Summary

This vote is to determine if the Notional protocol should update its governance parameters. The proposed parameters (18) would change Notional’s AMM curves to be more capital efficient and allocate slightly more liquidity to the USDC and DAI 3 Month pools. This update would lead to lower slippage for borrowers and lenders and lower settlement fees for borrowers.

Proposed changes:

Parameter	Current value	Proposed value
DAI Anchor Rates	0.02 (3M), 0.03 (6M) & 0.04 (1Y)	0.01 (3M), 0.01 (6M) & 0.01 (1Y)
USDC Anchor Rates	0.02 (3M), 0.03 (6M) & 0.04 (1Y)	0.01 (3M), 0.01 (6M) & 0.01 (1Y)
WBTC Anchor Rates	0.01 (3M), 0.01 (6M)	0.005 (3M), 0.005 (6M)
ETH Scalar Rates	32 (3M), 32 (6M)	39 (3M), 39 (6M)
DAI Scalar Rates	26 (3M), 26 (6M), & 26 (1Y)	33 (3M), 33 (6M), & 31(1Y)
USDC Scalar Rates	26 (3M), 26 (6M), & 26 (1Y)	33 (3M), 33 (6M), & 31(1Y)
WBTC Scalar Rates	32 (3M), 32 (6M)	46 (3M), 46 (6M)
DAI Leverage Thresholds	0.90 (3M), 0.87 (6M) & 0.85 (1Y)	0.88 (3M), 0.88 (6M) & 0.87 (1Y)
USDC Leverage Thresholds	0.90 (3M), 0.87 (6M) & 0.85 (1Y)	0.88 (3M), 0.88 (6M) & 0.87 (1Y)
WBTC Leverage Thresholds	0.88 (3M) & 0.88 (6M)	0.84 (3M) & 0.84 (6M)
DAI Deposit shares	40% (3M), 40% (6M) & 20% (1Y)	45% (3M), 40% (6M) & 15% (1Y)
USDC Deposit shares	40% (3M), 40% (6M) & 20% (1Y)	45% (3M), 40% (6M) & 15% (1Y)
ETH Initial Proportion	0.63 (3M), 0.63 (6M)	0.63 (3M), 0.45 (6M)
WBTC Initial Proportion	0.64 (3M), 0.64 (6M)	0.64 (3M), 0.50 (6M)
ETH Settlement Penalty Rate	50 (2.5%)	40 (2.0%)
DAI Settlement Penalty Rate	50 (2.5%)	40 (2.0%)
USDC Settlement Penalty Rate	50 (2.5%)	40 (2.0%)
WBTC Settlement Penalty Rate	50 (2.5%)	40 (2.0%)

Links

The related NRC community discussion can be found here: https://commonwealth.im/notional/discussion/5438-governance-parameter-update-q3-2022

Governance parameter documentation: https://docs.notional.finance/governance