Gauntlet makes the following recommendations to optimize for risk and capital efficiency for Karura:
Rationale: Since Gauntlet's last recommendations, VaR has fallen from $2.5M to $1.7M. The majority of this decrease comes from KAR, which fell from $1M to $272k. The dramatic fall in KAR’s risk is driven by three causes:
The VaR of LKSM fell slightly from $1.5M to $1.4M. KSM’s VaR remains close to zero despite us lowering its liquidation ratio last week. Gauntlet's analysis shows that we can continue to lower its liquidation ratio to increase capital efficiency with an acceptable increase in risk.
The community should use Gauntlet’s Risk Dashboard to better understand the updated parameter suggestions and general market risk in Karura.
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