Base
Simple Summary
Risk Parameters
A proposal to adjust the following risk parameters:
| Risk Parameter | Current Value | Recommended Value |
|---|---|---|
| WETH Reserve Factor | 5% | 10% |
| weETH Supply Cap | 2,800 | 4,000 |
*Cap Recommendations will be implemented via Guardian
IR Parameters
A proposal to adjust USDC’s IR curve:
| USDC IR Parameters | Current | Recommended |
|---|---|---|
| Base | 0 | 0 |
| Kink | 0.9 | 0.9 |
| Multiplier | 0.0615 | 0.0565 |
| Jump Multiplier | 9 | 9 |
Rationale
Interest Rate (IR) Parameters
USDC
Gauntlet suggests reducing borrowing APRs for stablecoins by an additional ~50bps to align with market conditions, as the SSR has recently dropped from 8.75% to 6.5%. 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 | 5.08% | 4.12% |
| 100 | 95.08% | 85.58% |
Current APRs for USDC
| Utilization | Borrow APR | Supply APR |
|---|---|---|
| 0 | 0 | 0 |
| kink | 5.53% | 4.48% |
| 100 | 95.53% | 85.98% |
WETH
Gauntlet recommends maintaining the current interest rate (IR) settings for WETH at this time. While borrow rates have been increasing recently, utilization has consistently remained below the kink threshold, indicating that borrowing demand has not yet reached a level that would justify a further increase to the rate parameters.
Reserve Factors (RF)
We recommend aligning the reserve factor of WETH on Base with those on Optimism, by increasing it from 5% to 10%. This adjustment is expected to have a minimal impact on the spread between the borrow rate and supply rate, which will remain relatively thin even after the increase. The proposed change will increase the protocol’s reserve accruals, strengthening the ability to absorb potential losses while maintaining competitive returns for suppliers.
Projected WETH APRs after RF Adjustment
| Utilization | Borrow APR | Supply APR |
|---|---|---|
| 0 | 0 | 0 |
| kink | 1.21% | 0.98% |
| 100 | 81.21% | 73.09% |
Current WETH APRs
| Utilization | Borrow APR | Supply APR |
|---|---|---|
| 0 | 0 | 0 |
| kink | 1.21% | 1.04% |
| 100 | 81.21% | 77.15% |
Spread between borrow rate and supply rate will remain thin after change.
Cap Recommendations
Gauntlet will use Cap Guardian to increase the Supply Cap for weETH.
| Asset | Chain | Current Supply Cap | Recommended Supply Cap | Current Borrow Cap | Recommended Borrow Cap |
|---|---|---|---|---|---|
| weETH | Base | 2,800 | 4,000 | 700 | No Change |
Utilization
Top Positions
Top 3 positions account for ~80% total weETH supply and they are predominately recursive. The current Collateral Factor incorporates sufficient buffers to withstand substantial price drawdowns against the dollar for other positions.
Liquidity
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 the following risk parameters:
| Risk Parameter | Current Value | Recommended Value |
|---|---|---|
| VELO Collateral Factor | 65% | 63% |
| VELO Supply Cap | 42,000,000 | 68,000,000 |
*Cap Recommendations will be implemented via Guardian
IR Parameters
A proposal to adjust IR parameters for USDC, USDT, DAI:
| USDC IR Parameters | Current | Recommended |
|---|---|---|
| Base | 0 | 0 |
| Kink | 0.9 | 0.9 |
| Multiplier | 0.0615 | 0.0565 |
| Jump Multiplier | 9 | 9 |
| USDT IR Parameters | Current | Recommended |
|---|---|---|
| Base | 0 | 0 |
| Kink | 0.9 | 0.9 |
| Multiplier | 0.0615 | 0.0565 |
| Jump Multiplier | 9 | 9 |
| DAI IR Parameters | Current | Recommended |
|---|---|---|
| Base | 0 | 0 |
| Kink | 0.9 | 0.9 |
| Multiplier | 0.0615 | 0.0565 |
| Jump Multiplier | 9 | 9 |
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 ~50bps 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 | 5.08% | 4.12% |
| 100 | 95.08% | 85.58% |
Current APRs for USDC, DAI and USDT
| Utilization | Borrow APR | Supply APR |
|---|---|---|
| 0 | 0 | 0 |
| kink | 5.53% | 4.48% |
| 100 | 95.53% | 85.98% |
WETH
For the same reasons cited in the Base market, we recommend maintaining the current IR setting.
Collateral Factor
Gauntlet recommends implementing a risk-off adjustment for VELO by reducing its Collateral Factor (CF) from 65% to 63%. This proactive measure is aimed at enhancing risk management by increasing the buffer available in the event of liquidations, thereby reducing potential protocol exposure to excessive slippage.
With a Collateral Factor of 63%, the protocol gains a larger risk buffer, improving its ability to absorb the impact of liquidating the top 10 positions without triggering substantial market slippage.
| User Address | Total Supply Balance (USD) | Total Borrow Balance (USD) | Initial Borrow Usage | New Borrow Usage | Initial Health Factor | New Health Factor |
|---|---|---|---|---|---|---|
| 0xf6365e34f8abdfca311da07921616acf0397b1d7 | 4960.45 | 3138.74 | 0.9735 | 1.0044 | 1.027 | 0.996 |
There would be a total of $3K liquidatable borrows due to the CF decreases. Data as of March 19, 2025.
Cap Recommendations
Gauntlet will use Cap Guardian to increase the Supply Cap for VELO. A combination of a slightly lower Collateral Factor and a higher supply cap provides a balanced approach—preserving lending efficiency while reinforcing risk safeguards. This strategy allows for continued growth of VELO within the protocol while ensuring that systemic risks remain mitigated.
| Asset | Chain | Current Supply Cap | Recommended Supply Cap | Current Borrow Cap | Recommended Borrow Cap |
|---|---|---|---|---|---|
| VELO | Optimism | 42,000,000 | 68,000,000 | 20,000,000 | No Change |
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 | 8.00M | 6M |
| USDC.wh Borrow Cap | 300.00K | 180K |
| xcUSDC Borrow Cap | 300.00K | 240K |
| xcUSDT Borrow Cap | 300.00K | 150K |
| xcDOT Borrow Cap | 110.00K | 75K |
| FRAX Borrow Cap | 40.00K | 20K |
| WETH.wh Borrow Cap | 15.00 | 10 |
| WBTC.wh Borrow Cap | 0.10 | No Change |
| USDC.wh Collateral Factor | 32% | 27% |
| WBTC.wh Collateral Factor | 11% | 9% |
| WETH.wh Collateral Factor | 28% | 27% |
*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 (Past Week) | Recommended Borrow Cap |
|---|---|---|---|
| WGLMR | 8.00M | 83.68% | 6M |
| USDC.wh | 300.00K | 65.97% | 180K |
| xcUSDC | 300.00K | 79.72% | 240K |
| xcUSDT | 300.00K | 49.46% | 150K |
| xcDOT | 110.00K | 73.09% | 75K |
| FRAX | 40.00K | 60.15% | 20K |
| WETH.wh | 15.00 | 66.91% | 10 |
| WBTC.wh | 0.10 | 144.77% | No Change |
Collateral Factor
We continue recommending a reduction in Collateral Factors across assets as follows.
- Decrease USDC.wh Collateral Factor from 32% to 27%
- Decrease WBTC.wh Collateral Factor from 11% to 9%
- Decrease WETH.wh Collateral Factor from 28% to 27%
The proposed reduction in CFs will trigger liquidations of positions totaling ~$4K in supplies and ~$500 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 |
|---|---|---|---|---|---|---|
| 0x799d95f59956747522666c30975821d4cbdb8b63 | 4205.68 | 446.055 | 0.8551 | 1.0149 | 1.169 | 0.985 |
| 0x51898c765dbe77acbdf335aaddcfb0fa022768eb | 559.31 | 56.6256 | 0.8461 | 1.0126 | 1.182 | 0.988 |
Moonriver
Gauntlet does not recommend any risk parameters for the Moonriver market at this time.
Minimum Reserves Recommendations
Base
Recommendations
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 10 times the maximum historical VaR. Further adjustments to the minimum reserves will follow based on market conditions and historical VaR.
| Minimum Reserves (Token) | Minimum Reserves (USD) | |
|---|---|---|
| WETH | 7.4K | $2.36M |
| USDC | 2.20M | $2.20M |
| cbBTC | 369.43 | $1.43M |
| cbETH | 183.64 | $412.9K |
| wstETH | 171.85 | $407.1K |
| AERO | 610.4K | $388.6K |
| EURC | 241.9K | $260.5K |
| LBTC | 206.99 | $91.0K |
| weETH | 32.70 | $67.7K |
| tBTC | 90.96 | $43.2K |
| rETH | 131.11 | $35.2K |
| WELL | 1.27M | $34.9K |
| VIRTUAL | 39.2K | $34.5K |
| wrsETH | 16.22 | $29.1K |
| USDS | 8.1K | $8.1K |
| DAI | 2.0K | $2.0K |
| USDbC | 0.00 | $0.00 |
Supporting Data
Optimism
Recommendations
Gauntlet proposes the following minimum reserve thresholds for assets on Optimism. These recommendations incorporate a scaling factor of 10 times the maximum historical VaR. Future adjustments to the minimum reserves will be made in response to market conditions and historical VaR trends.
| Minimum Reserves (Token) | Minimum Reserves (USD) | |
|---|---|---|
| USDC | 839.8K | $839.8K |
| WETH | 277.00 | $622.2K |
| USDT | 519.6K | $519.4K |
| wstETH | 111.80 | $299.7K |
| DAI | 110.8K | $110.8K |
| OP | 50.4K | $49.8K |
| VELO | 773.9K | $46.9K |
| weETH | 18.52 | $44.1K |
| rETH | 16.82 | $42.5K |
| wrsETH | 16.34 | $38.0K |
| cbETH | 0.00 | $0.00 |
| WBTC | 0.00 | $0.00 |
Supporting Data
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
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.