[Gauntlet] - VVV Recommendations
Summary
Gauntlet does NOT currently recommend the onboarding of VVV as collateral in Moonwell’s Core lending markets on Base at this time. This recommendation is based on an evaluation of key risk factors, including liquidity, market depth, volatility, and broader asset suitability for the protocol.
A thorough risk assessment indicates that VVV’s current market conditions may not meet the necessary liquidity and stability requirements to ensure a secure and efficient integration as collateral. Additionally, factors such as borrow demand, historical price resilience, and the potential impact on protocol risk parameters have been considered in this determination.
However, if the community elects to proceed with the onboarding of VVV as collateral, Gauntlet provides the following risk parameter recommendations to mitigate potential risks.
Risk Parameter Recommendations
| Parameters | Values |
|---|---|
| CF | 55% |
| Supply Cap | 260K VVV |
| Borrow Cap | 130K VVV |
| Protocol Seize Share | 30% |
IR Recommendations
| IR Parameters | Recommended |
|---|---|
| Base | 0 |
| Kink | 0.45 |
| Multiplier | 0.239 |
| Jump Multiplier | 5 |
| Reserve Factor | 0.3 |
Supporting Data
Supply and Borrow Caps
DEX TVL
| pool_name | pool_type | pool_url | pool_tvl_usd | volume_24h_usd |
|---|---|---|---|---|
| VVV / WETH | aerodrome-base | Link | $7.63M | $1.30M |
| VVV / WETH 0.05% | aerodrome-slipstream | Link | $816.22K | $1.81M |
| VVV / WETH 0.3% | aerodrome-slipstream | Link | $327.50K | $445.40K |
| VVV / WETH 1% | uniswap-v3-base | Link | $317.50K | $101.26K |
| VVV / ETH 1% | uniswap-v4-base | Link | $263.58K | $37.74K |
| USDC / VVV 0.3% | uniswap-v3-base | Link | $113.95K | $272.09K |
The total DEX TVL of VVV on Base currently stands at ~$10M.The highly concentrated nature of the VVV <> WETH pool introduces significant liquidity risks that could impact collateral stability, liquidation efficiency, and oracle reliability.
Considering the aforementioned risks, we recommend setting conservative supply caps, initially targeting a level that results in no more than 10% slippage. Based on current liquidity conditions, this translates to a supply cap of 260K VVV and a borrow cap of 130K VVV. We will continuously monitor liquidity dynamics and market depth, making adjustments to these caps as necessary to ensure stability and risk mitigation.
5% Slippage
10% Slippage
25% Slippage
Price Volatility
Over the past 7 days (as of Mar 4, 2025), VVV has experienced a price decline of -18.40%, significantly underperforming the global cryptocurrency market, which has dropped by -7.00% during the same period. Additionally, VVV has lagged behind other Artificial Intelligence (AI) cryptocurrencies, which have recorded a comparatively lower decline of -11.40% (Source: coingecko). This indicates that VVV has exhibited greater downside volatility relative to both the broader market and its AI-focused peers. In light of this volatility, we recommend setting the Collateral Factor at a more conservative 55%.
IR Parameter Specifications
IR Curves
| Utilization | Borrow APR | Supply APR |
|---|---|---|
| 0 | 0 | 0 |
| kink | 10.75 | 3.39 |
| 100 | 285.75 | 200.03 |
We recommend an IR curve with a borrow APR of 10.75% at kink.