[Gauntlet] - Linea Recommendations
Simple Summary
If the community wishes to deploy on Linea, we recommend the following initial parameter recommendations for the v3 USDC, USDT and WETH comets:
Risk Parameters
USDC Comet
| Asset | Collateral Factor | Liquidation Factor | Liquidation Penalty | Supply Cap |
|---|---|---|---|---|
| WBTC | 80% | 85% | 10% | 18 WBTC |
| WETH | 83% | 90% | 5% | 530 WETH |
| wstETH | 82% | 87% | 5% | 340 wstETH |
USDT Comet
| Asset | Collateral Factor | Liquidation Factor | Liquidation Penalty | Supply Cap |
|---|---|---|---|---|
| WBTC | 80% | 85% | 10% | 15 WBTC |
| WETH | 83% | 90% | 5% | 520 WETH |
| wstETH | 82% | 87% | 5% | 340 wstETH |
WETH Comet
| Asset | Collateral Factor | Liquidation Factor | Liquidation Penalty | Supply Cap |
|---|---|---|---|---|
| WBTC | 80% | 85% | 10% | 22 WBTC |
| ezETH | 88% | 91% | 6% | 7200 ezETH |
| wstETH | 90% | 93% | 3% | 500 wstETH |
| weETH | 90% | 93% | 4% | 4600 weETH |
| wrsETH | 90% | 93% | 4% | 1150 wrsETH |
Rationale
Supply Caps and Liquidation Penalty
USDC and USDT Comets
Reviewing the liquidity pathways from the collateral assets to USDC and USDT, Gauntlet recommends aligning the LP to that set in the USDC and USDT comets on Mainnet.
| Asset | Liquidation Penalty |
|---|---|
| WBTC | 10% |
| WETH | 5% |
| wstETH | 5% |
USDC Comet
Gauntlet recommends setting the supply caps to the levels suggested below for the following assets on USDC Comet:
| Asset | Supply Cap |
|---|---|
| WBTC | 18 |
| WETH | 530 |
| wstETH | 340 |
WBTC/USDC Slippage
WETH/USDC Slippage
wstETH/USDC Slippage
USDT Comet
Gauntlet recommends setting the supply caps to the levels suggested below for the following assets on USDT Comet:
| Asset | Supply Cap |
|---|---|
| WBTC | 15 |
| WETH | 520 |
| wstETH | 340 |
WBTC/USDT Slippage
WETH/USDT Slippage
wstETH/USDT Slippage
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% |
| wrsETH | 4% |
| WBTC | 10% |
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 | 500 |
| weETH | 4600 |
| ezETH | 7200 |
| wrsETH | 1150 |
| WBTC | 22 |
For WBTC, we recommend setting supply caps to align with the slippage incurred at a level equivalent to the Liquidation Penalty.
Collateral Factors (CF) and Liquidation Factors (LF)
Gauntlet recommends aligning the CF and LFs to that set in the Mainnet Comets
USDC and USDT Comet
| Asset | Collateral Factor | Liquidation Factor |
|---|---|---|
| WBTC | 80% | 85% |
| WETH | 83% | 90% |
| wstETH | 82% | 87% |
WETH Comet
| Asset | Collateral Factor | Liquidation Factor |
|---|---|---|
| wstETH | 90% | 93% |
| weETH | 90% | 93% |
| ezETH | 88% | 91% |
| wrsETH | 90% | 93% |
| WBTC | 80% | 85% |
For USDC and USDT Comet
Targetted Reserves: 20M
Storefront price factor: 60%
For WETH Comet
Targetted Reserves: 5000 WETH
Storefront price factor: 70%
IR Curve Parameters
Gauntlet recommends aligning the IR parameters to those comets on Mainnet :
USDC and USDT Comet
| Parameter | Current Value | Recommended Value |
|---|---|---|
| Annual Borrow Interest Rate Base | 0.015 | 0.015 |
| Annual Borrow Interest Rate Slope Low | 0.0333 | 0.05 |
| Borrow Kink | 0.9 | 0.9 |
| Annual Borrow Interest Rate Slope High | 4 | 3.4 |
| Annual Supply Interest Rate Base | 0 | 0 |
| Annual Supply Interest Rate Slope Low | 0.039 | 0.054 |
| Supply Kink | 0.9 | 0.9 |
| Annual Supply Interest Rate Slope High | 3.6 | 3.034 |
Utilization vs APRs & Reserve Factor
WETH Comet
| Parameter | Current Value | Recommended Value |
|---|---|---|
| Annual Borrow Interest Rate Base | 0.01 | 0.01 |
| Annual Borrow Interest Rate Slope Low | 0.0145 | 0.0155 |
| Borrow Kink | 0.9 | 0.9 |
| Annual Borrow Interest Rate Slope High | 1.5 | 1.26 |
| Annual Supply Interest Rate Base | 0 | 0 |
| Annual Supply Interest Rate Slope Low | 0.0165 | 0.0216 |
| Supply Kink | 0.9 | 0.9 |
| Annual Supply Interest Rate Slope High | 1.2 | 1.125 |
Utilization vs APRs & Reserve Factor
Incentive Parameters
For USDC and USDT Comets
Our COMP rewards recommendations are designed to offer appealing distribution APRs when the comets are first launched and when supply caps are highly utilized.
Gauntlet is recommending supply rewards to incentivize a more significant inflow of supply tokens into the protocol. This is important in the early stages of protocol growth before borrowers can join. Daily COMP rewards are subject to change as TVL rises and the markets evolve.
| Daily COMP Supply Rewards | Daily COMP Borrow Rewards |
|---|---|
| 4 | 3 |
With the above utilization and the present Interest Rate curve, for Stablecoin comets:
- Supply APR: 6%
- Borrow APR: 4.8%
Given the current COMP price of $74 at 90% utilization:
- Supply Distribution APR: 4.73%
- Borrow Distribution APR: 3.95%
This results in the following Net APRs:
- Net Supply APR: 9.59%
- Net Borrow APR: 2.05%
For WETH Comets
| Daily COMP Supply Rewards | Daily COMP Borrow Rewards |
|---|---|
| 10 | 4 |
With the above utilization and the present Interest Rate curve, for Stablecoin comets:
- Supply APR: 1.94%
- Borrow APR: 2.40%
Given the current COMP price of $74 at 90% utilization:
- Supply Distribution APR: 1.24%
- Borrow Distribution APR: 0.55%
This results in the following Net APRs:
- Net Supply APR: 3.19%
- Net Borrow APR: 1.84%