Simple Summary
Gauntlet recommends updating the IR Curves in USDC comets to further incentivize utilization past the kink and improve rates.
Specification
| Parameter | Current | Recommended |
|---|---|---|
| Annual Supply Interest Rate Base | 0.0 | 0.0 |
| Annual Supply Interest Rate Slope Low | 0.075 | 0.0712 |
| Supply Kink | 0.9 | 0.9 |
| Annual Supply Interest Rate Slope High | 3.6 | 3.875 |
| Annual Borrow Interest Rate Base | 0.015 | 0.015 |
| Annual Borrow Interest Rate Slope Low | 0.0833 | 0.0722 |
| Borrow Kink | 0.9 | 0.9 |
| Annual Borrow Interest Rate Slope High | 4.3 | 4.3 |
Analysis
The recommended IR Curve decrease the implied reserve factor close to the kink, thereby offering more appealing rates. Additionally, lowering the Borrow APR at the kink from 9% to 8% will further incentivize utilization at or slightly above the kink, also resulting in more efficient rates.
Next Steps
- Target on-chain vote 6/3/24.