Risk Parameter Updates 2021-11-30

Simple Summary

A proposal to adjust three (3) total parameters across three (3) Compound assets.


This proposal is a batch update of risk parameters to align with the Moderate risk level chosen by the Compound community. These parameter updates are the fourth of Gauntlet’s regular parameter recommendations as part of Dynamic Risk Parameters.


This set of parameter updates seeks to level set assets to a Moderate risk level of the protocol while making risk trade-offs between specific assets. Note that some are different from the original risk level consensus check as market conditions have changed.


As shown on our dashboard, these changes will slightly increase Value at Risk, but the corresponding increase in borrow usage is substantial.

Parameter Current Value Recommended Value
WBTC Collateral Factor 65% 70%
UNI Collateral Factor 60% 70%
COMP Collateral Factor 60% 65%

The increase in reserves as a result of these increases in CFs is $413k, broken down as follows:

Results are calculated using the below user behavior assumptions in response to the CF updates. We would note that we are monitoring actual on-chain elasticity and comparing it to these assumptions.


Gauntlet has launched the Compound Risk Dashboard. The community should use the Dashboard to better understand the updated parameter suggestions and general market risk in Compound.

As shown below, this set of parameter updates will slightly increase VaR, but meaningfully increase borrow usage.

Next Steps

While Gauntlet expects to initiate a governance proposal for this set of parameter recommendations today, we will cancel the vote should changes in our daily simulations dictate it necessary.

This goal of this parameter update was to enact the following the collateral factor changes:
However, it appears that the update for WBTC only changed the legacy WBTC and did not change the active WBTC collateral factor.

I have not examined any code myself, but DefiSaver is reading the same collateral factors as compound.finance
It is highly concerning for me that code is being pushed through with bugs that are simply typos. On top of that, every single high level “investor” is voting for these proposals. I suggest we pause the Guantlet updates until it can be shown that there is a process in place to make sure that Guantlet is actually doing their job correctly and that they will not make a mistake in the future that may compromise user funds.

Thanks eggbagels - we also caught this but knew that this collateral factor increase to the legacy WBTC pool would not impact users in any negative way whatsoever. We would also note that the pool is frozen (no new borrows or mints). Our next set of recommendations will increase collateral factors for WBTC2.