🔰A Guide to Use Anthias's New Compound VaR Tools

This doc will walk through a brief guide of how to use Anthias's New VaR tools that we finalized for Compound in April of 2024.

The Goal

These tools can provide multiple valuable insights for different users, and there may even be use cases that we are not intending, but for the purpose of this guide, our goal will be to use the tools to understand the current risk profile of COMP supplied as collateral on Compound V3 Ethereum market.

Step 1: Navigate to the Compound V3 Ethereum market with the drop-down selections like those shown here:

Step 2: Go to the Filters tab, and filter to only wallets at risk (To see these wallets, we can set the range to health scores of 0.0-1.3) that are supplying COMP (To see this, check the box for COMP under Supplied Tokens, and make sure all others are unchecked).

Step 3: Now that the filters are set, we can see all the positions on Compound V3 Ethereum with health factors less than 1.3. It seems the top position (0x3c..757) is signifcantly larger than the others, so let's click that one and see what the risk profile looks like.

Step 4: Once on the individual position page for 0x3c...757, you will see data on the composition of the supply and borrow positions as well as selectors for Look Back, Look Forward, and Cutoff. These compositions and selectors will be used to assess the risk profile of the position as a whole (with a focus on COMP for us in this guide). To see what Look Back, Look Forward, and Cutoff refer to, hover over them in the app! For now, we will leave them at their default settings.

Step 5: Analyze the COMP at risk. While we may have originally assumed that this position was supplying $1m+ of COMP as collateral, we now see that it is actually supplying closer to $80k. We see that the COMP has a high correlation in price with WBTC (meaning that this could be a cause for concern if the price of WBTC were to fall rapidly). However, based on the Position Summary below the Correlation Table, barring a massive price dip, the COMP position supplied here as collateral is providing relatively little external risk to the protocol as a whole.

That concludes this position guide! Here are some FAQs that may be helpful as well when utilizing these Anthias x Compound VaR tools:

Q: Can I sort by highest and lowest health factors just by clicking that tab?

A: We originally incorporated that feature but removed it because it would show positions that were likely very small and had little effect on protocol health. Because of this, we added the health factor filter instead.

Q: Where can I view more information on the actions this wallet has been taking?

A: Click the button titled "View on Explorer" to take you to the profile of the position on the respective block explorer.

Q: The wallet I am viewing seems to have a very low health factor. Is it going to be liquidated soon?

A: Firstly, some wallets might have very low health factors but are actually not in imminent danger of liquidation because the positions are "self-collateralized" or borrowing the same asset that they are supplying (or something like borrowing wstETH and supplying WETH). Additionally, review the Position Summary for any at-risk position you are seeing to view its probability of liquidation over the next X days!