## Background
https://acala.discourse.group/t/acala-risk-parameter-change-proposal-may-2023/2096

## Proposal
The following suggestion is proposed to optimize for risk management for Acala.

+ Decrease Debt Ceiling of DOT from 50M to 20M
+ Decrease Debt Ceiling of LDOT from 5M to 2M
+ Decrease Debt Ceiling of LCDOT from 6M to 2M
+ Decrease Debt Ceiling of ACA from 6M to 1.5M

Risk parameters are best adjusted according to market conditions to balance insolvencies, liquidations, and capital efficiency. A lower debt ceiling helps mitigate the risk associated with excessive debt exposure and enable the protocol to remain solvent and resilient in volatile market conditions.



- A proposal was made to improve risk management for Acala.
- The proposal suggests decreasing the debt ceiling for DOT, LDOT, LCDOT, and ACA.
- Risk parameters need to be adjusted based on market conditions to balance insolvencies, liquidations, and capital efficiency.
- Lowering the debt ceiling can help reduce the risk of excessive debt exposure.
- This will help the protocol remain solvent and resilient in volatile market conditions.

#203·Acala Risk Parameter Change Proposal - May 2023

Background

Proposal