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#11
Gauntlet Risk Parameter Recommendation (8/03/2022)
Executed

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

Recommendations:

  • We recommend decreasing the ACA liquidation ratio from 1.65 to 1.6.
  • We recommend decreasing the ACA minimum collateral ratio from 2.0 to 1.95.
  • We recommend increasing the LDOT liquidation ratio from 2.3 to 2.35.

Rationale:
The VaR is $1.1M, and our recommendations will reduce it slightly. KAR has a VaR of effectively $0. LCDOT has a VaR of $423k. LDOT has a VaR of $160k. LKSM has a VaR of $522k. ACA, DOT, KAR, and KSM each have a VaR of $0.

ACA is relatively safe from a market risk perspective, so can have its liquidation ratio gradually lowered to improve capital efficiency. LDOT is relatively riskier, so we recommend increasing its liquidation ratio to reduce insolvency risk. DOT, KAR, KSM, LCDOT, and LKSM’s liquidation ratios are currently at an optimal balance of risk and capital efficiency.

Potential Forced Liquidations:
Whenever we raise liquidation ratios, there’s a chance that some users may immediately become liquidatable as a result. However, as of our latest data, no LDOT borrowers were under our recommended liquidation ratio.

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.

Edited
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Metadata
Proposer
Index
11
Threshold
2
Hash
0x15ab0913e70dcbcfd86ed7df812878f52ca164bab571530ed6248cd5123ffd4a
Call
Table
Json
callIndex0x0300
sectionutility
methodbatch
args
calls
0
callIndex0x6802
sectioncdpEngine
methodsetCollateralParams
args
currencyId
tokenACA
interestRatePerSecNoChange
liquidationRatio
newValue1600000000000000000
liquidationPenaltyNoChange
requiredCollateralRatio
newValue1950000000000000000
maximumTotalDebitValueNaN
1
callIndex0x6802
sectioncdpEngine
methodsetCollateralParams
args
currencyId
tokenLDOT
interestRatePerSecNoChange
liquidationRatio
newValue2350000000000000000
liquidationPenaltyNoChange
requiredCollateralRatioNoChange
maximumTotalDebitValueNaN
TimelineLatest activity 1mo ago
2022-08-08 01:52:30
Proposed
2/2
Aye(2)
Nay(0)
2022-08-08 01:52:42
Vote
2022-08-08 02:22:30
Vote
2022-08-08 02:22:54
Closed
2022-08-08 02:22:54
Approved
2022-08-08 02:22:54
Executed
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