[COMPOUND] Initialize cWETHv3 on Arbitrum

Proposal summary

Compound Growth Program [AlphaGrowth] proposes deployment of Compound III to the Arbitrum network. This proposal takes the governance steps recommended and necessary to initialize a Compound III WETH market on Arbitrum; upon execution, cWETHv3 will be ready for use. Simulations have confirmed the market’s readiness, as much as possible, using the Comet scenario suite. The new parameters include setting the risk parameters based off of the recommendations from Gauntlet.

Further detailed information can be found on the corresponding proposal pull request, deploy market GitHub action run and forum discussion.

The market migration to create a new WETH Comet market on Arbitrum also includes a new collateral asset weETH which has not been used in any other Compound market previously. In prior analysis of weETH as a collateral asset, Gauntlet identified oracle risks which could expose the protocol to exaggerated market movements and a yield risk which could cause yield shocks and consequentially elevate slippage magnitude and liquidity on DEXs.

Proposal Actions

The first proposal action sets the Comet configuration and deploys a new Comet implementation on Arbitrum. This sends the encoded setFactory, setConfiguration, deployAndUpgradeTo calls across the bridge to the governance receiver on Arbitrum. It also calls setRewardConfig on the Arbitrum rewards contract, to establish Artitrum’s bridged version of COMP as the reward token for the deployment and set the initial supply speed to be 6 COMP/day and borrow speed to be 4 COMP/day.

The second action wraps ETH as WETH so it can be then transferred.

The third action approves (ArbitrumL1GatewayRouter) TokenMessenger to take the Timelock's WETH on Mainnet, in order to seed the market reserves through the arbitrumL1GatewayRouter.

The fourth action bridges WETH from mainnet via ‘outboundTransfer’ function on ArbitrumL1GatewayRouter’s contract to mint native WETH to Comet on Arbitrum.

The fifth action updates the ENS TXT record v3-official-markets on v3-additional-grants.compound-community-licenses.eth, updating the official markets JSON to include the new Arbitrum cWETHv3 market.

https://compound.finance/governance/proposals/259