LKSM threshold reduction

Democracy

2yrs ago

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This proposal accounts for the threshold adjustment mentioned in the original discussion post here: https://interlay.subsquare.io/post/12
The KSM thresholds were reduced in https://kintsugi.subsquare.io/democracy/referendum/71. However, the corresponding thresholds for LKSM collateral were not yet reduced to the values recommended by the Interlay team, and in particular the models from team member InternalError posted here:
Repo: https://github.com/interlay/collateralization-analysis
Results: https://github.com/interlay/collateralization-analysis/blob/master/analysis.log

This proposal is to change the secure threshold levels as follows:
Current values LKSM <> KBTC
liquidation: 150%
premium-redeem: 200%
secure (min. when minting): 260%

Proposed new values LKSM <> KBTC
liquidation: 145%
premium-redeem: 165%
secure (min. when minting): 180%

This change reduces the capital requirements of Vaults by ~30%.

For more information on the meaning of individual thresholds, see Vault collateral thresholds.

Edited

Here's a summary of the SubSquare post:

The Interlay team proposed to reduce the KSM thresholds.
The LKSM collateral thresholds were not reduced yet.
The proposal is to change the secure threshold levels for LKSM <> KBTC.
The proposed new values will reduce the capital requirements of Vaults by ~30%.
For more information on the meaning of individual thresholds, see Vault collateral thresholds.