Set WBTC Collateral Factor to 60%

2nd Autonomous Proposal: This change increases the Collateral Factor of WBTC from 40% to 60%.

On July 14th, proposal 16 was passed to raise WBTC’s Collateral Factor from 0% to 40%. According to Defi Pulse, on July 14th there were ~$100M of WBTC in circulation. Today there are ~$900M of WBTC in circulation. In addition to having a much larger supply today, WBTC liquidity has significantly grown since proposal 16 was passed. Uniswap.info shows WBTC on July 14th with a total liquidity of ~$1.15M while today it has ~$230M.

With this starkly increased liquidity and demand, it makes sense to increase the WBTC collateral factor. Even with this proposed increase to 60%, the WBTC collateral factor would still be significantly under that of DAI, USDC, and ETH, which are each 75%.

We agree with the arguments from proposal 16 that this change would help diversify the set of assets available to borrow on Compound. Now that WBTC has proven itself as a useful asset on Compound, passing this proposal would be a significant improvement to the Compound ecosystem.

In order for the autonomous proposal to become a full-fledged proposal, it needs to reach 100K votes. Please delegate your votes by visiting app.compound.finance/vote and delagating your COMP to 0xdb9f80f513a3bd5ae7408484e679a1d86eee1580

2 Likes

WBTC has become much more liquid and stable over the past few months. MakerDAO currently has around 80M DAI generated from WBTC, so there’s clearly strong borrowing demand.

My only reservation is this proposal increases risk of Compound’s collateral before a clear plan has emerged to insure depositors.