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#2
Gauntlet Risk Parameter Recommendation (6/2/2022)
4mos ago
Executed

Gauntlet makes the following recommendations to optimize risk and capital efficiency for Acala and Karura:

Recommendations:

  • We recommend increasing LKSM's liquidation ratio from 1.65 to 1.7.
  • We recommend increasing LCDOT's liquidation ratio from 2.25 to 2.3.
  • We recommend decreasing ACA's liquidation ratio from 2.0 to 1.95.
  • We recommend decreasing DOT's liquidation ratio from 1.6 to 1.55.

Rationale:

We have ingested the new Acala assets into our simulations, so we can report on their status alongside the existing Karura assets.

Since our last recommendations, VaR has decreased from $827k to $694k. All of the VaR comes from two assets: LKSM and LCDOT. LKSM's VaR has decreased from $827k to $565k. LCDOT has a VaR of $98k. The other assets (KSM, KAR, DOT, ACA) all currently have VaR of $0.

Now that we have simulations of Acala assets, Gauntlet's models can elucidate which assets present the most market risk to Acala. DOT and ACA both show low insolvency risk and so can accommodate lower liquidation thresholds. LCDOT is relatively riskier, so a higher liquidation threshold can mitigate risk to the protocol. LKSM remains risky, so we recommend continuing to increase its liquidation threshold to further reduce insolvency risk.

Dashboard:

The community should use Gauntlet's Risk Dashboard to understand better the updated parameter suggestions and general market risk in Acala.

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.

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Metadata
Proposer
Index
2
Threshold
2
Hash
0xac1bef938e5757a9d48dcd5ae702c03eb79531cefbf6c6ced557c41416af642f
Call
Table
Json
callIndex0x0300
sectionutility
methodbatch
args
calls
0
callIndex0x6802
sectioncdpEngine
methodsetCollateralParams
args
currencyId
liquidCrowdloan13
interestRatePerSecNoChange
liquidationRatio
newValue2300000000000000000
liquidationPenaltyNoChange
requiredCollateralRatioNoChange
maximumTotalDebitValueNaN
1
callIndex0x6802
sectioncdpEngine
methodsetCollateralParams
args
currencyId
tokenACA
interestRatePerSecNoChange
liquidationRatio
newValue1950000000000000000
liquidationPenaltyNoChange
requiredCollateralRatioNoChange
maximumTotalDebitValueNaN
2
callIndex0x6802
sectioncdpEngine
methodsetCollateralParams
args
currencyId
tokenDOT
interestRatePerSecNoChange
liquidationRatio
newValue1550000000000000000
liquidationPenaltyNoChange
requiredCollateralRatioNoChange
maximumTotalDebitValueNaN
TimelineLatest activity 4mos ago
2022-06-04 00:39:12
Proposed
2/2
Aye(2)
Nay(0)
2022-06-04 00:39:48
Vote
2022-06-04 01:06:30
Vote
2022-06-04 01:08:54
Closed
2022-06-04 01:08:54
Approved
2022-06-04 01:08:54
Executed
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