March 2023
Summary
Sharing a recap of Gauntlet’s market risk management work with Compound in March 2023. See below for this past month’s work summary and a preview of what’s coming up.
| Category | Work Completed | Commmentary |
|---|---|---|
| Quantitative Research |
Continued research on V3 Migration Parameter recommendations for Compound V3 USDC Comet on Optimism |
Gauntlet has conducted quantitative research on risk management for non-ETH chains and has provided initial parameter recommendations for the USDC Comet on both Polygon and Optimism to support Compound’s multi-chain strategy. |
| Recommendations |
Compound V3 wETH recommendations Compound V2 recommendations to adjust CF and deprecate legacy assets |
Daily risk simulations and stress tests |
| Risk Modeling |
USDC volatility firefighting, including risk modeling on USDC volatility’s impact on all Compound markets and risk mitigation recommendations Initial parameter recommendations on Compound V3 USDC Comet on Optimism, including supply cap, CF, LCF, LF, and Interest Rate Curves Phase 2 of Compound Migration Plan from V2 to V3 - after the community has aligned on their preference, Gauntlet has published a proposal for migrating users from V2 to V3. The proposal has been approved and passed by the community. |
Risk modeling to provide insight into new market launches for Compound as well as protocol-wide initiatives |
| Feature Upgrades | Launched wETH Comet risk dashboard Released version 2 of Gauntlet’s risk dashboard in Beta including updated analytics Daily simulation and risk modeling of USDC Comet on Polygon (dashboard to release soon) |
Upgrades to Gauntlet’s product suite |
| Risk Alerts | Continued market updates from our alerting platform |
Risk monitoring and alerting is part of Gauntlet’s market risk management offfering |
Highlights
- Firefighting when USDC lost its equivalence to the dollar. Provided risk modeling to inform risk mitigation recommendations and triggers while communicating closely with Compound Guardian and community. Importantly, the Compound protocol achieved 0 new insolvencies during this unique tail market event.
- Released version 2 of Gauntlet’s risk dashboard in Beta, including updated analytics. We will continue to iterate on the dashboards to support Compound’s cross-chain strategy.
- Published updated detailed migration plan phase 2 from V2 to V3 following the community’s preference. The migration plan includes parameter changes on V2 as well as V3 USDC Comet.
- Provide initial risk parameterization analysis for the launch of Compound V3 USDC Comet on Optimism to support Compound’s multi-chain strategy.
- Ongoing daily simulation analyses and stress tests of Compound V2, Compound V3 USDC Comet on ETH, Compound V3 wETH Comet, and Compound V3 USDC Comet on Polygon.
Upcoming Selected Work
- Conduct market risk analysis to support Compound’s launch on Arbitrum.
- Launch Risk Dashboard for Compound V3 USDC Comet on Polygon with both simulation and cross-chain analytics.
We are happy to answer any questions or hear any feedback from the community.