Deploy Compound III on Ronin

[Lionel]

Preamble:

Type: Multichain Deployment

Title: Deploy Compound III on Ronin

Authors: @BaileyT @Lionel @justin_ronin from Ronin Ecosystem

Overview of Proposal:

• Ronin is an EVM-compatible Layer 1 Blockchain, optimized for near-instant transactions and negligible fees that enable millions of seamless in-app transactions. Trusted by millions making it the leading choice for Web3 games & consumer applications.
• The network currently runs on the DPoS consensus mechanism, and utilizes Chainlink CCIP for cross-chain communication.
• The Ronin Ecosystem team proposes the deployment of Compound III onto the Ronin Network, with WETH and USDC markets, and RON, WETH, USDC, WBTC, AXS, PIXEL as proposed collateral assets.
• Ronin will open up its ecosystem for permissionless smart contract deployment in Q1 2025, with a focus on growing the DeFi vertical. We are excited to propose a synergistic partnership with Compound and its community.

Links

Socials & Overview

• Website : https://roninchain.com/
• Twitter : x.com
• Whitepaper: Ronin Docs

Audits

• Ronin Bridge & DPoS Consensus Audits: Security audits | Ronin Docs

Token & Chain Metrics

• Dune Dashboard : https://dune.com/ronin/ronin-overview-dashboard
• Coingecko
  • https://www.coingecko.com/en/coins/ronin
• CoinmarketCap:
  • Ronin price today, RON to USD live price, marketcap and chart | CoinMarketCap

Motivation

Overview

Ronin is an EVM-compatible Layer 1 Blockchain forged for Gaming. Following a successful community-centric growth strategy, Ronin has curated a loyal userbase with 29m+ unique wallets and 4.7m MAUs, making it the #1 gaming chain by active users.

Ronin has now set its sights on furthering the ecosystem by going permissionless in Feb 2025 in an initiative known as Open Ronin. A core part of this strategy is to grow our DeFi vertical, providing users access to reputable money market protocols and increasing utilization of the $RON token.

Synergies

We believe Compound and Ronin can strongly benefit from a synergistic partnership.

Compound protocol will be positioned as the leading DeFi protocol on Ronin, a battle-tested ecosystem primed for explosive growth. Compound will share in Ronin’s massive network effects, directly servicing our ~4.7m MAUs and 50+ dApps. The majority of these users were onboarded directly into Ronin without using DeFi apps on other EVM chains, presenting an opportunity for Compound to acquire net new users.

Compound’s deployment on Ronin will also mark the protocol’s first foray into an alt-L1, furthering its reputation as the multi-chain DeFi protocol of choice.

Ronin will benefit from Compound’s liquidity and proven DeFi infrastructure, providing our community with a safe and reputable avenue for unlocking greater capital efficiency. Having a robust DeFi ecosystem also increases Ronin’s targetable audience, servicing not just retail gamers but opening the doors for traders, degens, whales, liquid funds, and other institutional investors. This userbase expansion contributes to a growth flywheel that will mutually benefit Compound as well.

Grant Application

No, we did not apply for the Compound Grants Program.

Non-Technical Evaluation

As of 16th Dec 2024:

• Value of assets on-chain: $172m TVL, $1.1bn TVB on DeFi Llama

• Number of protocols on the chain: ~50 protocols - Ecosystem Map

• (#) of unique addresses on the chain: 29,469,163

• Active Addresses: https://dune.com/ronin/ronin-overview-dashboard

  • 1 Day: 835,220
  • 7 Day: 1,567,299
  • 30 Day: 3,384,444

Rationale

1. The Ronin Community

• Ronin is the #1 gaming blockchain by real and active users, currently recording 786k DAUs and peaking at 2.2m DAUs earlier in July 2024. It is also ranked in top 3 L1s by DAU only behind Solana and Tron, consistently recording ~60m monthly transactions in the past year.

• Massive gamer and creator community, with over 2.5M followers on Twitter, >700k Discord members (top 6th in the world), 340k substack subscribers, >2500 creators.

• dApps who deploy on Ronin have historically benefited from the “Ronin Effect”, with Pixels experiencing a 200x in user growth since migrating to Ronin, and hitting >700k DAUs. A recent report by Messari summarizes the Ronin Effect and its key benefits for protocols deploying on Ronin.

2. The Ronin Liquidity

• Katana is Ronin’s DEX of choice, with $174m in TVL. There have been minimal $RON incentives to bootstrap till date, presenting an exciting yield opportunity for the Compound community to leverage.

• The Ronin NFT marketplaces in aggregate have maintained ~$200k in daily volume transacted, placing it near Magic Eden and x2y2.

• The Ronin bridge has $1.2bn in TVB across 7 key assets including USDC, WETH, WBTC and AXS. These assets are mostly used for utilization on the chain due to the limited DeFi opportunities, but poised for growth in Open Ronin.

• There is ~$520m worth of $RON tokens currently staked across 30 validators and 277k delegators, a substantial amount of liquidity that can be tapped into.

• Ronin users are hungry for high quality liquid opportunities as shown by Wild Forest’s recent 3.3x oversubscribed $2m community sale.

• The Ronin Incentive Fund has reserves of ~$230m in $RON incentives that can be deployed in multiple phases. ~$33m is available immediately to support and catalyze the growth of the chain.

3. The Ronin Roadmap

• Ronin will open up its ecosystem for permissionless smart contract deployment in Q1 2025, with a focus on growing the DeFi vertical. The team has revamped the Developer Journey to equip and support new builders to come onboard. It is in mutual interest for bluechip DeFi protocols like Compound to deploy early to build traction, familiarity and stickiness with the net-new Ronin user base.

• Builders will soon be able to leverage the polygon CDK to launch their own ZK L2s on top of the Ronin mainnet, opening the door to faster and more accessible consumer experiences on Ronin. This presents an exciting opportunity for Compound to scale horizontally together with Ronin.

• Ronin has partnered with Chainlink to utilize CCIP as the bridge infrastructure of choice for greater security, as well as their data feeds for secure and reliable pricing data. The oracle infrastructure has already been set up, and on track to integrate more price feeds by January 2025.

Proposed Markets

Proposed based on current DEX TVL, Volume, and Holder Count, and asset familiarity. Ronin is looking forward to Compound community’s feedback.

Market	Collateral Assets
WETH Market	RON, USDC, WBTC, AXS, PIXEL
USDC Market	RON, WETH, WBTC, AXS, PIXEL

Security Considerations

Some of the risks that should be taken into consideration:

• Validator set currently of 30 total validators, consisting of 12 trusted Governing Validators (GVs) and 18+ Rotating Validators (RVs). With the opening of Ronin and staking incentives, we anticipate even more RVs to come online, further reducing centralization risk.

  • Consensus Documentation
  • Validator Dashboard
  • Audits

• Bridge

  • Bridge migration to using more secure Chainlink CCIP infrastructure, on track for completion before Open Ronin in February.
  • Whitehat Bridge 2024:
    • Post Mortem
    • External Audits & Reopening
  • Ronin Validator Bridge 2022
    • Post Mortem

• Ronin will be opening up its ecosystem to enable permissionless deployment in Q1 2025. There are multiple ongoing risk assessments, with more information to be shared publicly once available.

Copyright Waiver

Copyright and related rights waived via CC0 2

[mexilc]

Reliable oracles are needed

Ronin has a lot of work to get liquidity, infra, to an acceptable level to warrant a deployment

[sharp]

In our talks with Ronin, the Ronin team has committed to the Growth Program’s standard 10-1 requirements that we have for Chains. Under this Ronin will allocate 10M in Liquidity bootstrapping to kickstart the market and $1M in incentives to boost the activity on the Market. In that aspect, we are supportive of Compound’s deployment on Ronin.

For Oracles, we confirmed with Chainlink and the Ronin team that Chainlink integration is in development.

As Ronin goes permissionless in Q1 25, it will be a good opportunity for Compound to be early in establishing our presence on the Chain. We look forward to the community opinion and Gauntlet Recommendations for the potential deployment.

[Sudipan_Chainrisk]

[Chainrisk] - Ronin USDC Comet Recommendations

Collateral Asset Selection

Proposed Market Details

Base Asset: USDC

“Note :- All data referenced in this draft has been sourced from records dated January 17, 2025.”

Collateral Assets Under Consideration:

• WETH
• RON
• AXS
• PIXEL
• WBTC

On-Chain Supply and Market Cap Analysis:

RON is the native token of the Ronin Chain. Other collateral assets are bridged to the Ronin chain primarily from Ethereum and Base, using Chainlink CCIP and the Ronin Bridge. These bridged assets represent the total token supply available within the Ronin Chain ecosystem. Approximately $984.78 million in assets are bridged from the Ethereum chain.

Data Source: https://dune.com/hashed_official/ronin-bridge

Token	Price(in USD)	Market Cap (in USD)
RON	$1.85	$700M
WETH	$3305	$115M
AXS	$6.65	$724M
PIXEL	$0.1513	$91M
WBTC	$102,000	$507K

Past Bridged Value:

Liquidity Analysis:

Token	DEX Liquidity
WRON	$62M
WETH	$36M
AXS	$13M
PIXEL	$660K
WBTC	$200K

DEX Liquidity Analysis:

Our DEX liquidity analysis focuses on various trading pairs within Katana DEX (which is currently the only DEX in Ronin Chain), particularly on Collateral/USDC Pair liquidity.

For the analysis we haven’t considered any liquidity pool with less than $1k TVL.

WETH / USDC Pair:

Pool	TVL	Volume(24 Hour)	Volume(7 days)
USDC - WETH V2	$3.01M	$336.53K	$1.70M

AXS / USDC Pair:

Pool	TVL	Volume(24 Hour)	Volume(7 days)
USDC - AXS V3	$1.06M	$247.47K	$1.75M
USDC - AXS V3	$13.86K	$0.09	$1.98
USDC - AXS V2	$44.48K	$2.56K	$132.04K

WBTC/USDC Pair:

Pool	TVL	Volume(24 Hour)	Volume(7 days)
USDC - WBTC V2	$6.62K	$289.32	$3.41K

PIXEL/USDC Pair:

Pool	TVL	Volume(24 Hour)	Volume(7 days)
USDC - PIXEL V2	$44.29K	$6.87K	$71.48K
USDC - PIXEL V3	$13.53K	$963.35	$18.53K

It is important to note that Collateral/RON pairs in the DEX is larger than Collateral/USDC Pairs. During liquidation events, collateral assets can be efficiently swapped into RON, which can subsequently be swapped back to USDC. Currently, RON/USDC Pair has aggregate liquidity pools for around $20M.
For this reason, we have included an analysis of the Collateral/RON pair in our evaluation.

Pool	TVL	Volume(24 Hour)	Volume(7 days)
WETH - RON V2	$59M	$2.05M	$17.20M
WETH - RON V3	$2.02M	$684.68K	$4.46M
WETH - RON V3	$6.06K	$211.71	$1.36K
AXS - RON V2	$22.65M	$450.56K	$4.81M
AXS - RON V3	$34.64K	$491.15	$4.80K
PIXEL - RON V2	$1.21M	$107.82K	$619.26K
PIXEL - RON V3	$18.06K	$4.08K	$21.05K
WBTC - RON V2	$386.81K	$34.59K	$115.32K

Volatility Analysis:

“The volatility analysis presented below is an annualized analysis specifically focused on USDC (Collateral/USDC).”

• RON

  Percentile	Close (%)	Low (%)
  30th	-43.90%	-29.40%
  35th	-34.70%	-19.91%
  40th	-27.21%	-13.24%

  For RONIN, the 30th percentile shows potential declines of -43.90% for Close and -29.40% for Low. At the 35th percentile, the declines reduce to -34.70% for Close and -19.91% for Low. By the 40th percentile, the risk decreases further, with Close and Low values at -27.21% and -13.24%, respectively.

• WETH

  Percentile	Close (%)	Low (%)
  30th	-28.16%	-14.44%
  35th	-19.98%	-7.51%
  40th	-10.51%	-1.35%

  For WETH, the 30th percentile reflects declines of -28.16% for Close and -14.44% for Low. At the 35th percentile, the losses decrease to -19.98% for Close and -7.51% for Low. By the 40th percentile, the declines moderate further to -10.51% for Close and -1.35% for Low.

• AXS

  Percentile	Close (%)	Low (%)
  30th	-43.09%	-33.45%
  35th	-32.85%	-27.56%
  40th	-20.13%	-12.81%

  For AXS, the 30th percentile shows considerable declines, with -43.09% for Close and -33.45% for Low. At the 35th percentile, the losses shrink to -32.85% for Close and -27.56% for Low. By the 40th percentile, the risk further reduces to -20.13% for Close and -12.81% for Low.

• PIXEL

  Percentile	Close (%)	Low (%)
  30th	-66.83%	-54.23%
  35th	-58.16%	-38.81%
  40th	-43.80%	-21.59%

  For PIXEL, the 30th percentile indicates severe declines, with -66.83% for Close and -54.23% for Low. At the 35th percentile, the losses reduce to -58.16% for Close and -38.81% for Low. By the 40th percentile, the risk drops further to -43.80% for Close and -21.59% for Low.

• WBTC

  Percentile	Close (%)	Low (%)
  30th	-16.21%	-17.91%
  35th	-10.11%	-7.46%
  40th	-6.69%	-2.31%

  For WBTC, the 30th percentile shows moderate declines, with -16.21% for Close and -17.91% for Low. At the 35th percentile, the losses reduce significantly to -10.11% for Close and -7.46% for Low. At the 40th percentile, the declines are minimized to -6.69% for Close and -2.31% for Low.

Note : If the x^{th} percentile for the log returns is obtained as -y%, then probability that the expected log returns will be more than -y% is 1-\frac{x}{100}. For example if the 40^{th} percentile point is -7%, then the probability of expected log returns is more than -7% is 0.6.

Conclusion:

We recommend initially listing WETH and RON, as well as AXS collateral assets, in the USDC Market. Given the historical volatility associated with RON and AXS tokens, we advise implementing conservative parameters for these assets.
Conversely, we do not recommend adding PIXEL and WBTC at this time due to their insufficient on-chain DEX liquidity, which could lead to significant slippage during swaps. However, WBTC may be considered for future inclusion if additional tokens are bridged and liquidity in the DEX improves.

Recommended Market and Asset for Listing:

Market	Collateral Assets
USDC	RON, WETH, AXS

---

Risk Parameter Recommendation

Abstract

This post details the preliminary parameter recommendation for the new proposed USDC market for the Ronin comet. Chainrisk supports the listing of AXS, RON, and WETH in this upcoming market, and we present the listing parameter recommendations for the above assets. First, we present an overview of the recommended parameter values and then further deep dive into the market.

Asset	Collateral Factor (%)	Liquidation Factor (%)	Liquidation Penalty (%)	Supply Cap
WETH	85	89	10	250
RON	57	62	15	900,000
AXS	50	55	20	200,000

Detailed Analysis

Volatility Analysis:

The price movement of any asset is one of the best indicators of its market conditions. To understand the market conditions for deciding on the parameter recommendations, it is necessary to analyze the historical price of the assets. We start our analysis with the price graph for each of our suggested collateral assets.

Now, using the above historical price data, we analyze the difference in the log prices of each of the assets, which can give us an idea about the volatility of the asset during the past time period. The graph below shows us the change in the log prices of the collateral assets (AXS, RON, and WETH) at each of the time points.

The above graph shows that the log returns of AXS and RON are more volatile than WETH’s. It can be seen that the highest drop in price observed is around -0.11 and -0.16 for AXS and RON, respectively, while the highest drop for WETH is around -0.08. Also, it is to be observed that there are multiple drops near -0.10 for both AXS and RON, while most of the price drops for WETH are near -0.05.

Asset	Annualized Log Returns (35th Percentile) (in %)	Minimum Price Change Log
WETH	-1.74	-0.0905
RON	-22.86	-0.1619
AXS	-23.75	-0.0967

Log returns and volatility are fundamental concepts in financial analysis, particularly in understanding asset price movements and risk. Log returns measure the continuously compounded return of an asset, calculated as the natural logarithm of the ratio of consecutive prices. This approach offers advantages over simple returns, including time-additivity and symmetry for positive and negative price changes, making it more suitable for statistical analysis. The percentile analysis helps us to focus more on the scenarios of price drop, which might lead to liquidation of the position.

DEX Liquidity Analysis:

Our DEX liquidity analysis focuses on various trading pairs within Katana DEX (which is currently the only DEX in Ronin Chain), particularly on Collateral/USDC Pair liquidity.

For the analysis we haven’t considered any liquidity pool with less than $1k TVL.

USDC	$11.14 M
WETH	$36M
WRON	$62M
AXS	$13M

WETH / USDC Pair:

Pool	TVL	Volume(24 Hour)	Volume(7 days)
USDC - WETH V2	$3.01M	$336.53K	$1.70M

AXS / USDC Pair:

Pool	TVL	Volume(24 Hour)	Volume(7 days)
USDC - AXS V3	$1.06M	$247.47K	$1.75M
USDC - AXS V3	$13.86K	$0.09	$1.98
USDC - AXS V2	$44.48K	$2.56K	$132.04K

RON / USDC Pair:

Pool	TVL	Volume(24 Hour)	Volume(7 days)
USDC - RON V2	$18.32M	$1.25M	$15.94M
USDC - RON V3	$1.35M	$286.37K	$3.15M
USDC - RON V3	$109.16K	$7.65K	$107.06K

---

Slippage Analysis:

In each of the above scenarios, we observe that the current slippage corresponding to each of the collateral assets in the DeX is significantly lower than the set Liquidation Penalty (LP). This helps us to avoid any extreme scenario of a rise in slippage. Chainrisk recommends a supply cap and LP, as the table below reports.

Asset	Liquidation Penalty (%)	Supply Cap
AXS	20	200000 AXS
WETH	10	250 WETH
RON	15	900000 RON

AXS:

Trading 200000 AXS (approx. $1.13 M) for USDC incurs a slippage of around ~-15%.

WETH:

Trading 250 WETH (approx. $830K) for USDC incurs a slippage of around ~-8%.

RON:

Trading 900000 RON (approx. $1.5M) for USDC incurs a slippage of around ~-11%.

Store Front Price Factor: 60%

The Storefront Price Factor determines the fraction of the liquidation penalty that is allocated to buyers of collateral. The 60% factor is deemed appropriate as it provides a meaningful discount to encourage Liquidation participation while safeguarding the protocol against excessive risk.

Reserve Parameter:

Target Reserve: $20M

Seed Reserve: $50K

IR Curve:

Chainrisk recommends the parameters as given below for the USDC Market for increased utilization and value addition.

Parameter	Recommended Value
Annual Borrow Interest Rate Base	0.015
Annual Borrow Interest Rate Slope Low	0.05
Borrow Kink	0.9
Annual Borrow Interest Rate Slope High	3.4
Annual Supply Interest Rate Base	0
Annual Supply Interest Rate Slope Low	0.054
Supply Kink	0.9
Annual Supply Interest Rate Slope High	3.034

Incentive Parameters:

Upon the launch of a new market, low utilization rates are common. To incentivize borrowing, we recommend implementing COMP Supply Rewards. This recommendation aims to enhance borrowing activity within the USDC Comet on the Ronin Chain. We will monitor market responses closely to determine if further adjustments are necessary.

Daily COMP Supply Rewards	0
Daily COMP Borrow Rewards	5

At 90% Utilisation:

• Borrow APR: 6%
• Supply APR: 4.86%

Given the current COMP price of ~$75 (Dated 25th Jan 2025),

• COMP Borrow Rewards: 3.04%
• COMP Supply Rewards: 0%

This results in the below Net APRs:

Net Borrow APY: 2.96%

Net Supply APY: 4.86%

---

Regards
Team Chainrisk

[Sudipan_Chainrisk]

[Chainrisk] - Ronin WETH Comet Recommendations

Collateral Asset Selection

Proposed Market Details

Base Asset: WETH

“Note :- All data referenced in this draft has been sourced from records dated January 17, 2025.”

Collateral Assets under Consideration:

• USDC
• RON
• AXS
• PIXEL
• WBTC

On-Chain Supply and Market Cap Analysis:

RON is the native token of the Ronin Chain. Other collateral assets are bridged to the Ronin chain primarily from Ethereum and Base, using Chainlink CCIP and the Ronin Bridge. These bridged assets represent the total token supply available within the Ronin Chain ecosystem. Approximately $984.78 million in assets are bridged from the Ethereum chain.

Data Source: https://dune.com/hashed_official/ronin-bridge

Token	Price(in USD)	Market Cap (in USD)
RON	$1.85	$700M
AXS	$6.65	$724M
PIXEL	$0.1513	$91M
USDC	$1	$31M
WBTC	$102,000	$507K

Past Bridged Value:

Liquidity Analysis:

Token	DEX Liquidity
WRON	$62M
USDC	$11.14 M
AXS	$13M
PIXEL	$660K
WBTC	$200K

DEX Liqudity Analysis:

Our DEX liquidity analysis focuses on various trading pairs within Katana DEX (which is currently the only DEX in Ronin Chain), particularly on Collateral/WETH pair liquidity.

USDC / WETH Pair:

Pool	TVL	Volume(24 Hour)	Volume(7 days)
USDC - WETH V2	$3.01M	$336.53K	$1.70M

AXS / WETH Pair:

Pool	TVL	Volume(24 Hour)	Volume(7 days)
AXS - WETH V2	$2.72M	$113.42K	$959.03K

RON / WETH Pair:

Pool	TVL	Volume(24 Hour)	Volume(7 days)
RON V2 - WETH	$60.09M	$1.81M	$10.70M
RON V3 - WETH	$2.05M	$280.65K	$3.36M
RON V3 - WETH	$6.09K	$221.74	$383

WBTC/WETH Pair:

Pool	TVL	Volume(24 Hour)	Volume(7 days)
WBTC - WETH V3	$2.34K	$1.11K	$4.36K
WBTC - WETH V2	$265	$11.83	$97.45

PIXEL/WETH Pair:

Pool	TVL	Volume(24 Hour)	Volume(7 days)
PIXEL - WETH V3	$44	$0.89	$3.11

It is important to note that Collateral/RON pairs in the DEX is larger than Collateral/WETH pairs. During liquidation events, collateral assets can be efficiently swapped into RON, which can subsequently be swapped back to WETH. Currently, RON/WETH pair hosts the largest liquidity pool for WETH i.e. $60M.
For this reason, we have included an analysis of the Collateral/RON pair in our evaluation.

Pool	TVL	Volume(24 Hour)	Volume(7 days)
USDC - RON V2	$18.72M	$1.73M	$8.97M
USDC - RON V3	$1.44M	$368.99K	$2.30M
AXS - RON V2	$22.65M	$450.56K	$4.81M
AXS - RON V3	$34.64K	$491.15	$4.80K
PIXEL - RON V2	$1.21M	$107.82K	$619.26K
PIXEL - RON V3	$18.06K	$4.08K	$21.05K
WBTC - RON V2	$386.81K	$34.59K	$115.32K

Volatility Analysis:

“The volatility analysis presented below is an annualized analysis specifically focused on WETH (Collateral/WETH).”

• RON

  Percentile	Close (%)	Low (%)
  30th	-29.22%	-21.25%
  35th	-22.29%	-17.42%
  40th	-14.02%	-9.44%

  For RONIN, the 30th percentile shows substantial declines, with -29.22% for Close and -21.25% for Low. Moving to the 35th percentile, the losses moderate to -22.29% for Close and -17.42% for Low. At the 40th percentile, both Close and Low values reflect even smaller declines, reaching -14.02% and -9.44%, respectively. The percentile point is used to understand the probability of the scenario that we might expect the volatility of the asset to overshoot the obtained volatility at that percentile point. This gives us an idea the chance that the price may experience a drop higher than this obtained value. Thus for RONIN, we can expect that there is a 0.6 probability that the volatility will be within -14.02%.

• USDC

  Percentile	Close (%)	Low (%)
  30th	-26.18%	-22.24%
  35th	-20.17%	-16.50%
  40th	-12.09%	12.55%

  For USDC, the 30th percentile indicates notable declines of -26.18% for Close and -22.24% for Low. At the 35th percentile, the losses decrease to -20.17% for Close and -16.50% for Low. By the 40th percentile, the declines continue to reduce to -12.09% for Close and -12.55% for Low. The percentile point is used to understand the probability of the scenario that we might expect the volatility of the asset to overshoot the obtained volatility at that percentile point. This gives us an idea the chance that the price may experience a drop higher than this obtained value. Thus for USDC, we can tell with 0.6 probability that price drop will be within -12.09%.

• AXS

  Percentile	Close (%)	Low (%)
  30th	-27.19%	-25.18%
  35th	-21.97%	-14.94%
  40th	-18.29%	-8.58%

  For AXIE, the 30th percentile indicates significant potential losses, with -27.19% for Close and 25.18% for Low. By the 35th percentile, losses decrease to -21.97% for Close and -14.94% for Low. At the 40th percentile, the declines reduce further to -18.29% for Close and -8.58% for Low. The percentile point is used to understand the probability of the scenario that we might expect the volatility of the asset to overshoot the obtained volatility at that percentile point. This gives us an idea the chance that the price may experience a drop higher than this obtained value. Thus for AXIE, we can tell with 0.7 probability that price drop will be within -27.19%.

• PIXEL

  Percentile	Close (%)	Low (%)
  30th	-47.73%	-43.42%
  35th	-36.34%	-31.78%
  40th	-25.90%	-18.76%

  For PIXEL, the 30th percentile shows steep declines, with -47.73% for Close and -43.42% for Low, indicating significant volatility. By the 35th percentile, the losses shrink to -36.34% for Close and -31.78% for Low. At the 40th percentile, the risk reduces further to -25.90% for Close and -18.76% for Low. The percentile point is used to understand the probability of the scenario that we might expect the volatility of the asset to overshoot the obtained volatility at that percentile point. This gives us an idea the chance that the price may experience a drop higher than this obtained value. Thus for PIXEL, we can tell with 0.6 probability that price drop will be within -25.90%.

• WBTC

  Percentile	Close (%)	Low (%)
  30th	-8.03%	-7.07%
  35th	-3.06%	-3.28%
  40th	2.91%	-0.49%

  For WBTC, the 30th percentile shows relatively smaller declines, with -8.03% for Close and -7.07% for Low. At the 35th percentile, the losses further reduce to -3.06% for Close and -3.28% for Low. Interestingly, at the 40th percentile, the Close value turns positive at 2.91%, indicating a potential for slight gains, while the Low value remains negative at -0.49%. The percentile point is used to understand the probability of the scenario that we might expect the volatility of the asset to overshoot the obtained volatility at that percentile point. This gives us an idea the chance that the price may experience a drop higher than this obtained value. Thus for WBTC, we can tell with 0.7 probability that price drop will be within -8.03%.

Conclusion:

We recommend initially listing USDC and RON, as well as AXS collateral assets, in the WETH Market. Given the historical volatility associated with RON and AXS tokens, we advise implementing conservative parameters for these assets.
Conversely, we do not recommend adding PIXEL and WBTC at this time due to their insufficient on-chain DEX liquidity, which could lead to significant slippage during swaps. However, WBTC may be considered for future inclusion if additional tokens are bridged and liquidity in the DEX improves.

Recommended Market and Asset for Listing:

Market	Collateral Assets
WETH	RON, USDC, AXS

---

Risk Parameter Recommendation

Abstract

This post details the preliminary parameter recommendation for the new proposed WETH market for the Ronin comet. Chainrisk supports the listing of AXS, RON, and USDC in this upcoming market, and we present the listing parameter recommendations for the above assets. First, we present an overview of the recommended parameter values and then further deep dive into the market.

Asset	Collateral Factor (%)	Liquidation Factor (%)	Liquidation Penalty (%)	Supply Cap
USDC	84	88	10	800000
RON	50	55	15	2500000
AXS	44	49	20	250000

Detailed Analysis

Volatility Analysis:

The price movement of any asset is one of the best indicators of its market conditions. To understand the market conditions for deciding on the parameter recommendations, it is necessary to analyze the historical price of the assets. We start our analysis with the price graph for each of our suggested collateral assets.

Now, using the above historical price data, we analyze the difference in the log prices of each of the assets, which can give us an idea about the volatility of the asset during the past time period. The graph below shows us the change in the log prices of the collateral assets (AXS, RON, and WETH) at each of the time points.

The above graph shows that the log returns of AXS and RON are more volatile than WETH’s. It can be seen that the highest drop in price observed is around -0.11 and -0.16 for AXS and RON, respectively, while the highest drop for WETH is around -0.08. Also, it is to be observed that there are multiple drops near -0.10 for both AXS and RON, while most of the price drops for WETH are near -0.05.

Asset	Annualized Log Returns (35th Percentile) (in %)	Minimum Price Change Log
USDC	-1.18	-0.0882
RON	-30.22	-0.1619
AXS	-30.71	-0.1098

Log returns and volatility are fundamental concepts in financial analysis, particularly in understanding asset price movements and risk. Log returns measure the continuously compounded return of an asset, calculated as the natural logarithm of the ratio of consecutive prices. This approach offers advantages over simple returns, including time-additivity and symmetry for positive and negative price changes, making it more suitable for statistical analysis. The percentile analysis helps us to focus more on the scenarios of price drop, which might lead to liquidation of the position.

DEX Liquidity Analysis:

Our DEX liquidity analysis focuses on various trading pairs within Katana DEX (which is currently the only DEX in Ronin Chain), particularly on Collateral/WETH Pair liquidity.

For the analysis we haven’t considered any liquidity pool with less than $1k TVL.

USDC	$11.14 M
WETH	$36M
WRON	$62M
AXS	$13M

USDC / WETH Pair:

Pool	TVL	Volume(24 Hour)	Volume(7 days)
USDC - WETH V2	$3.01M	$336.53K	$1.70M

AXS / WETH Pair:

Pool	TVL	Volume(24 Hour)	Volume(7 days)
AXS - WETH V2	$2.72M	$113.42K	$959.03K

RON / WETH Pair:

Pool	TVL	Volume(24 Hour)	Volume(7 days)
RON - WETH V2	$60.09M	$1.81M	$10.70M
RON - WETH V3	$2.05M	$280.65K	$3.36M
RON - WETH V3	$6.09K	$221.74	$383

---

Slippage Analysis:

In each of the above scenarios, we observe that the current slippage corresponding to each of the collateral assets in the DeX is significantly lower than the set Liquidation Penalty (LP). This helps us to avoid any extreme scenario of a rise in slippage. Chainrisk recommends a supply cap and LP, as the table below reports.

Asset	Liquidation Penalty (%)	Supply Cap
AXS	20	250000
USDC	10	800000
RON	15	2500000

AXS:

Trading 250,000 AXS (approx. $1.4 M) for WETH incurs a slippage of around ~ -13%.

USDC:

Trading 800K USDC (approx. $800K) for WETH incurs a slippage of around ~ -7%.

RON:

Trading 2,500,000 RON (approx. $4.1M) for WETH incurs a slippage of around ~ -11%.

Store Front Price Factor: 70%

The Storefront Price Factor determines the fraction of the liquidation penalty that is allocated to buyers of collateral. The 70% factor is deemed appropriate as it provides a meaningful discount to encourage Liquidation participation while safeguarding the protocol against excessive risk.

Reserve Parameter:

Target Reserve: 5000 WETH

Seed Reserve: 25 WETH

IR Curve:

Chainrisk recommends the parameters as given below for the WETH Market for increased utilization and value addition.

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

Incentive Parameters:

Upon the launch of a new market, low utilization rates are common. To incentivize borrowing, we recommend implementing COMP Supply Rewards. This recommendation aims to enhance borrowing activity within the WETH Comet on the Ronin Chain. We will monitor market responses closely to determine if further adjustments are necessary.

Daily COMP Supply Rewards	0
Daily COMP Borrow Rewards	3

At 90% Utilisation:

• Borrow APR: 2.4%
• Supply APR: 1.944%

Given the current COMP price of ~$75 (Dated 25th Jan 2025),

• COMP Borrow Rewards: 1.83%
• COMP Supply Rewards: 0%

This results in the below Net APRs:

Net Borrow APY: 0.57%

Net Supply APY: 1.944%

---

Regards
Team Chainrisk

[Lionel]

The Ronin team is happy to share 2 updates:

1. Price feeds deployed
   Chainlink price feeds have been successfully deployed for the following tokens:

   • BTC/USD
   • ETH/USD
   • USDC/USD
   • USDT/USD
   • RON/USD
   • AXS/USD
   • LINK/USD

2. Update to proposed Compound markets
   Having consulted both AlphaGrowth and Chainrisk, we would like to revise our proposed Compound markets and launch with RON and WETH markets as outlined below:

   Market	Collateral Assets
   WETH Market	RON, USDC, WBTC, AXS, PIXEL
   RON Market	USDC, WETH, WBTC, AXS, PIXEL

We are excited for the potential partnership and look forward to the community feedback on the latest updates!

[Sudipan_Chainrisk]

[Chainrisk] - RON Comet Recommendations on Ronin

Collateral Asset Selection

Proposed Market Details

Base Asset: RON

“Note :- All data referenced in this draft has been sourced from records dated January 29, 2025.”

Collateral Assets under Consideration:

• USDC
• WETH
• AXS
• WBTC
• PIXEL

On-Chain Supply and Market Cap Analysis:

RON is the native token of the Ronin Chain. Other collateral assets are bridged to the Ronin chain primarily from Ethereum and Base, using Chainlink CCIP and the Ronin Bridge. These bridged assets represent the total token supply available within the Ronin Chain ecosystem. Approximately $825M in assets are bridged from the Ethereum chain.

Data Source: https://dune.com/hashed_official/ronin-bridge

Token	Price(in USD)	Market Cap (in USD)
RON	$1.5	$914.67M
WETH	$3,150	$98M
AXS	$5.12	$569M
PIXEL	$0.1	$61M
USDC	$1	$31M
WBTC	$102,300	$514K

Past Bridged Value:

Liquidity Analysis:

DEX Liquidity Analysis:

Our DEX liquidity analysis focuses on various trading pairs within Katana DEX (which is currently the only DEX in Ronin Chain), particularly on Collateral/RON pair liquidity.

Token	DEX Liquidity TVL
RON	$55.4M
WETH	$31.52M
USDC	$10.06M
AXS	10.5M
PIXEL	$515K
WBTC	$185K

Historical DEX Liquidity:

Token Breakdown:

USDC / RON Pair:

Pool	TVL	Volume(24 Hour)	Volume(7 days)
USDC - RON V2	$17.32M	$1.53M	$9.84M
USDC - RON V3	$1.24M	$300.02K	$2.27M
USDC - RON V3	$76.9K	$4.13K	$42.35K

AXS / RON Pair:

Pool	TVL	Volume(24 Hour)	Volume(7 days)
AXS - RON V2	$19.17M	$510.55K	$2.98M
AXS - RON V3	$146.77K	$35.48K	$232.43K
AXS - RON V3	$29.88K	$479.96	$3.42K

WETH / RON Pair:

Pool	TVL	Volume(24 Hour)	Volume(7 days)
WETH - RON V2	$54.73M	$675.08K	$6.99M
WETH - RON V3	$1.58M	$179.33K	$1.67M
WETH - RON V3	$5.56K	$40.67	$479.99

WBTC / RON Pair:

Pool	TVL	Volume(24 Hour)	Volume(7 days)
WBTC - RON V2	$362.61K	$8.45K	$102.69K

PIXEL / RON Pair:

Pool	TVL	Volume(24 Hour)	Volume(7 days)
PIXEL - RON V3	$19.49K	$4.44K	$27.73K
PIXEL - RON V2	$962.79K	$88.16K	$711.10K

Volatility Analysis:

“The volatility analysis presented below is an annualized analysis specifically focused on RON (Collateral/RON).”

• WETH

  Percentile	Close (%)	Low (%)
  30th	-15.35%	-15.23%
  35th	-10.59%	-8.39%
  40th	-7.02%	-4.97%

  For WETH, the 30th percentile shows substantial declines, with -15.35% for Close and -15.23% for Low. Moving to the 35th percentile, the losses moderate to -10.59% for Close and -8.39% for Low. At the 40th percentile, both Close and Low values reflect even smaller declines, reaching -7.02% and -4.97%, respectively. The percentile point is used to understand the probability of the scenario that we might expect the volatility of the asset to overshoot the obtained volatility at that percentile point. This gives us an idea the chance that the price may experience a drop higher than this obtained value. Thus for WETH**,** we can expect that there is a 0.6 probability that the volatility will be within -4.97%.

• USDC

  Percentile	Close (%)	Low (%)
  30th	-40.63%	-31.27%
  35th	-27.72%	-20.27%
  40th	-16.57%	-15.82%

  For USDC, the 30th percentile indicates notable declines of -40.63% for Close and -31.27% for Low. At the 35th percentile, the losses decrease to -27.72% for Close and -20.27% for Low. By the 40th percentile, the declines continue to reduce to -16.57% for Close and -15.82% for Low. The percentile point is used to understand the probability of the scenario that we might expect the volatility of the asset to overshoot the obtained volatility at that percentile point. This gives us an idea the chance that the price may experience a drop higher than this obtained value. Thus for USDC, we can tell with 0.6 probability that price drop will be within -15.82%.

• AXS

  Percentile	Close (%)	Low (%)
  30th	-18.52%	-13.35%
  35th	-13.35%	-8.60%
  40th	-8.18%	-4.49%

  For AXS, the 30th percentile indicates significant potential losses, with -15.82% for Close and -13.35% for Low. By the 35th percentile, losses decrease to -13.35% for Close and -8.60% for Low. At the 40th percentile, the declines reduce further to -8.18% for Close and -4.49% for Low. The percentile point is used to understand the probability of the scenario that we might expect the volatility of the asset to overshoot the obtained volatility at that percentile point. This gives us an idea the chance that the price may experience a drop higher than this obtained value. Thus for AXS, we can tell with 0.7 probability that price drop will be within -13.35%.

• PIXEL

  Percentile	Close (%)	Low (%)
  30th	-38.66%	-33.90%
  35th	-30.53%	-24.85%
  40th	-23.75%	-16.89%

  For PIXEL, the 30th percentile shows steep declines, with -38.66% for Close and -33.90% for Low, indicating significant volatility. By the 35th percentile, the losses shrink to -30.53% for Close and -24.85% for Low. At the 40th percentile, the risk reduces further to -23.75% for Close and -16.89% for Low. The percentile point is used to understand the probability of the scenario that we might expect the volatility of the asset to overshoot the obtained volatility at that percentile point. This gives us an idea the chance that the price may experience a drop higher than this obtained value. Thus for PIXEL, we can tell with 0.6 probability that price drop will be within -16.89%.

• WBTC

  Percentile	Close (%)	Low (%)
  30th	-15.52%	-13.10%
  35th	-7.53%	-7.38%
  40th	-3.18%	-4.03%

  For WBTC, the 30th percentile shows relatively smaller declines, with -15.52% for Close and -13.10% for Low. At the 35th percentile, the losses further reduce to -7.53% for Close and -7.38% for Low. Interestingly, at the 40th percentile, the Close value at -3.18%, indicating a potential for slight gains, while the Low value remains negative at -4.03%. The percentile point is used to understand the probability of the scenario that we might expect the volatility of the asset to overshoot the obtained volatility at that percentile point. This gives us an idea the chance that the price may experience a drop higher than this obtained value. Thus for WBTC, we can tell with 0.7 probability that price drop will be within -13.10%.

Conclusion:

We recommend initially listing USDC, WETH and AXS as collateral assets, in the RON Market. Given the historical volatility associated with collateral assets, we advise implementing conservative parameters for initial listing of these assets.
We do not recommend adding PIXEL and WBTC at this time due to their insufficient on-chain DEX liquidity, which could lead to significant slippage during swaps. However, WBTC may be considered for future inclusion if additional tokens are bridged and liquidity in the DEX improves.

Recommended Market and Asset for Listing:

Market	Collateral Assets
RON	WETH, USDC, AXS

---

Risk Parameter Recommendation

Abstract

This post details the preliminary parameter recommendation for the new proposed RON market for the Ronin comet. Chainrisk supports the listing of AXS, WETH, and USDC in this upcoming market, and we present the listing parameter recommendations for the above assets. First, we present an overview of the recommended parameter values and then further deep dive into the market.

Asset	Collateral Factor (%)	Liquidation Factor (%)	Liquidation Penalty (%)	Supply Cap
AXS	55	60	20	350,000
WETH	50	55	15	1350
USDC	56	60	15	1,500,000

Detailed Analysis

Volatility Analysis:

The price movement of any asset is one of the best indicators of its market conditions. To understand the market conditions for deciding on the parameter recommendations, it is necessary to analyze the historical price of the assets. We start our analysis with the price graph for each of our suggested collateral assets.

Now, using the above historical price data, we analyze the difference in the log prices of each of the assets, which can give us an idea about the volatility of the asset during the past time period. The graph below shows us the change in the log prices of the collateral assets (AXS, USDC, and WETH) at each of the time points.

The above graph shows that the log returns of WETH and USDC are more volatile than those of AXS when all three are expressed in RON. It can be seen that the highest drop in price observed is around -0.11 and -0.08 for WETH and USDC, respectively, while the highest drop for WETH is also around -0.08. Also, it is to be observed that there are multiple drops near -0.10 for both WETH and USDC, while most of the price drops for AXS are near -0.05.

Asset	Annualized Log Returns (35th Percentile) (in %)	Minimum Price Change Log
USDC	-25.64	-0.0701
WETH	-31.16	-0.0917
AXS	-17.04	-0.0711

Log returns and volatility are fundamental concepts in financial analysis, particularly in understanding asset price movements and risk. Log returns measure the continuously compounded return of an asset, calculated as the natural logarithm of the ratio of consecutive prices. This approach offers advantages over simple returns, including time-additivity and symmetry for positive and negative price changes, making it more suitable for statistical analysis. The percentile analysis helps us to focus more on the scenarios of price drop, which might lead to liquidation of the position.

DEX Liquidity Analysis:

Our DEX liquidity analysis focuses on various trading pairs within Katana DEX (which is currently the only DEX in Ronin Chain), particularly on Collateral/RON Pair liquidity.

For the analysis we haven’t considered any liquidity pool with less than $1k TVL.

WRON	$55.4M
WETH	$31.52M
AXS	$10.5M
USDC	$10.06M

USDC / RON Pair:

Pool	TVL	Volume(24 Hour)	Volume(7 days)
USDC - RON V2	$17.32M	$1.53M	$9.84M
USDC - RON V3	$1.24M	$300.02K	$2.27M
USDC - RON V3	$76.9K	$4.13K	$42.35K

AXS / RON Pair:

Pool	TVL	Volume(24 Hour)	Volume(7 days)
AXS - RON V2	$19.17M	$510.55K	$2.98M
AXS - RON V3	$146.77K	$35.48K	$232.43K
AXS - RON V3	$29.88K	$479.96	$3.42K

WETH / RON Pair:

Pool	TVL	Volume(24 Hour)	Volume(7 days)
WETH - RON V2	$54.73M	$675.08K	$6.99M
WETH - RON V3	$1.58M	$179.33K	$1.67M
WETH - RON V3	$5.56K	$40.67	$479.99

---

Slippage Analysis:

In each of the above scenarios, we observe that the current slippage corresponding to each of the collateral assets in the DEX is significantly lower than the set Liquidation Penalty (LP). This helps us to avoid any extreme scenario of a rise in slippage. Chainrisk recommends a supply cap and LP, as the table below reports.

Asset	Liquidation Penalty (%)	Supply Cap
AXS	20	350,000
WETH	15	1350
USDC	15	1,500,000

AXS:

Trading 350000 AXS (approx. $1.9M) for RON incurs a slippage of around ~-14%.

WETH:

Trading 1350 WETH (approx. $4.4M) for RON incurs a slippage of around ~-10.5%.

USDC:

Trading $1,500,000 USDC (approx. $1.5M) for RON incurs a slippage of around ~-10.4%.

Store Front Price Factor: 70%

The Storefront Price Factor determines the fraction of the liquidation penalty that is allocated to buyers of collateral. The 70% factor is deemed appropriate as it provides a meaningful discount to encourage Liquidation participation while safeguarding the protocol against excessive risk.

Reserve Parameter:-

Target Reserve - 6M RON ($9M)

Target Reserve represents the target amount of reserves of the base token. Target reserves help to determine if the protocol has enough “margin of safety” to not sell absorbed collateral.

Seed Reserve - 30,000 RON ($45K)

Seed reserves are deposited during market creation to mitigate potential bad debt risks. To safeguard against malicious market creation, these reserves should remain locked until the market is deprecated.

---

IR Curve:

Chainrisk recommends the parameters as given below for the RON Market for increased utilization and value addition.

Parameter	Recommended Value
Annual Borrow Interest Rate Base	0.01
Annual Borrow Interest Rate Slope Low	0.054
Borrow Kink	0.7
Annual Borrow Interest Rate Slope High	1.125
Annual Supply Interest Rate Base	0
Annual Supply Interest Rate Slope Low	0.06
Supply Kink	0.7
Annual Supply Interest Rate Slope High	1

Incentive Parameters:

Daily COMP Supply Rewards - 0
Daily COMP Borrow Rewards - 1

At Kink Level:

• Borrow APR: 4.78%
• Supply APR: 4.2%

Given the current COMP price of ~$70 (Dated 31st Jan 2025),

• COMP Borrow Rewards: 0.64%
• COMP Supply Rewards: 0%

This results in the below Net APRs:

Net Borrow APY: 4.14%

Net Supply APY: 4.2%

APR at Different Level of Utilisations:

Utilisation (%)	Net Supply APR (%)	Net Borrow APR (%)
10	0.6	0.9
20	1.2	1.44
30	1.8	1.98
40	2.4	2.52
50	3	3.06
60	3.6	3.6
70	4.2	4.14
80	14.2	15.39
90	24.2	26.64
100	34.2	37.89

---

Analysis of Borrowing Power and Supply Utilisation

As per recent post by RONIN team, there will be two market deployments - RON and WETH market.

Assuming full usage of supply caps and borrowing usage of assets based on recommended collateral factors,

On RON market:

• Total Borrowing Power : $4M
• Base Asset Supply Volume at Optimal Utilisation ( 70% ): $5.7M

On WETH market:

• Total Borrowing Power : $3.7M
• Base Asset Supply Volume at Optimal Utilisation ( 90% ): $4.1M

Based on the analysis of the borrowing power and optimal supply utilization, we recommend an initial seeding of:

• RON Market: $6M
• ETH Market: $4M

---

Regards
Team Chainrisk

[Gauntlet]

[Gauntlet] - Ronin Recommendations

Simple Summary

If the community wishes to deploy on Ronin, we recommend the following initial parameter recommendations for the Ronin v3 USDC, RON and WETH comets:

Risk Parameters

USDC Comet

Asset	Collateral Factor	Liquidation Factor	Liquidation Penalty	Supply Cap
RON	73%	79%	17%	1M RON
WETH	83%	90%	5%	110 WETH
AXS	68%	75%	20%	150K AXS

WETH Comet

Asset	Collateral Factor	Liquidation Factor	Liquidation Penalty	Supply Cap
RON	75%	80%	12%	3M RON
USDC	83%	90%	5%	400K USDC
AXS	70%	75%	20%	300K AXS

RON Comet

Asset	Collateral Factor	Liquidation Factor	Liquidation Penalty	Supply Cap
USDC	75%	80%	12%	500K USDC
WETH	75%	80%	10%	500 WETH
AXS	72%	78%	15%	300K AXS

Rationale

Supply Caps and Liquidation Penalty

WRON DEX TVL across majors

Pool Type	Pool Name	Pool URL	TVL ($M)	24H Volume ($)
Katana	WRON / WETH	Link	41.82	1.17M
Katana	AXS / WRON	Link	13.97	715.7K
Katana	USDC / WRON	Link	13.89	1.85M
Katana-V3	WETH / WRON 0.3%	Link	0.84	181.7K
Katana-V3	USDC / WRON 0.3%	Link	0.84	141.8K

Total DEX TVL : $70.52M

USDC DEX TVL across majors

Pool Type	Pool Name	Pool URL	TVL ($M)	24H Volume ($)
Katana	USDC / WRON	Link	14.08	1.45M
Katana	USDC / WETH	Link	2.74	269K
Katana-V3	USDC / WRON 0.3%	Link	0.86	168.5K
Katana	AXS / USDC	Link	0.04	5.6K

Total DEX TVL : $17.72M

WETH DEX TVL across majors

Pool Type	Pool Name	Pool URL	TVL ($M)	24H Volume ($)
Katana	WRON / WETH	Link	41.75	1.45M
Katana	USDC / WETH	Link	2.74	269K
Katana	AXS / WETH	Link	1.99	68.1K
Katana-V3	WETH / WRON 0.3%	Link	0.85	308.1K

Total DEX TVL : $47.33M

AXS DEX TVL

Pool Type	Pool Name	Pool URL	TVL ($M)	24H Volume ($)
Katana	AXS / WRON	Link	14.12	325.3K
Katana	AXS / WETH	Link	1.99	68.1K
Katana-V3	AXS / WRON 0.3%	Link	0.10	14.2K
Katana	AXS / USDC	Link	0.04	5.6K
Katana-V3	AXS / WRON 1%	Link	0.02	850
Katana-V3	AXS / USDC 1%	Link	0.01	0.24

Total DEV TVL : $16.28M

USDC Comet

Reviewing the liquidity pathways from the collateral assets to USDC, Gauntlet recommends aligning the LP to that of WETH, LINK and UNI on the Mainnet USDC comets.

Asset	Liquidation Penalty
RON	17%
WETH	5%
AXS	20%

Gauntlet recommends setting the supply caps to the levels suggested below for the following assets on USDC Comet:

Asset	Supply Cap
RON	1M
WETH	110
AXS	150K

RON-USDC DEX Slippage

WETH-USDC DEX Slippage

AXS-USDC DEX Slippage

WETH Comet

For WETH Comet, Gauntlet recommends the following Liquidation Penalties:

Asset	Liquidation Penalty
RON	12%
USDC	5%
AXS	20%

Gauntlet recommends setting asset supply caps at the levels suggested below:

Asset	Supply Cap
RON	3M
USDC	400K
AXS	300K

RON-WETH DEX Slippage

USDC-WETH DEX Slippage

AXS-WETH DEX Slippage

RON Comet

For the RON Comet, Gauntlet recommends the below Liquidation Penalties (LP):

Asset	Liquidation Penalty
USDC	12%
WETH	10%
AXS	15%

Gauntlet recommends setting asset supply caps at the following levels:

Asset	Supply Cap
USDC	500K
WETH	500
AXS	200K

USDC-RON DEX Slippage

WETH-RON DEX Slippage

AXS-RON DEX Slippage

Collateral Factors (CF) and Liquidation Factors (LF)

USDC Comet

RON-USDC - Drawdowns and Returns in the past 6 months

AXS-USDC - Drawdowns and returns in the past 6 months

For WETH, Gauntlet recommends aligning the Collateral Factor and Liquidation Factor to that of the Mainnet USDC comet.

Asset	Collateral Factor	Liquidation Factor
RON	73%	79%
WETH	83%	90%
AXS	68%	75%

A 1% delta between the Liquidation Factor and Liquidation Penalty as recommended by ChainRisk is too low as during extremely volatile regimes, liquidations might be inefficient if the price of WETH drops beyond 2% post absorption of collateral. We know:

Liquidation Factor ≤ (1 - Liquidation Penalty) × (1 - x)

A 1.2% price drop between blocks would require the Liquidation Factor to be below 88.9%, with Liquidation Factor of 89%, it is insufficient to liquidate collateral effectively, potentially leading to insolvency.

WETH Comet

RON-WETH - Drawdowns and returns in the past 6 months

AXS-WETH - Drawdowns and returns in the past 6 months

For USDC, Gauntlet recommends aligning the Collateral Factor and Liquidation Factor to that of the Optimism USDC comet:

Asset	Collateral Factor	Liquidation Factor
RON	75%	80%
USDC	83%	90%
AXS	70%	75%

As seen from above, WETH pairs are less volatile and more correlated than USDC pairs and therefore can be more risk-on in terms of CFs and LFs with respect to USDC in terms of supply-borrow distribution unlike the risk recommendations proposed by ChainRisk. Furthermore, the RON-WETH pool is the most liquid pool on Ronin which can imply a lower liquidation penalty compared to RON-USDC pair.

RON Comet

USDC-RON - Drawdowns and returns in the past 6 months

WETH-RON - Drawdowns and returns in the past 6 months

AXS-RON - Drawdowns and returns in the past 6 months

Asset	Collateral Factor	Liquidation Factor
USDC	75%	80%
WETH	75%	80%
AXS	72%	78%

For USDC Comet
Targetted Reserves: 20M USDC
Storefront price factor: 60%
Seed reserves: $50k

For WETH Comet
Targetted Reserves: 5000 WETH
Storefront price factor: 70%
Seed reserves: 25 WETH

For RON Comet
Targeted Reserves: 20M RON
Storefront price factor: 70%
Seed reserves: $50k

IR Curve Parameters

Gauntlet recommends aligning the IR parameters to those comets on Mainnet :

USDC Comet

Recommended Parameter Adjustments

Parameter	Recommended Value
Annual Borrow Interest Rate Base	0.015
Annual Borrow Interest Rate Slope Low	0.05
Borrow Kink	0.9
Annual Borrow Interest Rate Slope High	3.4
Annual Supply Interest Rate Base	0
Annual Supply Interest Rate Slope Low	0.054
Supply Kink	0.9
Annual Supply Interest Rate Slope High	3.034

Utilization vs APRs & Reserve Factor

WETH Comet

Recommended Parameter Adjustments

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

RON Comet

Gauntlet recommends setting the IR curves mirroring those recommended for the S Comet on Sonic:

Parameter	Recommended Value
Annual Borrow Interest Rate Base	0.01
Annual Borrow Interest Rate Slope Low	0.017647
Borrow Kink	0.85
Annual Borrow Interest Rate Slope High	1.5
Annual Supply Interest Rate Base	0
Annual Supply Interest Rate Slope Low	0.0225
Supply Kink	0.85
Annual Supply Interest Rate Slope High	1.339

Utilization vs APRs & Reserve Factor

Incentive Parameters

For USDC Comet

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
2	1

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 $50 at 90% utilization:

• Supply Distribution APR: 4.31%
• Borrow Distribution APR: 2.39%

This results in the following Net APRs:

• Net Supply APR: 9.17%
• Net Borrow APR: 3.61%

For WETH Comet

Daily COMP Supply Rewards	Daily COMP Borrow Rewards
2	1

With the above utilization and the present Interest Rate curve, for WETH comets:

• Supply APR: 1.94%
• Borrow APR: 2.4%

Given the current COMP price of $50 at 90% utilization:

• Supply Distribution APR: 1.8%
• Borrow Distribution APR: 1%

This results in the following Net APRs:

• Net Supply APR: 3.74%
• Net Borrow APR: 1.4%

For RON Comet

Daily COMP Supply Rewards	Daily COMP Borrow Rewards
1	0

With the above utilization and the present Interest Rate curve :

• Supply APR: 1.94%
• Borrow APR: 2.5%

Given the current COMP price of $50 at 90% utilization:

• Supply Distribution APR: 1.85%
• Borrow Distribution APR: 0%

This results in the following Net APRs:

• Net Supply APR: 3.76%
• Net Borrow APR: 2.5%

[dmitriywoofsoftware]

Along with OpenZeppelin, we decided to explore a new format for delivering reports.

Here you can find the deliverables for the WETH Ronin market.

dmitriy-woof-software

[jbass-oz]

Proposal 414 Review

OpenZeppelin reviewed Proposal 414 and identified a potential issue that may put protocol funds at risk. OpenZeppelin recommends cancelling the proposal and implementing additional validations before resubmitting to governance. The full report is available for your review.

Proposal 414 Review

Summary Timeline: From 2025-03-10 To 2025-03-10 Total Issues: 1 (0 resolved) High Severity Issues: 1 (0 resolved) Scope OpenZeppelin has reviewed Compound Governance Proposal #414, submitted by FranklinDAO. The proposal aims to initialize a Compound WETH Market on the Ronin network. No migration enactment calldata was available for comparison as the workflow simulation did not successfully complete at the time of the migration review. In addition, when evaluating the state of the netwo…

[dmitriywoofsoftware]

Thanks for the reporting. FranklinDAO has been notified to cancel the proposal. It should be canceled today.

However, I would like to highlight that the scope was audited twice and the issue was not highlighted before. I would like to ask OpenZeppelin to attach the latest report you provided to us to prove that we haven’t pushed the proposal with vulnerability. Thanks.

[dmitriywoofsoftware]

Add cWRONv3 on Ronin

Proposal - Tally | Compound | Initialize cWRONv3 on Ronin
PR - Add cWRONv3 on Ronin by MishaShWoof · Pull Request #978 · compound-finance/comet · GitHub

Actions

1. Run Slither. Fails. . Add cWRONv3 on Ronin · woof-software/comet@ec5ada0 · GitHub
2. Forge test. Success. Add cWRONv3 on Ronin · woof-software/comet@ec5ada0 · GitHub
3. Gas Profiler. Success. Add cWRONv3 on Ronin · woof-software/comet@ec5ada0 · GitHub
4. Scan. Success. Add cWRONv3 on Ronin · woof-software/comet@ec5ada0 · GitHub
5. ronin-wron Scenario. Success. Add cWRONv3 on Ronin · woof-software/comet@ec5ada0 · GitHub
6. Unit tests. Success. Add cWRONv3 on Ronin · woof-software/comet@ec5ada0 · GitHub
7. Eslint. Success. Add cWRONv3 on Ronin · woof-software/comet@ec5ada0 · GitHub
8. Contract linter. Success. Add cWRONv3 on Ronin · woof-software/comet@ec5ada0 · GitHub
9. Deploy. Success. Deploy Market · woof-software/comet@6635463 · GitHub
10. Enact migration. Successful, but shown as failed Enact Migration · woof-software/comet@ec5ada0 · GitHub

Initialize cWRONv3 on Ronin\n\n

Proposal summary\n\n

Compound Growth Program [AlphaGrowth] proposes deployment of Compound III to Ronin network. This proposal takes the governance steps recommended and necessary to initialize a Compound III WRON market on Ronin; upon execution, cWRONv3 will be ready for use. Simulations have confirmed the market’s readiness, as much as possible, using the [Comet scenario suite] (comet/scenario at main · compound-finance/comet · GitHub). The new parameters include setting the risk parameters based off of the recommendations from Gauntlet.\n\n

Further detailed information can be found on the corresponding deployment pull request, deploy market GitHub action run and forum discussion.\n\n\n

Rewards\n\n

Gauntlet provided recommendations for COMP rewards, however, the COMP token is not whitelisted on CCIP. When the COMP token is whitelisted, we will create a proposal to bridge COMP tokens and set up speeds.\n\n

Proposal Actions\n\n

The first proposal action bridges ETH using roninl1NativeBridge. Bridged ETH will be converted to WETH automatically and swapped for WRON in order to seed the reserves.\n\n

The second proposal action approves and swaps received WETH for WRON via native Katana exchange router. We allocate 20% of the slippage due to WETH and RON volatility at the moment of proposal execution (in 8 days from the proposal published on-chain). Swap should not be snipped because MEV infrastructure has not been developed on Ronin yet. The dynamic mechanism to prevent such slippage will be cost inefficient due to development and audit resource allocation. \n\n

The third proposal action sets the Comet configuration and deploys a new Comet implementation on Ronin. This sends the encoded setConfiguration and deployAndUpgradeTo calls across the l1CCIPRouter to the bridge receiver on Ronin. \n\n

The fourth action updates the ENS TXT record v3-official-markets on v3-additional-grants.compound-community-licenses.eth, updating the official markets JSON to include the new Ronin cWRONv3 market.