Summary
This proposal recommends launching isolated STRIKE markets on Liqwid by deploying:
- A new STRIKE pool with no supply cap.
- A new isolated ADA pool.
- A new isolated USDCx pool.
- qSTRIKE as collateral for borrowing ADA and USDCx.
The proposal follows the isolated market framework introduced by the SNEK/ADA temperature check, keeping STRIKE-related risk separate from Liqwid’s core markets.
Market Reasoning
STRIKE’s volatility, liquidity, and liquidation profile make it unsuitable for Liqwid’s conservative core market.
An isolated structure allows users to borrow ADA or USDCx against STRIKE without exposing core-market lenders to STRIKE risk. It would also create new protocol revenue, offer higher-yield opportunities to lenders, and expand Liqwid’s support for long-tail Cardano native tokens.
Market Design
STRIKE Pool
- Asset: STRIKE
- Market type: Isolated / secondary market
- Supply cap: None
- qToken: qSTRIKE
- Collateral usage: Enabled for borrowing ADA and USDCx in the isolated markets
ADA Pool
- Asset: ADA
- Borrowable against: qSTRIKE
- Net margin: 5%
- Borrow cap: 95%
- Maximum LTV: 45%
- Liquidation threshold: 65%
- Optimal utilization: 90%
- Base rate: 3%
- Rate at optimal utilization: 8%
- Rate at maximum utilization: 40%
USDCx Pool
- Asset: USDCx
- Borrowable against: qSTRIKE
- Net margin: 5%
- Borrow cap: 95%
- Maximum LTV: 45%
- Liquidation threshold: 65%
- Optimal utilization: 90%
- Base rate: 4%
- Rate at optimal utilization: 10%
- Rate at maximum utilization: 40%
Risk and Loss Socialization
These markets carry higher risk than Liqwid’s core markets due to STRIKE’s price volatility, liquidity, and liquidation depth.
Any bad debt should be contained within the affected isolated pool through qToken exchange-rate loss socialization. Losses in the isolated ADA or USDCx pools should not affect Liqwid’s core markets or the other isolated borrowing pool.
Technical Considerations
Implementation requires Liqwid developers to:
- Deploy the isolated STRIKE, ADA, and USDCx pools.
- Enable qSTRIKE as collateral for ADA and USDCx borrowing.
- Configure the proposed interest-rate and collateral parameters.
- Apply a 5% net margin to both borrowing pools.
- Clearly distinguish isolated markets and disclose their higher risks in the UI.
Conclusion
Launching isolated STRIKE/ADA and STRIKE/USDCx markets would allow STRIKE holders to access both ADA and stablecoin liquidity while keeping STRIKE risk separate from Liqwid’s core markets.
This structure expands protocol usage and revenue without exposing core-market lenders to long-tail collateral risk.