Summary
Gauntlet recommends updating the borrow interest rate model for the Ethereum WETH Comet.
This proposal implements the following parameter changes:
| Parameter | Current | Proposed |
|---|
| Annual Borrow Interest Rate Base | 1.00% | 1.50% |
| Annual Borrow Interest Rate Slope Low | 1.111111% | 0.5556% |
No supply-side interest rate parameters are changed. The borrow kink and borrow slope above the kink also remain unchanged.
The proposed adjustment pivots the borrow curve below the 90% utilization kink. It is intended to reduce reserve depletion at lower utilization levels while keeping borrowing costs effectively unchanged at and above the kink.
Proposal Actions
- Set the annual borrow interest rate base to
0.015.
- Set the annual borrow interest rate slope below the kink to
0.005556.
- Deploy and upgrade the Ethereum WETH Comet to apply the updated configuration.
Additional Information
For the complete analysis, motivation, expected outcomes, risk considerations, and monitoring plan, see the Ethereum WETH Comet Borrow Rate IRM Updates forum post.
