Gauntlet makes the following recommendations to optimize risk and capital efficiency for Karura:
Karura Recommendations:
Rationale: Since our last recommendations, Value at Risk (VaR) has remained at $1.7M. KAR’s VaR fell from $272k to $233k, while LKSM’s VaR rose from $1.4M to $1.5M. KSM’s VaR remains close to $0 despite having lowered its liquidation ratio twice last month. We recommend lowering the KSM collateral ratio so that users can mint more KSM-backed aUSD, which our simulations show has a low likelihood of increasing insolvency potential.
Dashboard:
The community should use Gauntlet’s Risk Dashboard to understand better the updated parameter suggestions and general market risk in Karura.
Here are the main points from the SubSquare post about Gauntlet's recommendations for Karura: