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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
- Decrease Liquidation Penalty from 17% to 12%
The Financial Council is likely to propose these new ratios on-chain.