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Gauntlet Recommendation: Increase LCDOT Debt Ceiling
5mos ago
Executed

LCDOT debt is approaching the 5M limit (~4.5M). While it’s important to grow the protocol, our analysis shows that it would be prudent to gradually increase the debt ceiling rather than having a more aggressive liquidation ratio or required collateral ratio which can more directly increase the chances of liquidation cascades.

The total liquidity in aUSD-LCDOT pool is around $6M, and a $300k LCDOT liquidation can potentially move the market price by around 20% (assuming no one arbs the pool immediately). Therefore, we recommend increasing the LCDOT debt ceiling to 6M and observing user behavior. Ahead of making more aggressive parameter recommendations, we would recommend (1) increasing aUSD-LCDOT liquidity (2) creating an aUSD-DOT pool (3) having a two-way DOT bridge (in addition to Kucoin exchange that can potentially help liquidators to offload their liquidated LCDOT position to stablecoins through LCDOT-DOT pool and Kucoin).

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Metadata
Proposer
Index
0
Threshold
2
Hash
0xada9f86d40016c7b2583bf97d79ac5c807e7ba7051b1932770cf32f25e8a9938
Call
Table
Json
callIndex0x6803
sectioncdpEngine
methodsetCollateralParams
args
currencyId
liquidCrowdloan13
interestRatePerSecNoChange
liquidationRatioNoChange
liquidationPenaltyNoChange
requiredCollateralRatioNoChange
maximumTotalDebitValue
newValue6000000000000000000
TimelineLatest activity 5mos ago
2022-04-11 03:45:12
Proposed
setCollateralParams
2/2
Aye(2)
Nay(0)
2022-04-11 03:49:06
Vote
2022-04-11 04:35:48
Vote
2022-04-11 21:50:12
Closed
2022-04-11 21:50:12
Approved
2022-04-11 21:50:12
Executed
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