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#34
Gauntlet Risk Parameter Recommendation (7/27/2022)
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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 1.7 to 1.65.
  • We recommend decreasing the ACA minimum collateral ratio from 2.05 to 2.0.
  • We recommend decreasing the DOT minimum collateral ratio from 1.7 to 1.6.
  • We recommend increasing the KSM liquidation ratio from 1.5 to 1.55.
  • We recommend increasing the KSM minimum collateral ratio from 1.8 to 1.9.

Rationale:
The VaR is $1.7M, and our recommendations will leave it unchanged. KAR has a VaR of $3k. LCDOT has a VaR of $575k. LDOT has a VaR of $343k. LKSM has a VaR of $810k. ACA, DOT, 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. KSM is relatively riskier, so we recommend increasing its liquidation ratio to reduce insolvency risk. DOT, KAR, LCDOT, LDOT, 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 most recent data, the lowest KSM collateral ratio is 1.78, so no accounts would be immediately liquidated at today’s prices.

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
34
Threshold
2
Hash
0x31753b6bc1a9bc65ad753ec36e35268aa30edf482478cd9df617651ea8d21649
Call
Table
Json
callIndex0x0300
sectionutility
methodbatch
args
calls
callIndex0x6802
sectioncdpEngine
methodsetCollateralParams
args
currencyId
tokenKSM
interestRatePerSecNoChange
liquidationRatio
newValue1550000000000000000
liquidationPenaltyNoChange
requiredCollateralRatio
newValue1900000000000000000
maximumTotalDebitValueNaN
TimelineLatest activity undefined
2022-08-01 05:49:06
Proposed
2/2
Aye(2)
Nay(0)
2022-08-01 05:49:18
Vote
2022-08-01 08:31:42
Vote
2022-08-01 08:32:06
Closed
2022-08-01 08:32:06
Approved
2022-08-01 08:32:06
Executed
Result
Succeed
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