#4 Enable Minting kUSD Stablecoin with KSM as Collateral

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Summary

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

  • Required Collateral Ratio: 275%
  • Liquidation Ratio: 225%
  • Liquidation Penalty: 17%
  • Stability Fee: ~3% per annum (or precisely 937,303,552 x 10^-18 per block)
  • kUSD Mint Ceiling: $25 Million

These initial parameters were recommended by Gaunlet - our risk management partner. Read the full assessment here

Considerations

These parameters are at the far end of the conservative and risk aversion spectrum. They are adopted also because kUSD is a first-of-its-kind launch in such technical and market (KSM) environments.

We are also given a second list of moderately aggresive risk parameters as follows, which may be proposed soon after if the launch is smooth

  • Required Collateral Ratio: 200%
  • Liquidation Ratio: 185%
  • Liquidation Penalty: 17%
  • Stability Fee: ~3% per annum (or precisely 937,303,552 per block)
  • kUSD Mint Ceiling: $100 Million

Protocol Details & Risks

  • Why some would prefer to mint kUSD, read more here
  • How to mint kUSD here
  • Understand risks and stability mechanism here
  • Liquidation uses a hybrid approach: Karura Swap + collateral auction, learn how to participate in auctions here

Proposal

This proposal has been fast-tracked to be promoted as a referendum for voting.

Vote here & read about the democracy process here

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