## Proposal

The following suggestion is proposed to optimize for risk management for Karura.
+ Decrease Debt Ceiling of KSM from 25M to 10M
+ Decrease Debt Ceiling of LKSM from 5M to 2M
+ Decrease Debt Ceiling of KAR from 3M to 1M

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.

- Karura is a platform that needs to manage risk to stay safe.
- They want to decrease the amount of debt they allow people to take on.
- This will help them stay safe in case the market changes a lot.
- They want to decrease the debt ceiling for KSM, LKSM, and KAR.
- This will help them be more careful with how much money they lend out.

#434·Karura Risk Parameter Change Proposal - May 2023

Proposal