[ARFC] Deprecate Aave V2 AMM Market - Step 2

Simple Summary

Since the community approved to deprecate the v2 AMM market within the Deprecate Aave v2 AMM Market forum post. Gauntlet is providing further parameter recommendations to motivate the remaining v2 AMM users to migrate to v3 markets.

Gauntlet recommends to increase reserve factor to 99% for the following assets:

Asset Current RF Recommended RF
WETH 0.1 0.99
DAI 0.1 0.99
USDC 0.1 0.99
WBTC 0.2 0.99
USDT 0.1 0.99

Gauntlet recommends to adjust the IR params for the following assets:

Asset Current Variable Base Recommended Variable Base Current Variable Slope1 Recommended Variable Slope1
WETH 0 0.06 0.08 No Change
DAI 0 0.04 0.04 0.1
USDC 0 0.04 0.04 0.1
WBTC 0 0.05 0.08 No Change
USDT 0 0.06 0.04 0.1

Specifications

Gauntlet aims to reduce the remaining $94k borrow position within the market. Here are the remaining liquidity markets with outstanding borrow positions:

Asset Supply Borrow
WETH $581k $26.7k
DAI $59.38K $24.43K
USDC $54.37K $26.79K
WBTC $37.31K $9.12K
USDT $22.64K $7.23K

Gauntlet proposes to adjust the IR parameters to increase borrow APR to motivate borrowers to pay back their outstanding positions.

Current IR Params and Current Borrow APR

Asset Variable Base Variable Slope1 Variable Slope2 Uoptimal Current Utilization Current Borrow APR
WETH 0 0.08 1 0.65 4.60% 0.57%
DAI 0 0.04 0.75 0.8 41.14% 2.08%
USDC 0 0.04 0.75 0.8 49.27% 2.49%
WBTC 0 0.08 1 0.65 24.44% 3.05%
USDT 0 0.04 0.75 0.8 31.93% 1.61%

Recommended IR Params and Projected Borrow APR

Asset Variable Base Variable Slope1 Variable Slope2 Uoptimal Current Utilization New Borrow APR
WETH 0.06 0.08 1 0.65 4.60% 6.57%
DAI 0.04 0.1 0.75 0.8 41.14% 9.14%
USDC 0.04 0.1 0.75 0.8 49.27% 10.16%
WBTC 0.05 0.08 1 0.65 24.44% 8.01%
USDT 0.06 0.1 0.75 0.8 31.93% 9.99%

The increase in reserve factor will reduce any earn interest for suppliers and motivate them to remove their positions as well.

Next Steps

Welcome community feedback and will put up snapshots for each of the collateral asset next week.

Disclaimer

Gauntlet has not received any compensation from any third-party in exchange for recommending any of the actions contained in this proposal.

By approving this proposal, you agree that any services provided by Gauntlet shall be governed by the terms of service available at gauntlet.network/tos.

7 Likes

We posted the snapshot here.

2 Likes

The AIP has been published here.

1 Like