[NIP-59] - Update minimum collateral ratios (Arbitrum)
Summary
We propose lowering the minimum collateral ratios for ETH, WBTC, and Liquid Staking Derivatives (wstETH, rETH, cbETH). This will make it more capital efficient for borrowers using Notional V3 on Arbitrum and will make Notional more competitive against other lending protocols like Aave and Compound. This proposal will also make minimum collateral ratios in line with Notional V3 Mainnet.
Proposal
We propose increasing the collateral haircuts and lowering debt buffers for ETH, WBTC, and Liquid Staking Derivatives (wstETH, rETH, cbETH) thereby lowering the minimum collateral ratios (increasing the max LTVs) at which users can borrow on Notional V3 Arbitrum:
Current Parameters
| Haircut | Buffer | Liquidation Discount | Min Collateral Ratio (USDC Debt) | Min Collateral Ratio (USDC Collateral) | |
|---|---|---|---|---|---|
| ETH | 81% | 124% | 106% | 135% | 135% |
| WBTC | 81% | 124% | 107% | 135% | 135% |
| wstETH | 78% | 129% | 106% | 140% | 140% |
| rETH | 76% | 129% | 107% | 143% | 140% |
| cbETH | 78% | 129% | 107% | 140% | 140% |
Proposed Parameters
| Haircut | Buffer | Liquidation Discount | Min Collateral Ratio (USDC Debt) | Min Collateral Ratio (USDC Collateral) | |
|---|---|---|---|---|---|
| ETH | 87% | 120% | 105% | 125% | 130% |
| WBTC | 84% | 120% | 105% | 130% | 130% |
| wstETH | 83% | 120% | 106% | 131% | 130% |
| rETH | 83% | 120% | 106% | 131% | 130% |
| cbETH | 83% | 120% | 106% | 131% | 130% |
Resources
Off-Chain Vote
Timeline
Mar 18, 2024Proposal created
Mar 18, 2024Proposal vote started
Mar 23, 2024Proposal vote ended
Mar 23, 2024Proposal updated