, as shown below.

Therefore, we propose increasing the cbETH supply cap to 40k.

Next Steps

  • Targeting on-chain proposal next week.

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1 Like

We have published the on-chain vote below: