Simple Summary
In response to recent growth in the Ethereum Compound v3 USDC comet, Gauntlet recommends the following risk parameter changes to allow further protocol usage and growth:
- Increase WETH supply cap from 350k tokens (~$669M) to 500k tokens (~$956M)
- Increase WBTC supply cap from 12k tokens (~$361M) to 18k tokens (~$542M)
- Increase UNI supply cap from 2.3M tokens (~$13.6M) to 6M tokens (~$35.5M)
- Increase LINK supply cap from 1.25M tokens (~$9.0M) to 4M tokens (~$28.9M)
These changes will:
- Decrease WETH supply cap utilization from 60.7% to 42.5%
- Decrease WBTC supply cap utilization from 77.2% to 51.4%
- Decrease UNI supply cap utilization from 100% to 38.3%
- Decrease LINK supply cap utilization from 92.0% to 28.7%
Analysis
WETH
The $669M supply cap for WETH has recently reached 60.7%, as seen in our dashboard.
Below are details of the top WETH suppliers:
Top 10 WETH suppliers and percentage of total WETH supplies:
Top 10 entire supply positions for top WETH suppliers:
Top 10 USDC borrow positions for top WETH suppliers:
Top 10 WETH suppliers and borrow usages:
Currently, $263M additional WETH can be supplied to the comet, greater than any current user’s WETH supply position. Given the demand for WETH supply and the high liquidity & low volatility of WETH/ETH, Gauntlet recommends increasing the WETH supply cap from 350k tokens (~$669M) to 500k tokens (~$956M). This change will decrease WETH supply cap utilization from 60.7% to 42.5%, resulting in $550M additional WETH able to be supplied, to allow further long-term protocol usage and growth.
WBTC
The $361M supply cap for WBTC has recently reached 77.2%, as seen in our dashboard.
Below are details of the top WBTC suppliers:
Top 10 WBTC suppliers and percentage of total WBTC supplies:
Top 10 entire supply positions for top WBTC suppliers:
Top 10 USDC borrow positions for top WBTC suppliers:
Top 10 WBTC suppliers and borrow usages:
Currently, $82M additional WBTC can be supplied to the comet, greater than any current user’s WBTC supply position. Given the demand for WBTC supply and the high liquidity & low volatility of BTC, Gauntlet recommends increasing the WBTC supply cap from 12k tokens (~$361M) to 18k tokens (~$542M). This change will decrease WBTC supply cap utilization from 77.2% to 51.4%, resulting in $263M additional WBTC able to be supplied, to allow further long-term protocol usage and growth.
UNI
The $13.6M supply cap for UNI has recently reached 100%, as seen in our dashboard.
Below are details of the top UNI suppliers:
Top 10 UNI suppliers and percentage of total UNI supplies:
Top 10 entire supply positions for top UNI suppliers:
Top 10 USDC borrow positions for top UNI suppliers:
Top 10 UNI suppliers and borrow usages:
Currently, $0M additional UNI can be supplied to the comet. Given the recent daily volume for UNI, Gauntlet recommends increasing the UNI supply cap from 2.3M tokens (~$13.6M) to 6M tokens (~$35.5M) This change will decrease UNI supply cap utilization from 100% to 38.3%, resulting in $21.9M additional UNI able to be supplied.
LINK
The $9.0M supply cap for LINK has recently reached 92%, as seen in our dashboard.
Top 10 LINK suppliers and percentage of total LINK supplies:
Top 10 entire supply positions for top LINK suppliers:
Top 10 USDC borrow positions for top LINK suppliers:
Top 10 LINK suppliers and borrow usages:
Currently, $0.7M additional LINK can be supplied to the comet. Given the recent daily volume for LINK, Gauntlet recommends increasing the LINK supply cap from 1.25M tokens (~$9.0M) to 4M tokens (~$28.9M). This change will decrease LINK supply cap utilization from 92.0% to 28.7%, resulting in $20.6M additional LINK able to be supplied.
Next Steps
- Target on-chain vote 7/24/23