With the Borrow Limits patch code completed, it is now time to decide on a set of rules that the community board will follow when setting the borrow limits. If approved by the governance process, this board will control a multisig that will act as the Borrow Limits Guardian. The community board will consist of 6 addresses with 4 required consensus: two controlled by members of the compound team and 4 by the community.
This set of rules dictates how the community board sets market borrow limits. It aims to keep limits as tight as possible without restricting normal use of the protocol. Here is something to start off with.
Stable Coins: USDC, USDT, Not DAI
130% of max borrowing in past 14 days
DAI excluded for now due to sporadic farming usage.
If borrowing comes within 5% of the limit, it will be raised ASAP to the new calculated level unless malice is detected.
Non-Stable Coins: ETH, WBTC, ZRX, BAT
110% of max borrowing in past 14 days with a floor of $3M.
If borrowing comes within 5% of the limit, it will be raised ASAP to the new calculated level unless malice is detected.
We will have a bot setup to monitor the market conditions and notify us when adjustments are required. Additionally, every other week, limits will be recalibrated in case they need to be lowered.