Tech. Comm. #150
Karura Risk Parameter Change Proposal - May 2023
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.
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