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#32
Gauntlet Risk Parameter Recommendation (7/14/2022)
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Gauntlet makes the following recommendations to optimize risk and capital efficiency for Acala and Karura:

Recommendations:

  • We recommend decreasing the ACA liquidation ratio from 1.75 to 1.7.
  • We recommend decreasing the ACA minimum collateral ratio from 2.2 to 2.1.
  • We recommend increasing the KSM liquidation ratio from 1.4 to 1.45.
  • We recommend increasing the LCDOT minimum collateral ratio from 2.7 to 2.8.
  • We recommend increasing the LDOT liquidation ratio from 2.25 to 2.3.
  • We recommend increasing the LDOT minimum collateral ratio from 2.8 to 2.85.
  • We recommend increasing the LKSM liquidation ratio from 1.8 to 1.85.
  • We recommend increasing the LKSM minimum collateral ratio from 2.3 to 2.4.

Rationale:

The VaR is $3.5M, and our recommendations will reduce it to $3.4M. ACA has a VaR of $1.1M. KAR has a VaR of $888k. LCDOT has a VaR of $472k. LDOT has a VaR of $334k. LKSM has a VaR of $674k. DOT and KSM both 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. KSM, LDOT, and LKSM are relatively riskier, so we recommend increasing their liquidation ratios to reduce insolvency risk. DOT, KAR, and LCDOT’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, there are no borrowers with liquidation ratios below those we have recommended.

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
32
Threshold
2
Hash
0xd4845ced511a530375c6bf6f9e083df707c4126d70b4d0359dbcb5e0cb9cf5a5
Call
Table
Json
callIndex0x0300
sectionutility
methodbatch
args
calls
0
callIndex0x6802
sectioncdpEngine
methodsetCollateralParams
args
currencyId
tokenKSM
interestRatePerSecNoChange
liquidationRatio
newValue1450000000000000000
liquidationPenaltyNoChange
requiredCollateralRatioNoChange
maximumTotalDebitValueNaN
1
callIndex0x6802
sectioncdpEngine
methodsetCollateralParams
args
currencyId
tokenLKSM
interestRatePerSecNoChange
liquidationRatio
newValue1850000000000000000
liquidationPenaltyNoChange
requiredCollateralRatio
newValue2400000000000000000
maximumTotalDebitValueNaN
TimelineLatest activity undefined
2022-07-18 03:49:18
Proposed
2/2
Aye(2)
Nay(0)
2022-07-18 03:49:30
Vote
2022-07-18 04:30:36
Vote
2022-07-18 04:31:06
Closed
2022-07-18 04:31:06
Approved
2022-07-18 04:31:06
Executed
Result
Succeed
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