MIR-34.1┃Choose FRAX collateral parameters for paUSD on Parallel on Ethereum

Summary:

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

Rationale:

With the recent vote in favor of integrating FRAX as new collateral on Ethereum, we need to set the different parameters of this collateral.

We propose :

• Minimum Collateral Ratio (%): 108
• Liquidation Ratio (%): 107
• Liquidation Bonus (%): 6.0
• Debt Limit ($): 100,000
• Initiation Fee (%): 0.20
• Borrow Fee (%/y): 4.20

We have considered the FRAX 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 FRAX as collateral on Parallel.
• Treasury resources: No treasury cost

Technical implementation:

1. Add FRAX in the ConfigProvider Contract with all parameters decided by the Parallel governance.
2. Set the chainlink oracle related to the FRAX: FRAX/USD into PriceFeed Contract

Voting options:

• Accept these new parameters
• Against these new parameters
• Abstain

Authors: @starny & @JeanBrasse from Mimo Lab