WETH & wstETH Comets Interest Rate Curve Recommendations on Mainnet
AI summary
This proposal from Gauntlet suggests adjusting the interest rate curves for WETH and wstETH (wrapped staked ETH) markets on Compound's Ethereum Comets. The goal is to lower both the 'kink rate' and 'max rate' for borrowing these assets. This change aims to keep borrowing costs down and prevent a large number of liquidations during a period of high market volatility, especially following a recent exploit.
If passed, borrowers of WETH and wstETH on Compound will face lower interest rates, particularly at higher utilization levels, which could reduce the risk of their positions being liquidated. This benefits current borrowers by making their loans cheaper and more stable, while potentially reducing Compound's interest income from these markets.
Voting results
🐳 Whale votes
0 votes > 5% VPFull proposal
WETH & wstETH Comets Interest Rate Curve Recommendations on Mainnet
Simple Summary
Given heightened market activity and elevated volatility across ETH markets, Gauntlet recommends the following Interest Rate (IR) Curve updates across WETH comets on Ethereum. These changes are designed to keep borrow costs low and avoid liquidations during the volatile period.
Motivation
The recent Kelp exploit has led to heightened volatility and shifting dynamics across ETH-correlated assets. In this environment, LST/LRT-based looping strategies are facing a significantly high negative carry.
The …