Gaunlet has reviewed the performance of Karura’s stablecoin protocol and its risk parameters in the past week. And below is the recommendation
- Decrease the Liquidation Ratio from 1.8 to 1.6
- Decrease the Min Collateral Ratio from 2.0 to 1.8.
The 7-day $ADV (Average Daily Volume) for KSM has increased substantially, up to $150MM this week, so the protocol is much safer (only $25k average Black Thursday Net Insolvency given these parameter updates).
Here’s the Risk Management Dashboard by Gaunlet Gauntlet Autogov
Here’s the risk management methodology report
The Financial Council is likely to take this recommendation and propose these new ratios on-chain.
A piece of expert advice and decision like this may not necessarily need to go through a referendum, as it often has little relevance to individuals regarding protocol risk management (versus personal benefit), and also poses much overhead for individuals.