[GIP-9] Change pool interest rate curve parameters
AI summary
This proposal aims to adjust the interest rate curve parameters for Gearbox's lending pools (USDC, DAI, WETH, WBTC). The goal is to increase the optimal pool utilization to 85% and decrease the initial interest rate (r_1) to 2% for USDC and DAI pools. This change is intended to make borrowing more attractive for users engaging in 'leverage farming,' which is a key revenue driver for the protocol.
If passed, this proposal will likely lead to lower initial deposit rates for liquidity providers (LPs) in the short term, but aims to increase overall pool utilization and borrowing demand. This could result in higher long-term yields for LPs and increased revenue for the Gearbox protocol, as more users are incentivized to take out loans for leverage farming. Borrowers would benefit from more favorable interest rates.
Voting results
🐳 Whale votes
0 votes > 5% VPFull proposal
Motivation
Existing pool’s utilization parameters are as follows:
- USDC pool 24%
- DAI pool 38%
- WETH pool 22%
- WBTC pool 1%
One of the main goals of the protocol is to have borrowing demand. That is where the main revenue stream is coming from and where the organic passive side LP yield is derived from. Amongst many things like product USP, general market conditions, integrations, and other things - the viability of the APY curve also has a strong impact on how borrowers behave. This proposal is aimed at adjusting those parameters…