Simple Summary
Gauntlet recommended updating the Interest Rate (IR) Curve in the Ethereum v3 WETH comet in preparation of adding LRTs to the WETH Comet. The adjustments were recommended in previous asset listings for rsETH and weETH but we are sharing this with the community again:
| Parameter | Current | Recommended |
|---|---|---|
| Annual Borrow Interest Rate Base | 0.01 | 0.01 |
| Annual Borrow Interest Rate Slope Low | 0.014 | 0.014 |
| Borrow Kink | 0.85 | 0.85 |
| Annual Borrow Interest Rate Slope High | 0.53 | 1.15 |
| Annual Supply Interest Rate Base | 0 | 0 |
| Annual Supply Interest Rate Slope Low | 0.0185 | 0.0185 |
| Supply Kink | 0.85 | 0.85 |
| Annual Supply Interest Rate Slope High | 0.45 | 1 |
Analysis
We are updating our IR Curve recommendations to incorporate a higher Slope2 rate, with LRTs listed within the Comet. This has been covered within our asset listing recommendations for weETH and rsETH.
Current vs Recommended IR Curves
We recommend maintaining the lower Slope1 curve while keeping a higher Slope2 max rate in preparation for LRT → WETH borrowing demand.
Next Steps
- Woof team has included the recommendation to weETH and rsETH governance proposal.
Amended initial forum post to account for IR param recommendations being within the Governance proposal