Prop 73: Reduction in Fees, Minimum Borrow Amount & Changes in Auction Parameters on the Harbor Protocol

Reduction in Stability Fees and Removal of Closing fees
The protocol currently charges three kinds of fees on CMST minted from the vaults, which are presently the Drawdown fee, Stability fee and Closing fee.
However, we propose that the Stability Fee should be reduced to 1% (now 4.5%), 0.5% (now 3.5%), and 0.25% (now 2.5%) for vaults A, B, and C, respectively. We would also eliminate the Closing Fee currently being charged (0.5%).
Any user who mints CMST from the vault will now be charged only a small drawdown fee and the new reduced stability fee. The protocol would like to attract more users to deposit their collateral and mint CMST using vaults.Reduction in Minimum Borrow Amount
Currently, the minimum borrow amount for any vault is . Initially, the protocol wanted to keep this number at a reasonable amount to prevent many vaults being created of small value, say or , and to minimise their impact on the auctions in case of liquidations.
With the auctions running smoothly over the last two months of launch and considering the community feedback, we would like to reduce the **minimum Borrow amount from to ** on all vaults. This number would be further reduced over time as the protocol matures.
Change in Auction Parameters
The protocol has seen an overwhelming response from users participating in the auctions. However, users have had to wait nearly three hours to get the collateral at a discounted price. Also, if the market price of the collateral kept falling, a user would have had to wait for a longer time before he placed his bid to get it at a discount. This could also lead to a scenario where the protocol starts accruing bad debt as the protocol was not able to recover the CMST debt. Considering the above points, we propose changing the auction parameters to decrease the price of the auctioned asset faster.
- Buffer (The premium on the price of the auctioned asset at which an auction starts): To be changed from 1.20 to 1.15
- Cusp (The discount on the price of the auctioned asset at which the auction ends): To be changed from 0.75 to 0.70
- Auction time (Duration of the auction): To be adjusted from 6 hours to 5 hours
A change in the above parameters will make the price of the auctioned asset fall faster compared to the current one, enabling users to bid on it more quickly.
When implemented, the above changes will benefit the users as they can now mint CMST at minimal fees and bid in the auction to get the discounted collateral quickly.
A change in the above parameters will make the price of the auctioned asset fall faster compared to the current one, enabling users to bid on it more quickly.