Base
Simple Summary
IR Parameters
A proposal to adjust WETH and USDC’s IR curve:
| USDC IR Parameters | Current | Recommended |
|---|---|---|
| Base | 0 | 0 |
| Kink | 0.9 | 0.9 |
| Multiplier | 0.067 | 0.0615 |
| Jump Multiplier | 9 | 9 |
| WETH IR Parameters | Current | Recommended |
|---|---|---|
| Base | 0 | 0 |
| Kink | 0.9 | 0.9 |
| Multiplier | 0.01 | 0.0135 |
| Jump Multiplier | 8 | 8 |
Rationale
Interest Rate (IR) Parameters
USDC
Gauntlet suggests reducing borrowing APRs for stablecoins by an additional ~55bps to align with market conditions, as the SSR has recently dropped from 12.50% to 8.75% and is expected to decline further. This adjustment helps maintain borrowing rates that are competitive with the broader market, ensuring continued demand while aligning with current liquidity conditions and interest rate trends.
Recommended USDC IR Curve
Projected APRs for USDC
| Utilization | Borrow APR | Supply APR |
|---|---|---|
| 0 | 0 | 0 |
| kink | 5.53% | 4.48% |
| 100 | 95.53% | 85.98% |
Current APRs for USDC
| Utilization | Borrow APR | Supply APR |
|---|---|---|
| 0 | 0 | 0 |
| kink | 6.03% | 4.88% |
| 100 | 96.03% | 86.43% |
WETH
WETH utilization has stabilized around the kink. Gauntlet recommends increasing borrowing APRs by approximately 30bps to better align with broader market rates. This adjustment would help ensure WETH remains competitive on both the borrow and supply sides. We will continue to closely monitor utilization trends and market conditions, making further adjustments as needed to enhance competitiveness.
Recommended WETH IR Curve
Projected APRs for WETH
| Utilization | Borrow APR | Supply APR |
|---|---|---|
| 0 | 0 | 0 |
| kink | 1.21% | 1.04% |
| 100 | 81.21% | 77.15% |
Current APRs for WETH
| Utilization | Borrow APR | Supply APR |
|---|---|---|
| 0 | 0 | 0 |
| kink | 0.90% | 0.77% |
| 100 | 80.9% | 76.8% |
cbBTC
cbBTC interest rates have remained largely unchanged since the last adjustment, indicating consistently low borrow and supply demand. Despite previous rate modifications, utilization has not shown significant improvement, suggesting limited market appetite at current conditions. Given this, Gauntlet recommends keeping the current cbBTC interest rate settings the same for now. Rather than making further adjustments, we suggest monitoring market trends and liquidity dynamics to assess whether external factors, such as broader market conditions or competing lending platforms, are influencing demand. Future adjustments can be considered if there are meaningful shifts in utilization or demand signals.
Cap Recommendations
Gauntlet continuously monitors cap utilization and provides timely recommendations. You can find our latest cap recommendations here.
Optimism
Simple Summary
Risk Parameters
A proposal to adjust 3 risk parameters:
| Risk Parameter | Current Value | Recommended Value |
|---|---|---|
| USDC Reserve Factor | 5% | 10% |
| USDT Reserve Factor | 5% | 10% |
| DAI Reserve Factor | 5% | 10% |
IR Parameters
A proposal to adjust IR parameters for USDC, USDT, DAI and WETH:
| USDC IR Parameters | Current | Recommended |
|---|---|---|
| Base | 0 | 0 |
| Kink | 0.9 | 0.9 |
| Multiplier | 0.067 | 0.0615 |
| Jump Multiplier | 9 | 9 |
| USDT IR Parameters | Current | Recommended |
|---|---|---|
| Base | 0 | 0 |
| Kink | 0.9 | 0.9 |
| Multiplier | 0.067 | 0.0615 |
| Jump Multiplier | 9 | 9 |
| DAI IR Parameters | Current | Recommended |
|---|---|---|
| Base | 0 | 0 |
| Kink | 0.9 | 0.9 |
| Multiplier | 0.067 | 0.0615 |
| Jump Multiplier | 9 | 9 |
| WETH IR Parameters | Current | Recommended |
|---|---|---|
| Base | 0 | 0 |
| Kink | 0.9 | 0.9 |
| Multiplier | 0.01 | 0.0135 |
| Jump Multiplier | 8 | 8 |
Rationale
Interest Rate (IR) Parameters
USDC, DAI and USDT
For the same reasons cited in the Base market, we recommend decreasing the borrow APR at kink by an additional 55bps to mirror demand for leverage.
Recommended USDC, DAI and USDT IR Curve
Projected APRs for USDC, DAI and USDT
| Utilization | Borrow APR | Supply APR |
|---|---|---|
| 0 | 0 | 0 |
| kink | 5.53% | 4.48% |
| 100 | 95.53% | 85.98% |
Current APRs for USDC, DAI and USDT
| Utilization | Borrow APR | Supply APR |
|---|---|---|
| 0 | 0 | 0 |
| kink | 6.03% | 4.88% |
| 100 | 96.03% | 86.43% |
WETH
For the same reasons cited in the Base market, we recommend increasing the borrow APR at kink by an additional 30bps.
Projected APRs for WETH
| Utilization | Borrow APR | Supply APR |
|---|---|---|
| 0 | 0 | 0 |
| kink | 1.21% | 0.98% |
| 100 | 81.21% | 73.09% |
Current APRs for WETH
| Utilization | Borrow APR | Supply APR |
|---|---|---|
| 0 | 0 | 0 |
| kink | 0.90% | 0.73% |
| 100 | 80.9% | 72.81% |
Reserve Factors (RF)
We recommend aligning the reserve factor of stablecoins on Optimism with those on Base, by increasing it from 5% to 10%. This adjustment is expected to increase daily reserve growth by approximately 150%, assuming the same utilization level.
Cap Recommendations
Gauntlet continuously monitors cap utilization and provides timely recommendations. You can find our latest cap recommendations here.
Moonbeam
Simple Summary
Risk Parameters
A proposal to adjust the following risk parameters:
| Risk Parameter | Current Value | Recommended Value |
|---|---|---|
| WGLMR Borrow Cap | 10M | 8M |
| USDC.wh Borrow Cap | 800K | 300K |
| xcUSDC Borrow Cap | 750K | 300K |
| xcUSDT Borrow Cap | 750K | 300K |
| xcDOT Borrow Cap | 120K | 110K |
| FRAX Borrow Cap | 60K | 40K |
| WETH.wh Borrow Cap | 30 | 15 |
| FRAX Collateral Factor | 55% | 49% |
| USDC.wh Collateral Factor | 36% | 32% |
| WGLMR Collateral Factor | 56% | 55% |
| xcDOT Reserve Factor | 50% | 20% |
*Cap Recommendations will be implemented via Guardian
Rationale
Caps
Gauntlet recommends reducing borrow caps for assets on Moonbeam to simplify management and ensure more efficient protocol maintenance.
| Asset | Current Borrow Cap | Average Borrow Cap Usage (Last 7D) | Recommended Borrow Cap |
|---|---|---|---|
| WGLMR | 10M | 71.31% | 8M |
| USDC.wh | 800K | 30.85% | 300K |
| xcUSDC | 750K | 31.59% | 300K |
| xcUSDT | 750K | 21.22% | 300K |
| xcDOT | 120K | 81.06% | 110K |
| FRAX | 60K | 50.92% | 40K |
| WETH.wh | 30 | 40.97% | 15 |
| WBTC.wh | 0.10 | 146.48% | No Change |
Collateral Factor
We continue recommending a reduction in Collateral Factors across assets as follows.
- Decrease FRAX Collateral Factor from 55% to 49%
- Decrease USDC.wh Collateral Factor from 36% to 32%
- Decrease WGLMR Collateral Factor from 56% to 55%
The proposed reduction in CFs will trigger liquidations of positions totaling ~$100 in supplies and ~$50 in borrows. The positions poised to be liquidated are listed below.
| User Address | Total Supply Balance (USD) | Total Borrow Balance (USD) | Initial Borrow Usage | New Borrow Usage | Initial Health Factor | New Health Factor |
|---|---|---|---|---|---|---|
| 0xb28662425e6a01e68e6d8ef6635c1b90311a9401 | 55.3098 | 19.0647 | 0.9575 | 1.0772 | 1.044 | 0.928 |
| 0x440fac0b95b15b04093d4448c38a58956765d6ac | 33.876 | 18.6553 | 0.9768 | 1.0013 | 1.024 | 0.999 |
| 0x810055eb73d5f5fbd13b6a79df3294a30a0a86a1 | 23.5692 | 12.3097 | 0.9496 | 1.0659 | 1.053 | 0.938 |
Reserve Factor
We recommend reducing the reserve factor for xcDOT to address rising utilization, which is pushing up borrowing rates and accelerating the accumulation of interest on bad debt. Lowering the reserve factor to 20% is expected to increase the supply APR at the kink by approximately 2%, helping to incentivize additional supply.
Moonriver
Gauntlet does not recommend any risk parameters for the Moonriver market at this time.
Minimum Reserves
Following up on the minimum reserves required for each asset in the Moonwell Base markets before auctioning excess reserves for WELL, Gauntlet has updated the minimum reserve thresholds below. These adjustments reduce the scaling factor to 20 times the maximum historical VaR. Further adjustments to the minimum reserves will follow based on market conditions and historical VaR.
| Symbol | Minimum Reserves (Token) | Minimum Reserves (USD) |
|---|---|---|
| VIRTUAL | 65.3K | 81.7K |
| USDS | 12.2K | 12.2K |
| tBTC | 0.7 | 65.1K |
| LBTC | 1.4 | 137.4K |
| WELL | 2.1M | 65.1K |
| USDC | 3.3M | 3.3M |
| DAI | 4.7K | 4.7K |
| EURC | 354.0K | 371.4K |
| cbBTC | 22.6 | 2.2M |
| wrsETH | 18.3 | 50.6K |
| WETH | 1.5K | 4.0M |
| cbETH | 241.5 | 700.6K |
| weETH | 41.6 | 117.3K |
| rETH | 20.2 | 60.4K |
| wstETH | 217.4 | 690.7K |
| AERO | 1.0M | 835.3K |
While AERO’s current reserves are near the required minimum, Gauntlet recommends continuing to accumulate reserves until April to meet the one-year buffer requirement before auctioning any excess AERO reserves for WELL.
Risk Dashboard
The community should use Gauntlet’s Moonwell Base Risk Dashboard to better understand the updated parameter suggestions and general market risk in Moonwell BASE.
Methodology
This set of parameter updates seeks to maintain the overall risk tolerance of the protocol while making risk trade-offs between specific assets.
Gauntlet’s parameter recommendations are driven by an optimization function that balances 3 core metrics: insolvencies, liquidations, and borrow usage. Parameter recommendations seek to optimize for this objective function. Our agent-based simulations use a wide array of varied input data that changes on a daily basis (including but not limited to asset volatility, asset correlation, asset collateral usage, DEX / CEX liquidity, trading volume, expected market impact of trades, and liquidator behavior). Gauntlet’s simulations tease out complex relationships between these inputs that cannot be simply expressed as heuristics. As such, the input metrics we show below can help understand why some of the param recs have been made but should not be taken as the only reason for recommendation. To learn more about our methodologies, please see the Helpful Links section at the bottom.
Quick Links
Please click below to learn about our methodologies:
Gauntlet Parameter Recommendation Methodology
Gauntlet Model Methodology
Gauntlet Minimum Reserves Methodology
By approving this proposal, you agree that any services provided by Gauntlet shall be governed by the terms of service available at gauntlet.network/tos.