mars

Prop 181: LTV Adjustments

mrc: 89 title: LTV Adjustments authors: Mars Foundation forum-url: https://forum.marsprotocol.io/t/1260

Summary

The objective of this proposal is to increase the LTVs of the following assets as follows:

On Osmosis:

  • TIA Liquidation LTV from 55 to 73%. TIA Max. LTV from 53.5% to 72%.
  • milkTIA Liquidation LTV from 50 to 68%. TIA Max. LTV from 48.5% to 67%.

On Neutron:

  • axlUSDC Liquidation LTV from 75% to 80%. axlUSDC Max. LTV from 74% to 79.5%.
  • NTRN Liquidation LTV from 40% to 55%. NTRN Max. LTV from 35% to 54%.
  • ATOM Liquidation LTV from 70% to 75%. ATOM Max. LTV from 68% to 74%.
  • wstETH Liquidation LTV from 70% to 75%. wstETH Max. LTV from 68% to 73%.

These proposed changes are the result of running the Mars Risk Framework over the current list of assets supported on Mars.

Motivation

These increases respond to running the Mars Risk Framework and updating the parameters as suggested. We believe that the LTV increases will make the protocol more efficient and promote organic usage of the platform.

Risks

All else equal, higher LTVs translate into more risk for the platform. The higher the LTV, the more a depositor of a given asset can borrow from the platform. As such, the higher the LTVs, the more aggressive the risk parameters are. Having said that, these changes are the result of running the Mars Risk Framework, which by itself is very conservative. As such, while it is true that the changes increase the market risk for the platform, we don’t think they put the protocol at the risk of insolvency.

Implementation

This is a signaling proposal, not an executable proposal.

The Mars smart contracts on the Osmosis chain are currently controlled by the Builder Multisig address. If this proposal passes, the builders will utilize their multisig to make the necessary parameter changes.

Copyright

Copyright and related rights waived via CC0.

Disclaimers/Disclosures

This proposal is being made by Mars Protocol Foundation, a Cayman Islands foundation company. Mars Protocol Foundation engages in research and development of the Mars Protocol. Mars Protocol Foundation and certain of its service providers and managers own MARS tokens and have financial interests related to this proposal. The aforementioned persons or their affiliates may also have financial interests in complementary or competing projects or ecosystems, entities or tokens, including Neutron/NTRN, Osmosis/OSMO. These statements are intended to disclose relevant facts and to help identify potential conflicts of interest, and should not be misconstrued as a complete description of all relevant interests or conflicts of interests; nor should they be construed as a recommendation to purchase or acquire any token or security.

This proposal is also subject to and qualified by the Mars Disclaimers/Disclosures. Mars Protocol Foundation may lack access to all relevant facts or may have failed to give appropriate weighting to available facts. Mars Protocol Foundation is not making any representation, warranty or guarantee regarding the accuracy or completeness of the statements herein, and Mars Protocol Foundation shall have no liability in the event of losses or damages ensuing from approval or rejection or other handling of the proposal. Each user and voter should undertake their own research and make their own independent interpretation and analysis of all relevant facts and issues to arrive at their own personal determinations of how to vote on the proposal.