# Summary

Gauntlet recommends updating the IR Curves for all stablecoin comets to lower the borrow APR at the kink from 6% to 4.5% to incentivize higher utilization.

# Specification

Parameter | Current Value | Recommended Value |
---|---|---|

Annual Borrow Interest Rate Base | .015 | .015 |

Annual Borrow Interest Rate Slope Low | .05 | .0333 |

Borrow Kink | .9 | .9 |

Annual Borrow Interest Rate Slope High | 4.0 | 4.0 |

Annual Supply Interest Rate Base | 0 | 0 |

Annual Supply Interest Rate Slope Low | .052 | .039 |

Supply Kink | .9 | .9 |

Annual Supply Interest Rate Slope High | 3.6 | 3.6 |

# Analysis

Utilization in many stablecoin comets has remained below the kink. To address this, we recommend updating the IR Curve to lower the borrow APR at the kink from 6% to 4.5%. The recommended interest rate curve and implied reserve factor are shown below.

At the 90% kink, the Borrow APR is 4.50% and the Supply APR is 3.51%.

# Next Steps

- Target on-chain proposal 8/22/24