Simple Summary
Gauntlet recommends the following supply cap and interest rate recommendations to the protocol:
Supply Caps
| Comet | Asset | Supply Cap |
|---|---|---|
| Scroll USDC | WETH | 60→0 |
| Scroll USDC | wstETH | 4→0 |
Interest Rate Curve Parameters
| Parameter | Current Value | Recommended Value |
|---|---|---|
| Annual Borrow Interest Rate Base | 0.015 | 0.1 |
| Annual Borrow Interest Rate Slope Low | 0.0944444 | 0.0 |
| Borrow Kink | 0.9 | 0.85 |
| Annual Borrow Interest Rate Slope High | 3.6 | 3.6 |
| Annual Supply Interest Rate Base | 0.0 | 0.0 |
| Annual Supply Interest Rate Slope Low | 0.036 | 0.09839 |
| Supply Kink | 0.9 | 0.85 |
| Annual Supply Interest Rate Slope High | 3.196 | 3.21769 |
Rationale
Supply Cap Recommendations
- Setting supply caps to 0 prevents new suppliers from entering the market.
Interest Rate Curve Recommendations
The proposed updates include:
- Reducing the kink from 90% to 85%.
- Increased borrow base APY, reduced borrow APY slope low, and increases in both supply APY slopes. These changes stabilize reserve growth across utilization levels.
These changes aim to disincentivize TVL inflows and accelerate the market’s deprecation.
Next Steps
- We welcome community feedback.