[Proposal] Gauntlet - USDC.e Migration & Parameter Adjustment Recommendation

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[Proposal] Gauntlet - USDC.e Migration & Parameter Adjustment Recommendation

As part of Gauntlet’s work with the Arbitrum Foundation to mitigate risk for the ecosystem while users transition from bridged USDC.e to Native USDC, Gauntlet has proposed adjustments to Radiant on Arbitrum. The adjustments covered in the report can be seen below:

  • Weekly 3% reduction in LTV and LT for USDC.e
  • Add native USDC to Radiant

These recommendations are intended to help facilitate the ecosystem’s transition from USDC.e to USDC.

Along with these recommendations, we will message communities when liquidations are expected as a result of the proposed changes.

An example alert can be seen below:

Attention: As of date, the data shows that the following accounts would be liquidated if these param changes were adopted. The list below specifies the USD value of collateral that borrowers would need to supply to reach a health factor of 1.1, on the assumption that their account’s composition of collateral types remains fixed.

You can read our full analysis here: Gauntlet's USDC.e Initial Migration Report - #5 by gauntlet - General - Arbitrum

Next Steps

  • We welcome community feedback
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For the addition of native USDC to Radiant, we recommend the below initial parameters:

Max LTV: 80%

Liquidation threshold: 85%

Liquidation penalty: 10%

These initial parameters have a lower liquidation penalty than standard to incentivize user’s opening positions with USDC. More details can be found in our report Gauntlet's USDC.e Initial Migration Report - #5 by gauntlet - General - Arbitrum.