Base
Simple Summary
Risk Parameters
A proposal to adjust the following risk parameters:
| Risk Parameter | Current Value | Recommended Value |
|---|---|---|
| USDC Collateral Factor | 83% | 88% |
| EURC Collateral Factor | 83% | 88% |
| cbBTC Collateral Factor | 81% | 85% |
| LBTC Collateral Factor | 81% | 85% |
| tBTC Collateral Factor | 81% | 85% |
| cbBTC Reserve Factor | 10% | 5% |
| LBTC Reserve Factor | 10% | 5% |
| tBTC Reserve Factor | 10% | 5% |
| EURC Reserve Factor | 10% | 5% |
| tBTC Supply Cap | 45 | 90 |
| tBTC Borrow Cap | 18 | 36 |
*Cap Recommendations will be implemented via Guardian
IR Parameters
A proposal to adjust USDC’s and WETH’s IR curve:
| USDC IR Parameters | Current | Recommended |
|---|---|---|
| Base | 0 | 0 |
| Kink | 0.9 | 0.9 |
| Multiplier | 0.0565 | 0.0515 |
| Jump Multiplier | 9 | 9 |
| WETH IR Parameters | Current | Recommended |
|---|---|---|
| Base | 0 | 0 |
| Kink | 0.9 | 0.9 |
| Multiplier | 0.0135 | 0.0190 |
| Jump Multiplier | 8 | 8 |
Rationale
Interest Rate (IR) Parameters
USDC
Source: Dune Dashboard
Gauntlet recommends lowering stablecoin borrowing APRs by approximately 50 basis points to better reflect current market conditions, following a decline in the SSR from 6.5% to 4.5%. This adjustment aims to keep borrowing rates competitive, support ongoing demand, and align with prevailing liquidity dynamics and interest rate trends.
Recommended USDC IR Curve
Projected APRs for USDC
| Utilization | Borrow APR | Supply APR |
|---|---|---|
| 0 | 0% | 0% |
| kink | 4.63% | 3.75% |
| 100 | 94.63% | 85.17% |
Current APRs for USDC
| Utilization | Borrow APR | Supply APR |
|---|---|---|
| 0 | 0 | 0 |
| kink | 5.08% | 4.12% |
| 100 | 95.08% | 85.58% |
WETH
WETH utilization has risen to near the kink. Gauntlet recommends a ~55bps increase in borrowing APRs to better align with broader market rates. This change aims to keep WETH competitive on both the borrow and supply sides. We’ll continue monitoring utilization and market dynamics closely and make additional adjustments as needed to maintain competitiveness.
Recommended WETH IR Curve
Projected APRs for WETH
| Utilization | Borrow APR | Supply APR |
|---|---|---|
| 0 | 0% | 0% |
| kink | 1.71% | 1.39% |
| 100 | 81.71% | 73.54% |
Current APRs for WETH
| Utilization | Borrow APR | Supply APR |
|---|---|---|
| 0 | 0% | 0% |
| kink | 1.21% | 0.98% |
| 100 | 81.21% | 73.09% |
Reserve Factors (RF)
cbBTC, LBTC & tBTC
We recommend reducing the reserve factor for cbBTC, LBTC, and tBTC from 10% to 5%. This adjustment is intended to make these markets more attractive to suppliers by increasing their net yields, thereby helping to improve liquidity and deepen supply.
Projected APRs for cbBTC
| Utilization | Borrow APR | Supply APR |
|---|---|---|
| 0 | 0% | 0% |
| kink | 2.45% | 0.81% |
| 100 | 132.45% | 125.83% |
Current APRs for cbBTC
| Utilization | Borrow APR | Supply APR |
|---|---|---|
| 0 | 0% | 0% |
| kink | 2.45% | 0.77% |
| 100 | 132.45% | 119.20% |
EURC
We recommend reducing the reserve factor for EURC from 10% to 5%. This adjustment is intended to make these markets more attractive to suppliers by increasing their net yields, thereby helping to improve liquidity and deepen supply.
Projected APRs for EURC
| Utilization | Borrow APR | Supply APR |
|---|---|---|
| 0 | 0% | 0% |
| kink | 5.49% | 4.69% |
| 100 | 95.49% | 90.72% |
Current APRs for EURC
| Utilization | Borrow APR | Supply APR |
|---|---|---|
| 0 | 0% | 0% |
| kink | 5.49% | 4.45% |
| 100 | 95.49% | 85.94% |
Collateral Factor (CF)
USDC
Gauntlet recommends raising the collateral factor for USDC from 83% to 88% in order to enhance capital efficiency for users leveraging USDC as collateral. As a widely adopted, highly liquid, and historically stable asset, USDC plays a critical role in DeFi markets. Increasing its collateral factor allows users to borrow more against their USDC holdings, improving the utility of the asset within the protocol and supporting more dynamic borrowing and lending activity.
Top USDC Suppliers’ Positions
cbBTC, LBTC & tBTC
Gauntlet recommends increasing the collateral factor for cbBTC, LBTC, and tBTC from 81% to 85%. This change is aimed at enhancing capital efficiency for users who supply these Bitcoin wrapper assets as collateral. By allowing higher borrowing capacity against these assets, the adjustment is expected to support broader utilization of BTC-backed positions, enabling users to access more liquidity without needing to unwind their BTC exposure. This move aligns with the increasing market maturity and liquidity of these assets, and is designed to promote greater engagement and strategic use of BTC wrappers within the protocol.
Top cbBTC Suppliers’ Positions
Liquidating top 10 suppliers’ positions would incur <10% slipppage.
EURC
Gauntlet recommends increasing the collateral factor for EURC from 83% to 88 to improve capital efficiency for users utilizing EURC as collateral. This adjustment, based on Gauntlet’s simulation methodology, would allow users to borrow more against their EURC holdings, potentially unlocking additional liquidity without significantly increasing protocol risk. Gauntlet’s simulation methodology exhausts a variety of market risk scenarios against current and projected user profiles and behaviors. We aim to set CF that minimize the expected insolvency loss across such scenarios while continuing to provide a high degree of capital efficiency.
Top EURC Suppliers’ Positions
EURC Price Stability
The Relative Strength Index (RSI) measures the strength of price movements, with values above 70 typically indicating strong upward moves and below 30 suggesting downward pressure. Based on the chart, RSI for EURC has mostly hovered between 40 and 65, indicating steady momentum without major extremes. There’s been a noticeable uptick in RSI recently reflecting stronger upward movement.
Cap Recommendations
tBTC
Gauntlet will use Cap Guardian to increase the Supply Cap for tBTC:
| Asset | Chain | Current Supply Cap | Recommended Supply Cap | Current Borrow Cap | Recommended Borrow Cap |
|---|---|---|---|---|---|
| tBTC | Base | 45 | 90 | 18 | 36 |
Cap Utilization
Top Supplier Positions
Slippage
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 |
|---|---|---|
| USDC Collateral Factor | 83% | 88% |
| USDT Collateral Factor | 83% | 88% |
*Cap Recommendations will be implemented via Guardian
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 | 0.0565 | 0.0515 |
| Jump Multiplier | 9 | 9 |
| USDT IR Parameters | Current | Recommended |
|---|---|---|
| Base | 0 | 0 |
| Kink | 0.9 | 0.9 |
| Multiplier | 0.0565 | 0.0515 |
| Jump Multiplier | 9 | 9 |
| DAI IR Parameters | Current | Recommended |
|---|---|---|
| Base | 0 | 0 |
| Kink | 0.9 | 0.9 |
| Multiplier | 0.0565 | 0.0515 |
| Jump Multiplier | 9 | 9 |
| WETH IR Parameters | Current | Recommended |
|---|---|---|
| Base | 0 | 0 |
| Kink | 0.9 | 0.9 |
| Multiplier | 0.0135 | 0.0190 |
| 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 ~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 | 4.63% | 3.75% |
| 100 | 94.63% | 85.17% |
Current APRs for USDC, DAI and USDT
| Utilization | Borrow APR | Supply APR |
|---|---|---|
| 0 | 0 | 0 |
| kink | 5.08% | 4.12% |
| 100 | 95.08% | 85.58% |
WETH
For the same reasons cited in the Base market, we recommend a ~55bps increase in borrowing APRs for WETH.
Projected APRs for WETH
| Utilization | Borrow APR | Supply APR |
|---|---|---|
| 0 | 0% | 0% |
| kink | 1.71% | 1.39% |
| 100 | 81.71% | 73.54% |
Current APRs for WETH
| Utilization | Borrow APR | Supply APR |
|---|---|---|
| 0 | 0% | 0% |
| kink | 1.21% | 0.98% |
| 100 | 81.21% | 73.09% |
Collateral Factor
For the same reasons cited in the Base market, we recommend increasing CF from 83% to 88% for USDC and USDT.
Top USDC Suppliers’ Positions
Top USDT Suppliers’ Positions
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 | 6.00M | 3M |
| xcUSDC Borrow Cap | 240.00K | 120K |
| USDC.wh Borrow Cap | 180.00K | 60K |
| FRAX Borrow Cap | 20.00K | 5K |
| WETH.wh Borrow Cap | 10.00 | 0.10 |
| WBTC.wh Borrow Cap | 0.10 | No Change |
| FRAX Collateral Factor | 49% | 39% |
| USDC.wh Collateral Factor | 27% | 17% |
| WETH.wh Collateral Factor | 27% | 25% |
| WGLMR Collateral Factor | 55% | 51% |
| xcUSDC Collateral Factor | 60% | 50% |
*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) |
|---|---|---|
| WGLMR | 6.00M | 110.12% |
| xcUSDC | 240.00K | 88.42% |
| USDC.wh | 180.00K | 77.70% |
| FRAX | 20.00K | 42.87% |
| WETH.wh | 10.00 | 82.17% |
| WBTC.wh | 0.10 | 3.11% |
Collateral Factor
We continue recommending a reduction in Collateral Factors across assets as follows.
- Decrease FRAX Collateral Factor from 49% to 39%
- Decrease USDC.wh Collateral Factor from 27% to 17%
- Decrease WETH.wh Collateral Factor from 27% to 25%
- Decrease WGLMR Collateral Factor from 55% to 51%
- Decrease xcUSDC Collateral Factor from 60% to 50%
The proposed reduction in CFs will trigger liquidations of positions totaling ~$10K in supplies and ~$5K 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 |
|---|---|---|---|---|---|---|
| 0xc6302894cd030601d5e1f65c8f504c83d5361279 | 7889.52 | 3854.62 | 0.9971 | 1.2528 | 1.003 | 0.798 |
| 0x3f5afe475e7025700726533b48ebcacc6ca4d11c | 1273.05 | 580.937 | 0.9302 | 1.1667 | 1.075 | 0.857 |
| 0x6bc3e7b5010f588cfe347473c610b9a5d363e140 | 396.389 | 210.52 | 0.9656 | 1.0414 | 1.036 | 0.96 |
| 0xedd6be48b0fa7bc1dd43f6fed8cdfe666bfbc0cf | 283.836 | 153.706 | 0.9846 | 1.0618 | 1.016 | 0.942 |
| 0x10115ea72868edacc4fda8f398043ca593f5b830 | 135.714 | 65.4792 | 0.9847 | 1.2371 | 1.016 | 0.808 |
| 0xe6c94137b9276def90c19776679ed9723fa701bd | 246.348 | 61.7294 | 0.9281 | 1.474 | 1.077 | 0.678 |
| 0xb9ba28d129d5c9b77b9a7d349cf4626d4158eb1e | 68.9578 | 35.4199 | 0.9339 | 1.0072 | 1.071 | 0.993 |
| 0xe3053cde2124eaa6103ddde8e5c6bd36c66f716e | 73.6955 | 30.9274 | 0.8565 | 1.0761 | 1.168 | 0.929 |
| 0xb6bbb502dfe498df97c969155bb96fa69d9800e0 | 40.1915 | 20.8088 | 0.9413 | 1.0152 | 1.062 | 0.985 |
| 0xababe7c986a57792ffe17656db76c99413a385b5 | 35.0383 | 18.5418 | 0.9622 | 1.0376 | 1.039 | 0.964 |
| 0x26342d43cdd34a3af30da40502fef18f2bbf3dcf | 59.0059 | 15.0722 | 0.9461 | 1.5026 | 1.057 | 0.666 |
| 0xb28662425e6a01e68e6d8ef6635c1b90311a9401 | 45.1568 | 9.70314 | 0.7958 | 1.264 | 1.257 | 0.791 |
| 0x810055eb73d5f5fbd13b6a79df3294a30a0a86a1 | 20.578 | 9.62542 | 0.9546 | 1.1994 | 1.048 | 0.834 |
| 0xc8b19839ae371bd541f20b15c3a3cb82bfb6a6c6 | 15.6423 | 7.59905 | 0.9604 | 1.0343 | 1.041 | 0.967 |
| 0x0d013d3eaea69e30a2d1bd4dc3e2bed4b77678d9 | 16.731 | 6.97434 | 0.8507 | 1.0688 | 1.176 | 0.936 |
| 0x06be7ae0b021ca3df1e08b62bcf84a061f6118bb | 12.8821 | 6.62228 | 0.9347 | 1.008 | 1.07 | 0.992 |
| 0xf5738aa1e302a7e5750c353c3e623728c39a1caf | 10.1787 | 5.5672 | 0.9944 | 1.0724 | 1.006 | 0.932 |
There would be a total of $5K liquidatable borrows due to the CF decreases.
Moonriver
Gauntlet does not recommend any risk parameters for the Moonriver market at this time.
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
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