Gauntlet Interest Rate Recommendation for WETH Base Rate

Summary

A proposal to make a followup to Gauntlet's previous WETH IR recommendations. For more details and analysis, see the full forum post here.

Motivation

The community voted to pass option 1 on Gauntlet's previous snapshot, which lowered slope 1 for WETH on all v3 to 3.3%. On the other hand, option 2 recommended to remove the base rate for WETH to match v3 Ethereum.

Option 1 was intended to be a superset of option 2 and also intended to lower the base rate to 0 for WETH. This language was not specified in the snapshot. To be extra clear with the community, we put out this new snapshot specifically for lowering the base rate to 0 for WETH.

Again, this will help to

• drive additional revenue to Aave.
• adjust current risk profile for LST to depend less on onchain liquidity, which has been steadily declining over the past few months. This may be adding risk to the current borrow composition against LST collateral.

Specification

Option	Recommendation
1	Lower WETH base interest rate to 0 for v3 markets
2	No change

Disclaimer: Gauntlet reserves the right to not move forward with any parameter changes recommended in Snapshot polls, if market conditions change meaningfully.

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.