[Gauntlet] - Unichain Recommendations
Simple Summary
If the community wishes to deploy on Unichain, we recommend the following initial parameter recommendations for the Unichain v3 USDC comet below.
Furthermore, we recommend postponing the deployment of the WETH Comet due to the current lack of verified token instances on Unichain. Gauntlet will provide recommendations as soon as contract addresses for LSTs and LRTs are deployed and verified.
Gauntlet will monitor markets to follow-up with further recommendations for supply caps, COMP rewards, new assets and comets.
Risk Parameters
USDC Comet
| Asset | Collateral Factor | Liquidation Factor | Liquidation Penalty | Supply Cap |
|---|---|---|---|---|
| UNI | 68% | 74% | 17% | 7000 UNI |
| WETH | 83% | 90% | 5% | 50 WETH |
Rationale
Supply Caps and Liquidation Penalty
USDC Comet
Reviewing the liquidity pathways from the collateral assets to USDC, Gauntlet recommends aligning the LP to that of WETH, and UNI on the Mainnet USDC comets.
| Asset | Liquidation Penalty |
|---|---|
| WETH | 5% |
| UNI | 17% |
Gauntlet recommends setting the supply caps to the levels suggested below for the following assets on USDC Comet:
| Asset | Supply Cap |
|---|---|
| WETH | 50 |
| UNI | 7000 |
WETH-USDC DEX Slippage
UNI-USDC DEX Slippage
Collateral Factors (CF) and Liquidation Factors (LF)
USDC Comet
Gauntlet recommends aligning the Collateral Factor and Liquidation Factor to those set on Mainnet USDC comets for both WETH and UNI.
| Asset | Collateral Factor | Liquidation Factor |
|---|---|---|
| WETH | 83% | 90% |
| UNI | 68% | 74% |
For USDC Comet
Targetted Reserves: 20M USDC
Storefront price factor: 60%
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
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 |
|---|---|
| 1 | 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: 22.8%
- Borrow Distribution APR: 25.34%
This results in the following Net APRs:
- Net Supply APR: 27.66%
- Net Borrow APR: -19.34%