# Optimize iUSD parameters for usage patterns **URL:** \ **Category:** Temperature Check\ **Tags:** governance\ **Created:** [August 28, 2026, 12:37pm UTC](https://gov.liqwid.finance/t/optimize-iusd-parameters-for-usage-patterns/2016 "2026-08-28T12:37:31Z")\ **Posts on this page:** 1\ **Page:** 1
**Author:** ![Kylix](https://yyz2.discourse-cdn.com/flex010/user_avatar/gov.liqwid.finance/kylix/32/818_2.png) [@Kylix](https://gov.liqwid.finance/u/Kylix)\ **Post date:** [August 28, 2026, 12:37pm UTC](https://gov.liqwid.finance/t/optimize-iusd-parameters-for-usage-patterns/2016/1 "2026-08-28T12:37:31Z")
# Summary This proposal recommends **disabling iUSD as collateral while removing its supply cap** , allowing iUSD to scale primarily as a debt asset. Current usage strongly supports this configuration. Across the **58 positions shown on the Liqwid app** : - **47 positions (~81%) use iUSD as the borrowed/debt asset**. - Only **9 positions (~16%) show a positive iUSD collateral balance**, with another 2 showing effectively zero iUSD collateral. - Significant iUSD debt positions include approximately **57.5k, 19.0k, 12.4k, and 3.7k iUSD** , generally backed by assets such as ADA, DJED, NIGHT, IAG, MIN, USDM, and LQ. This demonstrates that iUSD’s primary lending-market utility is clearly **debt-side rather than collateral-side**. At the same time, enabling iUSD as collateral introduces unnecessary liquidation risk. Given iUSD’s relatively limited secondary-market liquidity, liquidators may struggle to absorb and unwind large iUSD collateral positions during stressed conditions without significant slippage, increasing the risk of unsuccessful liquidations or bad debt. ### Proposed Changes - Set iUSD collateral eligibility / LTV to **0%** - Keep iUSD **borrowable** - **Remove the iUSD supply cap** - Leave other debt-side risk parameters unchanged This aligns iUSD’s parameters with demonstrated usage: **remove a lightly used and liquidity-sensitive collateral function while allowing its much more widely used debt utility to scale.** _Poll ([view on site](https://gov.liqwid.finance/t/optimize-iusd-parameters-for-usage-patterns/2016/1))_