Simple Summary
Gauntlet recommends the following risk parameter changes for the Ethereum Compound v3 USDC comet:
- Increase UNI supply cap from 2.3M tokens (~$12.7M) to 6M tokens (~$33M)
This change will decrease UNI supply cap utilization from 98% to 38%.
Analysis
UNI
Supply cap for UNI has recently reached 98%, 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:
Gauntlet’s supply cap methodology incorporates factors including circulating supply, daily volume, and CEX & DEX liquidity.
The daily volume for UNI is currently limiting factor for increasing UNI supply cap. Currently, the UNI daily volume is ~$100M. Our methodology recommends setting a max supply cap at 50% of daily volume ($50M). However, so as not to add unnecessary risk to the protocol, and incorporating the fact that volume can decrease in the future, we recommend setting a UNI supply cap of 6M tokens (~$33M), which will decrease supply cap utilization to 38%. If the supply cap utilization continues to increase, we will then reassess further increasing the cap.
COMP
Supply cap for COMP is also very close to being maxed out at 98% utilization (~$50M total), as seen in our dashboard. Currently we do not recommend increasing COMP supply cap.
Below are details of the top COMP suppliers:
Top 10 COMP suppliers and percentage of total COMP supplies:
Top 10 entire supply positions for top COMP suppliers:
Top 10 USDC borrow positions for top COMP suppliers:
Top 10 COMP suppliers and borrow usages:
The daily volume for COMP is currently the limiting factor for increasing UNI supply cap. Although COMP daily volume has been higher recently, the volume on 7/2/23 was is ~$80M. Our methodology would then recommend setting a max supply cap at $40M. Therefore we recommend not increasing the current $50M supply cap.
Next Steps
- Publish On-Chain Proposal