We’re going to move forward with a proposal here. We realize that lowering collateralFactors can cause liquidations and should not be done lightly, however the risk posed to the protocol due to WBTC insolvency is too great not to take action. We’ve re-run the simulations with updated results:
These results show that risk in the protocol continues to increase as volatility continues to stay high and WBTC liquidity actually appears lower than it was last week - our last stress tests assumed 250mm daily volume for WBTC and these most recent results assume ~120mm:
We’ve included all of the liquidity assumptions above as @monet-supply requested. We also have updated our suggest parameters to avoid liquidations, as more people have been taking advantage of the higher collateralFactor.
| Collateral | Current collateralFactor | Recommended collateralFactor |
|---|---|---|
| ZRX | .60 | .65 |
| BAT | .60 | .65 |
| WBTC | .75 | .65 |
By lowering the CF for WBTC to .65 instead of all the way to .6, we can limit the immediate effect on borrowers. Some quick numbers here on liquidations for different values of WBTC:
70: [‘0xfa8c56fd100c7c55ef39e0af075c618b59714f91’, ‘0x1702f2d0df7c99011a690461c34e51bd81cbab48’, ‘0xd762205476ea5649c689a8a703488572c8b3007d’]
Total collateral: 4,729,790.58 USD
NOTE: FIRST ONE IS LARGEST (4.7MM) AND IS RECURSIVE WBTC
65: [‘0x15200b08325069ea4edd0cec4baf75853b200b5c’, ‘0x3f9a8d828ebc441eb1ad6942118586f331454743’, ‘0x51a33a5bba82f8ebd0fe2192a25ca2e60b9dc32f’, ‘0x59149937397a77368a3a37ee359d1ff61d9df011’, ‘0x61f5d50cdf7813190d125c0e32b195c6fc0f6ffd’, ‘0x8877889ff4a0fa0415d7572cbc871ede200e2f78’, ‘0x8fd1fa7ba628a0a170ae53139552dbd1aec9c22b’, ‘0xd749940ac368792ffb33745653cb1e7b7d0b7a17’, ‘0xddef74bd1ef4915546ee9371928123475eb2a354’, ‘0xf14662b6b7edfebe645d783afef03a6ce615dfe0’]
Total collateral: 9,821,799.23 USD
60: [‘0x071341196d71b14f04b84463f9b9b56f3b5ed333’, ‘0x2898e036dcaa7a94ea96761193cbe6c54d587bc5’, ‘0x29664e652ca8f8f2d95de3b33cc0ae7247fc0aa9’, ‘0x39f230c044c2a9a67ae95caac639e67145e533a7’, ‘0x3d624933c49df28059d07f950254abb92aa4dc8b’, ‘0x44428c4cfbe9e319ca00a5d955a417f4b6e080e9’, ‘0x444e01dcb3a1ec1b1aa1344505ed7c8690d53281’, ‘0x505008a654c321d93b7d2ebdf6389aaa876b16ab’, ‘0x5140c2e3be04d48e9b7c5fdf016bbea6a88b2b65’, ‘0x57d1e246d2e32f6f9d10ec55fc41e8b2e2988308’, ‘0x59f075a6a9a11b4437d33c0cddb6f5226a4bea87’, ‘0x63dcafd6b547e7cfb2e67386db3d06d67aa71c49’, ‘0x78b58e4197c04d320a33c582ecc3e7e885f26a58’, ‘0x7cd982fdbeaa7a3d13de73d50e2030fde2aba3e1’, ‘0x815afec2721dc50ca75c633906147a46c439e52e’, ‘0x8626e72944f62aad5d85e60b8d34471f7d5ef980’, ‘0x8b349d17392f266d87d518bf71426b2921cc35ee’, ‘0xb145ed57fdf5b6f4fc7d8ec9a2f03026a218f000’, ‘0xbececc0d46b3f06b0096c6b2bbc6e429fe7bd911’, ‘0xc8ebbaaad5ff2e5683f8313fd4d056b7ff738bed’, ‘0xcc60721776b70023ae3196b3a9994e911aa66854’, ‘0xd28bfaea8c886ff6424141278a928f3cde2741f1’, ‘0xe24286adfc053f76888aa51d9a94f6c1519b4cba’, ‘0xfd4bb054392dcd5acb07be4d9e287c7684c87606’]
Total collateral: 33,722,887.95 USD
Obviously, we could lower the parameter in smaller increments, but as proposals take 5 days, this is too slow as the current risk level is so high.