Launch USDT Market on Compound v3 Ethereum


We would like to propose on addition of USD Tether (USDT) to Compound V3.


USDT is one of the most popular markets in Compound V2. It is the third largest Market on Compound V2 in terms of total earnings and is the largest V2 market in terms of total borrowing. Adding USDT to V3 would provide the Compound community an attractive market for borrowing and lending. Moreover, this history of demand for USDT on Compound and other protocols, makes it a desirable asset to be listed on the platform.

USDT is also one of the most widely used stablecoins in the industry. With Marketcap of $95Billion it is the third largest coin in terms of Marketcap.

Proposed Collateral

We propose adding the following assets as collaterals for the USDT market

  • wstETH
  • ETH
  • WBTC
  • COMP
  • USDC

We invite the community to suggest and give inputs for any other collateral assets.

Relevant Documents and Links





V2 USDT Market Stats: Link

Next Steps

Franklin DAO has received a grant from the Compound Grants Program to deliver the technical implementation of this market.

We invite the community to consider this application for listing the USDT market and welcome suggestions in this direction.

Additionally, we look forward to the community to suggest

  • Collateral Factor
  • Reserve Factor
  • Borrowing Limit

We recently updated the proposal to include wstETH as a suggested collateral.


Excited to help push this initiative as part of the Growth Plan:


Clarifying that the Milestone 1 from CGP has been met with this proposal posted on the forum. And Milestone 2 will be funded should the community vote in favour.

CGP wants to ensure alignment and transparency with the community.


Ethereum v3 USDT Initial Asset Listing Recommendations

Simple Summary

Gauntlet is excited for the community to expand Compound III into USDT. We recommend the following initial parameter recommendations for the Ethereum v3 USDT comet.

Risk Parameters

Asset Collateral Factor Liquidation Factor Liquidation Penalty Supply Cap
WETH 83% 90% 5% 500,000 ($1.32B)
WBTC 80% 85% 5% 18,000 ($892M)
COMP 65% 70% 25% 100,000 ($5.8M)
wstETH 80% 85% 5% 9,000 ($30M)
UNI 75% 81% 15% 3,000,000 ($23M)
LINK 79% 85% 7% 2,000,000 ($40M)

Gauntlet provided parameter recommendations for assets listed on Ethereum v3’s USDC Comet and included wstETH, as requested in the initial proposal. We excluded USDC from our initial recommendation due to uncertainties about the market value of incorporating a fiat-backed stablecoin into the USDT Comet market. Gauntlet will provide a recommendation if the community wants to move forward with adding USDC to the Comet as collateral.

Storefront Price Factor: 60%

Gauntlet recommends keeping the storefront price factor at the same value as the Ethereum v3 USDC Comet.

Target Reserves: 20,000,000

After Gauntlet’s forum post analyzing Target Reserves, Gauntlet recommends increasing the Target Reserves for this market based on historical reserve growth and our recent recommendation to increase Ethereum USDC Comet’s Target Reserves.

IR Curve Parameters

IR Parameter Value
borrow per year interest rate base 0.015
borrow per year interest rate slope low 0.061
borrow kink 0.90
borrow per year interest rate slope high 3.2
supply per year interest rate base 0
supply per year interest rate slope low 0.059
supply kink 0.90
supply per year interest rate slope high 2.9

The chart above demonstrates that the generation of Comet USDT reserves will be positive when utilization exceeds 72%.

Incentive Parameters

Daily COMP Supply Rewards Daily COMP Borrow Rewards
70 50

Our COMP rewards recommendations are designed to offer appealing distribution APRs when the comet is first launched. We are incentivizing supplies and borrows to incentivize the rapid ramp-up of TVL and the high utilization of USDT. The Daily COMP rewards are subject to change as TVL rises and the markets evolve.

Here’s an update on the current COMP rewards structure in Ethereum v3 USDT:

  • Daily COMP Supply Rewards: 70 COMP
  • Daily COMP Borrow Rewards: 50 COMP

The chart above illustrates the Distribution Annual Percentage Rates (APRs) across various supply levels, assuming a 90% utilization rate. It’s noteworthy that APRs exceeding 2% will persist until the market’s supply reaches $100M. These incentive distributions are strategically designed to accelerate the Comet’s growth on the ETH mainnet, which boasts a circulating supply of 45B USDT.

Next Steps

We welcome community feedback.