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:
| Parameter | Current | Recommended |
|---|
borrow_per_year_interest_rate_base | 1.50% | 3.00% |
borrow_per_year_interest_rate_slope_low | 0.0278 | 0.011111 |
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
