This proposal takes the governance steps recommended and necessary to initialize a Compound III WETH market on Base; upon execution, cWETHv3 will be ready for use. Simulations have confirmed the market’s readiness, as much as possible, using the Comet scenario suite.

Although the proposal sets the entire configuration in the Configurator, the initial deployment already has most of these same parameters already set. The new parameters include setting the risk parameters based off of the recommendations from Gauntlet for Base as well as their latest recommendations for the WETH market. Finally, the parameters include a modest reallocation of some of the v2 USDC borrow-side COMP incentives to users in the new market.

Further detailed information can be found on the corresponding proposal pull request and forum discussion.

Proposal Actions

The first proposal action sends a cross-chain message to Base, triggering a series of actions. These actions are to set the CometFactory for the new Comet, set the Comet configuration, deploy a new Comet implementation, set COMP as the reward token for the deployment, wrap some ETH to WETH, and transfer WETH to the cWETHv3 contract as initial reserves. The initial supply speed will be 20 COMP/day and borrow speed will be 0 COMP/day.

The second action bridges 10 ETH from the mainnet Timelock to the Base Timelock, to be wrapped as WETH and seeded as initial reserves to the cWETHv3 market.

The third 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 Base cUSDbCv3 market.

The fourth action reduces the COMP distribution to v2 cUSDC borrowers by 20 COMP/day, so as to keep the total COMP distribution constant.