Would recommend the following changes to re-balance the eco-system:
- Set at least 1,000,000 USDC and USDT each as protected supply. All the other pools have protected supply.
- Apply the following changes to ANY STABLECOIN pool ONLY if utilization reaches or exceeds 100% of the available supply. Once utilization drops below 100%, these changes will no longer take effect.
A) Increase the borrow APR by 10% relative to the supply APR and remove a cap from both. So if the supply APR goes to 90% for example with 101% utilization, the borrow APR would go to 100%. For each 24 hours that the utilization for that pool consecutively stays or exceeds 100% of the available supply, increase the borrow APR by 5% additionally on a daily (24 hours) basis.
B) Set collateral factor to 99%
C) Set liquidation threshold to 99%
D) Set liquidation penalty to 10% AND auto-liquidate all accounts with negative health status, refreshed every 72 hours. For each 24 hours that the utilization for that pool consecutively stays or exceeds 100% of the available supply, increase the liquidation penalty by 5% daily (24 hours).
I revised the proposal based on the feedback received in the other thread. This way, we can balance legitimate market needs (i.e.: borrowing stablecoins to short waves) while also holding the borrower accountable for a prolonged (weeks to months to years) extreme borrowing position. If we do end up adopting a similar (or parts of this) proposal, can certainly adjust the numbers and parameters to fit the community’s needs while balancing respect for market forces.