Summary

Gauntlet recommends an update to the interest rate model (IRM) on the Optimism USDC and USDT comets. The change raises the borrow rate base from 1.5% to 3.0% and flattens the borrow slope below kink, while leaving the supply curve, kink, and high-utilization slope unchanged. This is a deliberate realignment of the revenue mix: it shifts protocol earnings toward interest income and away from reliance on liquidation revenue, and it sharply reduces reserve depletion at the mid-range utilization where these markets spend most of their time.

We are proposing this as a scoped experiment on the Optimism USDC and USDT comets.

Recommended parameter changes

Applied to the Optimism USDC and USDT comets:

The supply side is held entirely constant. The entire effect of this proposal comes from the borrow curve below the kink.

More details about the proposal can be found here