[Gauntlet] Ethereum V3 WETH Comet IR Curve Recommendation - (2024-06-23)

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