#13 Enable LKSM as Collateral to mint kUSD

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Summary

1. Enable LKSM as Collateral for kUSD

This proposal will enable LKSM as collateral to mint kUSD with the following initial risk parameters:

  • Required Collateral Ratio : 200%
  • Liquidation Ratio : 160%
  • Liquidation Penalty : 12%
  • Stability Fee : ~3% per annum
  • kUSD Mint Ceiling : $5 Million

The Required Collateral Ratio is set at a higher rate than Gaunlet’s recommendation at 180%, as LKSM is still in the early phase of release with little market data, hence the conservative initial parameters.

Gaunlet is our risk management partner. Read more on the methodology here

2. KSM Collateral Risk Parameter Adjustment

  • Decrease Liquidation Penalty from 17% to 12%

The Financial Council is likely to propose these new ratios on-chain.