Update LQ Market Risk Parameters

Temperature Check
1

Summary:
This proposal aims to update the LQ markets risk parameters to bring them in line with the current settings of other top CNTs such as MIN.

Reasoning:
LQ is the reserve asset of the Liqwid protocol. As such LQ holders should be allowed maximum capital efficiency of the token compared to that of other top CNT markets on Liqwid.

1575Ă—1600 172 KB

Risk Considerations:
The technical risks of a market parameter update is mitigated by comprehensive testing of the LQ market risk parameter changes on preview testnet.

Proposal Specification:
If passed the LQ market risk parameters would undergo the following changes:

  1. maxLTV should increased from 39.95% to 54.93%
  2. liquidationLTV increased from 40% to 55%.

Conclusion:
Liqwid Labs core team recommends the adoption of this proposal to update the LQ market risk parameters to allow LQ holders capital efficiency equal to other top CNT markets on Liqwid.

Do you support this proposal to update the LQ market’s risk parameters?

  • Yes, I do support this proposal to update the LQ market risk parameters
  • No, I do not support this proposal to update the LQ market risk parameters
0 voters
2

@DC1, this looks great. Would we consider moving to 70% to align with the POL threshold rate? Or, if possible, 70% against Stables and ADA?

Is it possible to load this for the next round of votes?

3

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Protocol risk = DAO risk = LQ stakers risk…70% for all.

4

70% liquidation LTV for the POL is set because the DAO has deep pockets, and these loans were “existential” to sustain Liqwid when the LQ token was below $1, and the “bear market” hit a severe low for many.

Nevertheless, loans for users should remain at a “normal” level of risk, aligned with the current LQ trading volume and liquidity.

The upcoming rise to 55% is enough to start with.

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2 Likes
5

Appreciate the clarification of Risk.

1 Like