Simple Summary
Gauntlet recommends the following adjustments to COMP incentives across comets. These adjustments are intended to encourage optimal utilization, lead to interest rate discovery, and optimize COMP spend across the protocol.
| Comet | Daily Borrow Incentive(in COMP) | Daily Supply Incentive(in COMP) |
|---|---|---|
| Arbitrum USDC | 15→10 | 20→14 |
| Arbitrum USDT | 15→11 | 15→11 |
| Arbitrum WETH | 5→2 | 3→1 |
| Base AERO | 8→4 | 3→1 |
| Base USDC | 7→4 | 13→9 |
| Base USDS | 12→9 | 24→15 |
| Base WETH | 2→1 | 2→1 |
| Ethereum USDC | 71→55 | 70→55 |
| Ethereum USDS | 5→2 | 12.5→9 |
| Ethereum USDT | 50→30 | 70→30 |
| Etherem WETH | 20→10 | 10→5 |
| Mantle USDe | 4→3 | 4→2 |
| Optimism USDC | 4→2 | 2.5→1 |
| Optimism USDT | 5→2 | 5→1 |
Current spend is 522 COMP per day. We recommend reducing that by 177 COMP for a daily spend of 345 COMP. With the current COMP price at $29.45, this equates to $1.9M in emissions saved annually.
Rationale
Our aim in making these adjustments is to reduce Compounds’ incentive spend across markets while providing market-specific recommendations intended to optimize market utilization and competitiveness.
Arbitrum USDC
This comet is currently experiencing lower-than-optimal utilization, while slightly over-incentivizing supply. We recommend reducing the daily borrow incentive from 15 to 10 COMP and the daily supply incentive from 20 to 14 COMP. This should push utilization towards the kink and decrease overall spend. This change will result in an $118.2k annual reduction in COMP emissions.
Arbitrum USDT
This comet is at optimal utilization. We recommend reducing both the daily borrow and supply incentives from 15 to 11 COMP. This change will result in an $86k annual reduction in COMP emissions.
Arbitrum WETH
This comet is past optimum utilization due to incentivized borrowing. We recommend reducing the daily borrow incentive from 5 to 2 COMP and the daily supply incentive from 3 to 1 COMP. This change will result in a $53.7k annual reduction in COMP emissions.
Base AERO
This comet is experiencing lower-than-optimal utilization while over-incentivizing supply. We recommend reducing the daily borrow incentive from 8 to 4 COMP and the daily supply incentive from 3 to 1 COMP. This change will result in a $75.2k annual reduction in COMP emissions.
Base USDC
This comet is near optimal utilization. We still recommend cuts to both supply and borrow, slightly weighted higher towards supply. We recommend reducing the daily borrow incentive from 7 to 4 COMP and the daily supply incentive from 13 to 9 COMP. This change will result in a $75.2k annual reduction in COMP emissions.
Base USDS
This comet is also experiencing lower-than-optimal utilization, while significantly over-incentivizing supply. We recommend reducing the daily borrow incentive from 12 to 9 COMP and the daily supply incentive from 24 to 15 COMP. This change will result in a $129k annual reduction in COMP emissions.
Base WETH
This comet is also experiencing lower-than-optimal utilization and we recommend slight cuts to both supply and borrow incentives. We recommend reducing both daily supply and borrow incentives from 2 to 1 COMP. This change will result in a $21.5k annual reduction in COMP emissions.
Ethereum USDC
This comet is at optimal utilization, and we recommend even cuts to both supply and borrow incentives. We recommend reducing the daily borrow incentive from 71 to 55 COMP and the daily supply incentive from 70 to 55 COMP. This change will result in a $333.2k annual reduction in COMP emissions.
Ethereum USDS
This comet is at optimal utilization, while slightly over-incentivizing supply. We recommend reducing the daily borrow incentive from 5 to 2 COMP and the daily supply incentive from 12.5 to 9 COMP. This change will result in a $69.9k annual reduction in COMP emissions.
Ethereum USDT
This comet is at optimal utilization, while over-incentivizing supply. We recommend reducing the daily borrow incentive from 50 to 30 COMP and the daily supply incentive from 70 to 55 COMP. This change will result in a $376.2K annual reduction in COMP emissions.
Ethereum WETH
This comet is experiencing near optimal utilization while slightly over-incentivizing borrowers. We recommend reducing the daily borrow incentive from 20 to 10 COMP and the daily supply incentive from 10 to 5 COMP. This change will result in a $161.2k annual reduction in COMP emissions.
Mantle USDe
This comet is experiencing lower-than-optimal utilization, while slightly over-incentivizing supply. We recommend reducing the daily borrow incentive from 4 to 3 COMP and the daily supply incentive from 4 to 2 COMP. This change will result in a $32.3k annual reduction in COMP emissions.
Optimism USDC
This comet is near optimal utilization, and we recommend even cuts to both supply and borrow incentives. We recommend reducing the daily borrow incentive from 4 to 2 COMP and the daily supply incentive from 2.5 to 1 COMP. This change will result in a $37.6k annual reduction in COMP emissions.
Optimism USDT
This comet is experiencing lower-than-optimal utilization, while slightly over-incentivizing supply. We recommend reducing the daily borrow incentive from 5 to 2 COMP and the daily supply incentive from 5 to 1 COMP. This change will result in a $75.2k annual reduction in COMP emissions.
