Update cCOMP Parameters (Borrow Cap and Interest Rate Model)

Ok last update on the proposal implementation before I put it up on chain!

The interest rate model currently in use for cUNI (0xd88B94128Ff2B8Cf2d7886cd1C1E46757418cA2A) is not used by any other markets, and has a somewhat higher path of interest rates compared with the cCOMP rate model (0xd956188795ca6F4A74092ddca33E0Ea4cA3a1395) which is also used across AAVE/MKR/YFI/SUSHI markets. While higher rates for cUNI were initially warranted to avoid unsafe utilization, it now makes sense to move the cUNI market over to match other defi tokens. On the other hand, cCOMP’s capped borrowing capacity makes it more suitable to switch to a higher rate model such as the one currently in use for cUNI.

The most expedient and simplest way to effect this is to move cUNI to the prevailing defi token interest rate model currently used for AAVE/MKR/YFI/SUSHI, and then move cCOMP to the rate model previously used by cUNI.

If the COMP market reaches the newly increased borrow cap despite the higher interest rate model, then further changes to the rate model or borrow cap can be submitted to alleviate excessive utilization and allow the market to reach equilibrium based on cost.

Impacts in Current Market Conditions:

cUNI

At current utilization of 8.75%, borrow and supply rates would decline from 6.5% and 0.42% to 5.1% and 0.32% respectively. Reserve accrual would decline by ~22% ($9,800/year) assuming no change in utilization.

cCOMP

At current utilization of 15.7%, borrow and supply rates would increase from 7.1% and 0.82% to 9.8% and 1.1% respectively. If borrowing volume increased from current 90,750 to the new cap of 150,000 without any change in COMP supplied, this would push utilization up to ~25.7%, with corresponding borrow and supply rates of 14.5% and 2.6%.

With LP rewards on Balancer/Aura continuing to exceed these projected borrow rates, there is decent likelihood of the new cap being reached.

On Chain Actions:

Sorry for the twists and turns getting this proposal into a finalized state! :smiley:

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