[COMPOUND] [Gauntlet] 2024-02-05: Ethereum v3 USDC - Risk Recommendations

Simple Summary

A proposal from Gauntlet to adjust one risk parameter in the Ethereum v3 USDC comet.

Gauntlet recommends the following risk parameter change:

• Increase COMP Liquidation Penalty from 12% to 25%

For more details, see the full forum post here.

Motivation

In the Ethereum v3 USDC comet, the COMP supply cap of 900k (~$48M) has been fully utilized at 100% for the past two months. Given the concentration risk posed by COMP and its limited DEX liquidity, we advise raising the COMP Liquidation Penalty from 12% to 25%.

Full proposal and forum discussion

Specification

This proposal updates the Ethereum v3 USDC comet through the UpdateAssetLiquidationFactor method in the Configurator contract.

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.

https://compound.finance/governance/proposals/215