Simple Summary
Gauntlet recommends the following risk parameter updates for the Optimism v3 USDC comet:
- Increase WBTC Liquidation Penalty from 5% to 10%
- Increase WBTC Supply Cap from 60 to 120
- Increase OP Supply Cap from 700,000 to 1,400,000
Analysis
WBTC Risk Recommendation
The WBTC supply cap usage is currently over 80%, leaving only $700,000 in remaining capacity. Gauntlet recommends increasing the supply cap to enhance borrowing power within the USDC Comet.
Link to the chart
The largest position has a supply of $1.27m of WBTC with a health factor of 1.38.
Top WBTC Supply Positions
Current liquidity on the OP chain supports swapping 37 WBTC ($2.46 million) to USDC with approximately 9.9% slippage. With the overall supply cap set to double, Gauntlet recommends increasing the liquidation penalty to 10% to ensure healthy liquidations of WBTC within the OP Comet.
OP Risk Recommendation
OP Supply Cap usage has been trending higher since the Comet was initialized. With the supply usage at 60%, the remaining liquidity capacity within the OP market is $705k. In order to make the market more attractive for larger borrowers with OP, Gauntlet recommends increasing the supply cap to 1.4M.
OP supply cap usage has been trending higher since the Comet was launched. With the supply usage at 60%, the remaining liquidity capacity within the OP market is $705,000. To make the market more attractive for larger OP borrowers, Gauntlet recommends increasing the supply cap to 1.4M OP ($3.4M).
Link to the chart
As shown below, the top 2 collateralized OP positions total around $890k and can be safely liquidated if they were to double the size of their position.
Top OP Supply Positions
Next Step
- Target on-chain vote next week