MIR-51.1┃Choose ETHx collateral parameters for paUSD on Ethereum

Summary:

This proposal aims to set ETHx parameters for paUSD collateral on Ethereum.

Rationale:

With the recent vote in favor of integrating ETHx as new paUSD collateral on Ethereum, the DAO needs to set the different parameters of this collateral.

We propose :

• Minimum Collateral Ratio (%): 130
• Liquidation Ratio (%): 125
• Liquidation Bonus (%): 7
• Debt Limit ($): 250,000
• Initiation Fee (%): 0.20
• Borrow Fee (%/y): decided by paUSD onchain price as voted in MIP-25

We have considered the ETHx risk’s assessment to chose these parameters

(You can find out the risk assessment details of this asset in the previous MIR discussion)

These parameters aim to be balanced for the users and the protocol, but they were also chosen in a low-risk way to be able to run experiment parameters on the pool without possible issues for the users and the protocol given the potential smart contract risks that may exist.

Note that these parameters are likely to be changed in the future according to the first data that we will collect.

Means:

• Human resources: If the proposal is approved, multisig DAO signers will need to sign and execute transactions to add ETHx as collateral on Parallel.
• Treasury resources: No treasury cost

Technical implementation:

Add ETHx in the paUSD ConfigProvider contract by calling the 'SetCollateralConfig' function with these parameters:

• '_collateralType' :0xA35b1B31Ce002FBF2058D22F30f95D405200A15b (ETHx)
• ‘_debtLimit': 250000000000000000000000 // 250k debt limit
• ‘_liquidationRatio' : 1250000000000000000 // 1.25 liquidation ratio
• ‘_minCollateralRatio' : 1300000000000000000 // 1.30 minimum collateral ratio
• ‘_borrowRate' : decided by paUSD onchain price as voted in MIP-25
• ‘_originationFee' : 2000000000000000 // 0.2% origination fee
• ‘_liquidationBonus' : 7000000000000000 // 7% liquidation bonus
• ‘_liquidationFee' : 0 // 0% liquidation fee

Voting options:

• Accept these new parameters
• Against / Rework the Proposal
• Abstain

Authors: @starny & @JeanBrasse from Mimo Labs